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Thread: First-timers to get 95% of latest EC projects

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    Default First-timers to get 95% of latest EC projects,00.html?

    Published January 15, 2010

    First-timers to get 95% of latest EC projects

    Sengkang plot seen going for $190-300 psf ppr; Yishun, $150-210 psf ppr


    (SINGAPORE) Two executive condominium (EC) sites, one in Sengkang and the other in Yishun, will come with a twist when they are launched today. The winning tenderers will have to set aside 95 per cent of units in the initial month of sale for first-time home buyers. That is, those that have yet to receive a housing subsidy.

    Market watchers say that the strategy is aimed at meeting strong demand for HDB flats from this segment of late.

    ECs are a hybrid of public and private housing. They are strata-titled apartments with facilities comparable to private condos. New ECs are sold with initial eligibility, ownership and resale restrictions similar to public housing; but these are completely removed after 10 years.

    Knight Frank managing director (residential services) Peter Ow says that setting aside 95 per cent of a new EC project for first-timers will help ease their difficulty in purchasing a home.

    'Looking at how recent Built-To-Order HDB flats are oversubscribed and an expected continued recovery in the private residential market, ECs - a hybrid fulfilling the difference in these two property types - are expected to be met with overwhelming buying interest,' he added.

    'Ironically, though, first-time buyers may have less purchasing power . .. and would thus have to be prudent and ensure they will be able to continually finance their purchase, even if they are given the privilege to buy,' he added.

    Of the two 99-year leasehold plots on offer, the Sengkang plot, near Buangkok MRT Station, will be more highly sought after and hence fetch a higher unit land price, say property consultants. It can be developed into 520 apartments and is just one MRT stop away from Compass Point mall.

    The Yishun plot, which can yield about 385 units, is not within walking distance of an MRT station, although it could make for a conducive living environment. It is close to Yishun Park, Orchid Country Club and Lower Seletar Reservoir. The Yishun plot is next to a completed EC project, Lilydale.

    Property consultants that BT polled predict that land bids for the more popular Sengkang plot would range from about $190 to $300 per square foot per plot ratio (psf ppr), with target average selling prices of $550-600 psf.

    Colliers International director Tay Huey Ying says that three EC projects in the north-east region - Park Green, The Rivervale and The Florida - sold at average prices of $525-546 psf - in Q4 2009.

    For the Yishun plot, consultants expect bids of around $150-210 psf ppr with average selling prices of $500-580 psf. Units in Lilydale next door transacted at $494 psf on average last quarter, notes Ms Tay.

    Real estate lecturer Nicholas Mak predicts about four to nine bids for the Yishun plot and five to 10 offers for the Sengkang land parcel. BT understands that some developers may be put off from bidding for the EC sites due to more admin work involved, including checking buyers' eligibility criteria.

    The last EC project was Far East Organization's La Casa in Woodlands, which was released at an average price of about $380 psf in May 2005 and completed in 2008.

    Last year's sharp recovery in 99-year leasehold mass-market private condo prices has revived the need for ECs, say analysts. 'If the price gap between the new EC projects and new 99-year private condos in the same location is attractive enough, homebuyer demand for ECs will surely return,' says CB Richard Ellis executive director Li Hiaw Ho.

    Sim Lian Group executive director Diana Kuik says the $10,000 monthly household income cap for new EC buyers will serve to rein in land bids. An overly aggressive successful bidder may carve out a higher proportion of small units to try and achieve higher psf selling prices, she reckons.

    While some developers may not be be pleased with the stipulation favouring first-time buyers, Knight Frank's Mr Ow says: 'We don't see a great impact on marketability of the EC projects as recent BTO projects have seen overwhelming response.'

    ECs were minted in 1995 to cater to the 'sandwich class' who aspire to own private condos but find themselves priced out. The $10,000 income ceiling for new EC buyers is above the $8,000 for those seeking to buy new public housing flats from HDB.

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    Jan 15, 2010

    2 new exec condo sites launched

    Sengkang, Yishun plots the first to be launched since La Casa in 2005

    By Jessica Cheam

    EXECUTIVE condominiums (ECs) are making a comeback after a hiatus of almost five years, as the Government ramps up the supply of flats for middle-income buyers.

    The HDB is launching two EC housing sites today, in Sengkang and Yishun, that will yield about 900 new homes in the next few years. ECs boast many of the facilities of private estates but are subject to such HDB rules as income ceiling and minimum occupation period.

    Analysts told The Straits Times they expect the sites to attract a lot of interest from developers, given the demand for mass market flats that started heating up in the second quarter last year. Suburban home prices rose by an estimated 11.2 per cent last year, and in the process left a group of 'sandwich-class' buyers who have been priced out of the market and are looking for alternatives, say analysts.

    The HDB move marks a turnaround for a type of housing that lost popularity in recent years due to the affordable prices of mass market condos.

    PropNex chief executive Mohamed Ismail said even though it will be a while before the ECs are launched for sale, buyers are expected to bite when the time comes. 'In the past, there was no demand for ECs because the private mass market homes were largely affordable, but with tight supply and high demand, HDB home buyers will welcome this fresh supply,' he said.

    ECs were introduced in 1996 to provide for middle-income buyers who wanted private property living but were unable to afford the prices. The last EC launched was La Casa in Woodlands in 2005, which was completed in early 2008. A Punggol EC site was launched in September 2008 but had no takers.

    ECs fully convert to private housing after 10 years. First-time buyers with monthly incomes of up to $10,000 can apply for a $30,000 housing grant.

    Prices of ECs have been on the rise in tandem with the mass market boom, said analysts yesterday.

    A CB Richard Ellis report last November found the median resale prices of ECs had increased 63 per cent in recent years - from $319 per sq ft (psf) at the bottom of the market in the third quarter of 2006 to $519 psf in October last year.

    They have inched even higher in the past three months, with homes in good locations hitting around $600 to 700 psf.

    A 1,464 sq ft home at Bishan Loft, for example, sold for $1.12 million or $765 psf in December, according to data from the Urban Redevelopment Authority

    ERA Asia-Pacific associate director Eugene Lim pointed out that entry-level mass market condos are now priced north of $800,000 for a three-bedder.

    'ECs are expected to be priced below this and are attractive due to the HDB's grant, so it will offer home buyers an alternative,' he said.

    Ngee Ann Polytechnic real estate lecturer Nicholas Mak said he expects about five to 10 bids for each of the two sites.

    He also estimates that the bidding prices will range from $120 million to $141 million for the Sengkang site and $72 million to $96 million for the Yishun plot.

    Mr Mak cautioned that despite the positive sentiment in the mass market, it will be difficult to predict responses from buyers when the homes are finally launched - likely up to a year's time.

    'We also don't know the interest rates situation then, so it's too early to accurately predict demand,' he said.

    Home buyer Du Zuo Ling, 27, said the ECs would top her list of homes to consider when they are launched as HDB resale flats are getting more expensive.

    'With ECs, the income ceiling is higher, and we can get housing grants. It will be good to have more of such choices,' said Ms Du.

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