Originally Posted by
Leeds
Business Times - 07 Jan 2012
Foreigner share of resale ECs spikes to 49%
383 units in first 11 months of 2011 already exceeds 2010's total
By MINDY TAN
SALES of completed executive condominiums (ECs) on the resale market saw a
surge of interest from foreigners in the first 11 months of 2011. Sales of
new units too locked in a record number of transactions from January to
November last year.
Foreigners, including permanent residents (PRs), bought 383 resale ECs in
the first 11 months of 2011, exceeding the 322 units which were purchased
for the whole of 2010, said property market research firm R'ST Research.
This accounts for 49 per cent of the 775 resale ECs transacted in 2011, up
from the 33 per cent recorded.
Looking specifically at foreigners who are non-PRs, 108 EC transactions were
made, more than twice the 49 units bought in 2010. The bulk of these
purchases were by Chinese nationals (70 transactions) and Indian nationals
(19 transactions).
On the developer sales front, 2,058 EC units were transacted in the
developer (new) sales market. This marked fresh records for both new sales,
and total EC transactions. The latter saw a total of 2,833 EC units
purchased within the 11 months, breaching the last peak of 1,876 units in
1998.
ECs - a hybrid between public and private homes - come with condo
facilities, but cost less than a private condo. They have initial sale
restrictions similar to those for public housing, such as a minimum
occupation period of five years.
After five years, they can be sold to Singaporeans and PRs. They are fully
converted to private housing after 10 years - it is then that they can be
bought by foreigners who are not PRs.
Supply of ECs will be further ramped up this year, with the government ready
to release sites for up to 5,000 EC units through the Government Land Sales
(GLS) programme - sites for 3,000 units will be launched in the first half
of 2012, under the Confirmed List, comparable to the 3,000 EC units from
five sites sold for the whole of 2011.
According to Ong Kah Seng, director at R'ST Research, the buoyant sales
activity can be attributed to the attractive pricing ECs offer.
'Various EC projects were launched from end 2010 and received good buying
interest amid the economic slowdown,' he noted. 'In fact, due to a
significant run up in private condominium prices translating to record
selling prices, ECs became an attractive alternative.'
Joseph Tan, executive director, residential, CBRE, agreed, noting that ECs
are always relatively more affordable, given that their average prices are
some 20 per cent to 25 per cent below those of new 99-year-leasehold private
condominiums in the same neighbourhood.
There is also the issue of supply, he pointed out.
Eight EC sites were sold via the GLS programme in 2010, after a hiatus of
six years. Three new projects were launched in 2010, with the remaining five
launched in 2011.
Alan Cheong, associate director of Savills research and consultancy, added:
'ECs were designed for family units. They have sizes between 900 to 1,300 sq
ft. That makes it attractive for owner occupiers (with families).'
On the resale front, 775 resale EC units were transacted in the first 11
months of 2011, according to R'ST Research.
Of this, 383, or 49 per cent, were purchased by foreigners (including PRs).
Mainland Chinese, Indian nationals and Malaysians accounted for the bulk of
the purchases.
Sales data showed that for the eleven months, mainland Chinese bought 151
resale EC units, followed by Indian nationals with 118 resale units, and
Malaysians at 62 resale units.
Foreigners (non-PRs) bought 108 EC units in the first 11 months.
One of the key reasons for the surge in foreign interest lies in ECs'
attractive pricing, with resale units about 13 per cent below those of
private resale homes in similar locations, said CBRE's Mr Tan.
The top-selling EC projects in 2011 included Prive (537 units), Blossom
Residences (293 units) and Belysa (278 units).
On the resale front, the top-selling projects were Northoaks (81 units),
Woodsvale (75 units) and The Floravale (62 units).
Looking ahead, R'ST Research's Mr Ong expects the strong buying interest to
continue into 2012, in part supported by the recent raising of buyers'
income ceiling from $10,000 to $12,000.
'However, there may be a handful of home seekers who are waiting for prices
of private residential properties to fall in 2012 in view of the ample
supply, challenging economic conditions, and private residential cooling
measures,' he added.
'As such, buyers are unlikely to rush into purchasing an EC unless it fits
into his property buying requirements. The overall buying interest for ECs
is expected to be encouraging, but not excessively optimistic.'
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