Eyeing an EC? 'Golden period' to buy is here
THE next 11/2 years will offer a window of opportunity for those looking to buy an executive condominium (EC) unit, property experts said, with new launches and supply expected to taper off later.
Nicholas Mak, executive director of property consultancy SLP International, said he expects the supply of ECs to slow down in two years, simply because the Government is selling less land for such developments.
"The golden period when there will be a lot of choices starts from next month to the end of next year," he said on the sidelines of the My Paper Advance Seminar held at the SPH News Centre Auditorium yesterday.
The seminar on what to consider when buying an EC attracted a 150-strong audience.
After a lull in the past nine months, five EC projects are set to be launched in the coming months, offering a total of 3,110 units.
While they offer the same amenities as those found in private condominiums, ECs are generally 20 per cent cheaper, with prices typically between $700 and $800 per square foot now.
Research shows they are sold at prices similar to those of private condos, said Eugene Lim, key executive officer of ERA Realty, another speaker at the seminar.
Comparing the prices at which EC Bishan Loft and private condo Rafflesia - both located in Bishan - were sold on the resale market 10 years after they were purchased, Mr Lim noted that some owners of the EC made over 190 per cent in profits, while those of the Rafflesia made only about 60 per cent.
So, typically, buyers can expect the return on investment from the sale of an EC unit after the five-year minimum occupation period to be higher than that of a private condominium unit in the vicinity, he said.
Kenny Tan, head of channel strategy and business alliance at OCBC Bank, also spoke at the seminar. He gave the audience a rundown on the criteria and procedures in getting a loan.
Contrary to the common practice of seeking out a suitable property before applying for a loan, Mr Tan advised the audience to consult a banker first to find out how much they can borrow under the total debt servicing ratio (TDSR) framework.
The TDSR determines how much an individual can borrow from the banks; total monthly debt payments, including home loans, cannot exceed 60 per cent of home buyers' income.
"It is more productive because you can immediately zero in on certain properties and not waste time looking at one that is out of your budget," he explained.
Wrapping up the three-hour talk was Anthony Lim, managing director of Anthony Law Corporation, who guided the audience through the legal process of buying an EC unit.
Financial analyst Casey Ong, 27, found the talk informative. "The research shared on the trends in the EC market will be useful in helping me make a good purchase in the future," he said.