Executive condos (ECs) have become attractive options in a lacklustre property market. Bargain hunters are on the move as the take up rate has increased due to declining prices.
Median price of ECs has fallen 6 per cent from S$826 per square foot (psf) in the first three months of last year to S$773 psf in the third quarter of this year.
The fall in prices, along with the raising of the eligibility income ceiling about a year ago, saw sales of ECs climbing to a near four-year high of 1,398 units in the third quarter of this year, based on figures by the Urban Redevelopment Authority (URA).
Total sales in the first nine months this year of 3,265 units have exceeded the 2,550 ECs sold in the whole of last year.
URA data showed that the median transacted prices of EC developments Signature at Yishun and The Criterion, both located in Yishun Street 51, were S$759 psf and S$798 psf, respectively in September.
A private residential project in the nearby vicinity of Yishun Close was sold at a median S$1,035 psf in the same month — or 30 per cent to 36 per cent higher than the ECs.
ECs are hybrid public-private homes that cater to the needs of the sandwich class whose household incomes exceed the ceiling for public housing but are unable to afford a private property. They are built and sold by private developers but have eligibility criteria for purchase and sale, such as Housing and Development Board (HDB) flats.
The conditions include gross household income not exceeding S$14,000 a month — up from S$12,000 last year.
EC owners can only sell their units in the open market with some restrictions after fulfilling a five-year minimum occupation period. These restrictions are fully lifted after the 10th year, making ECs no different from private residences.
Many of the ECs are in HDB estates and buyers get to tap into the infrastructure in these estates, such as MRT stations, shopping complexes, schools and clinics.
Today, with most EC prices below S$800 psf, you get a reasonably-sized unit with a budget of up to S$1 million and it is an avenue to owning a private property.
The better sales performance in recent months has helped developers offload their unsold inventory, with unsold units falling to an 18-month low of 3,625 units by September.
Measures such as the income ceiling and the Mortgage Servicing Ratio, which caps housing loans at 30 per cent of the buyer’s gross monthly income, mean that developers have to price their offerings to cater to buyers from a specific income group.
Developers are pricing to sell now, so it’s a good time for buyers to shop around.