SINGAPORE: Developers of executive condominiums (ECs) had been enjoying roaring business, up until measures introduced by the Government last year curbed demand and eased the pace of new project launches.
The measures included a rule that restricts developers from selling units until 15 months from the award of the sites or after foundation works are completed. In addition, the Mortgage Servicing Ratio (MSR) for housing loans granted by banks for EC units bought directly from property developers was also capped at 30 per cent of a borrower's gross monthly income.
Bellewoods at Woodlands Avenue 5 will be first off the blocks and home owners can apply for a unit online starting from September 27. That is closely followed by two other project launches - Lake Life at Yuan Ching Road and Bellewaters at Anchorvale Crescent. Together, the three projects will inject over 1,700 EC units - 566 units at Bellewoods, 546 units for Lake Life and 656 units at Bellewaters - into the market.
Analysts said the new developments will excite the market after nearly a year without an EC launch.
Mr Donald Han, managing director of Chestertons, said: "The EC projects to be launched in the next month or so will create a spur factor for other developers to join in the momentum and to launch more mass market projects, which could potentially see a trickling effect on volume of sales coming back to the marketplace at least for the fourth quarter of 2014."
Still, Qingjian Realty, developer of Bellewoods and Bellewaters, said buying activity may not reach the fever pitch seen in previous years. "The strong sell-out demand is not coming back. Now, the market is in a more stable state and it will take a longer time to sell EC units," said Mr Li Jun, general manager at Qingjian Realty.
"EC prices are hovering around S$800 per square foot (psf) while private home prices are still averaging above S$1,000 psf. There's still a S$200 difference," he pointed out.
Qingjian said prices for units at its two new EC projects will average between S$750 and S$820 psf.
Due to tighter loan restrictions, the developer expects more buyers to tap the deferred payment scheme, that enables buyers to start servicing their loans upon the completion of project. Qingjian said that on average, about 10 to 15 per cent of buyers made use of the scheme in the purchase of units at their earlier EC projects, which included RiverParc Residence, Waterbay and Ecopolitan.
Marketing activity has started for Lake Life at Yuan Ching Road, the EC project with a record land price at S$418 psf per plot ratio. It is the first EC launch in Jurong in 17 years.
An Evia-led consortium beat 15 other bidders to the site in the land tender, and it is now aiming to garner 2,000 e-applications for the project. "There's a lot of pent up demand, especially for Jurong. It's been 17 years since the last executive condominium launch, the entire transformation of Jurong has actually created a lot more interest in the region," said Mr Vincent Ong, managing partner at Evia Real Estate.
Among the offerings, Evia said Lake Life will provide subsidised or free tennis lessons, cooking classes as well as a tie-up with True Fitness. There will also be smart home automation features at Lake Life.
Mr Ong added: "It is our objective to be part of this smart city initiative. Pending LTA approval, we would like to see our buyers being provided with a free shuttle - an electric vehicle, autonomous without a driver, which travels to and fro between the condo and the MRT station."
Analysts said the three EC launches could potentially affect private home sales at nearby projects as their pool of buyers overlap, in particular, those upgrading from HDB flats.
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