Five ECs set to launch after 9-month dry spell
FIVE executive condominiums (ECs) are coming onto the market, after a nine-month drought in EC launches, but consultants and developers alike are unsure how they will perform.
Some expect the new launches to benefit from pent-up demand, while others believe sales will not be that brisk as increasingly selective buyers take their time with the new array of choices.
It boils down to the price eventually, most say. SLP International executive director Nicholas Mak said there will be buyers' resistance if prices exceed $1 million in quantum, or about $800 psf. Most ECs are selling at $780-820 psf presently.
Ong Teck Hui, national research director at JLL, said the 70 per cent slump in EC sales after a 30 per cent mortgage servicing ratio kicked in last year shows that new launches could face challenges if they are still priced at or close to levels before the mortgage servicing ratio was imposed. From January to August last year, ECs sold at a median of $750 psf.
Vincent Ong, co-managing partner of Evia Real Estate - the developer of Lake Life, one of the five ECs - agreed that the mortgage servicing ratio will make some buyers more hesitant, depending on their debt profile.
The saving grace is that ECs remain 20 to 30 per cent cheaper than equivalent private properties, and this will sustain interest in this market class, he said.
The three ECs which have confirmed their launches from now until November are: Qingjian Realty's Bellewoods (in Woodlands) and Bellewaters (in Sengkang), and the Evia Real Estate-led consortium's Lake Life (in Jurong West).
The other two yet to have set their launch dates are Keong Hong's The Amore and Kheng Leong's The Terrace, both in Punggol.
Lee Lay Keng, DTZ's South-east Asia regional head of research, noted that three of the five projects are located in the Punggol-Sengkang region, and may have to vie with one another for buyers with competitive pricing.
This is on top of the existing 75 unsold units at Ecopolitan and 107 more at Waterwoods in the vicinity.
In Woodlands, Bellewoods is also up against the 120 unsold units at Forestville.
She thinks that Lake Life may attract the most interest, although its record high land price of $418 psf per plot ratio (versus the usual $300-plus) will be factored into the pricing. This is because it has been 17 years since the last EC, Summerdale, was launched in Jurong West in 1997.
Another factor is that the Jurong Lake District is going through a major makeover, including spruce-ups of its parks and gardens, a new Science Centre, and the prospect of having the high-speed rail station to Malaysia built there.
Indeed, Mohamed Ismail, chief executive of PropNex, which is the exclusive marketing agent for Lake Life, said the project has garnered more than 500 pre-registrations over the past two weeks. But prices are indeed on the higher end.
"Current market indicative price for Lake Life is $880 to $890 psf," he said.
THE BUSINESS TIMES