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As a result of inflation, many people’s primary issue is over affordability. Both home prices and interest rates have been trending in the upward direction recently. In addition, the market-calming measures that the government enacted in September resulted in a reduction in the amount of housing loan that was made accessible to prospective purchasers.
Executive condominiums, also known as ECs, were initially developed by the government with the intention of catering to the housing requirements of the “sandwich class.” This class has an income that is above the limit for eligibility in the Build-to-Order (BTO) program but is unable to afford private condominiums. The maximum monthly income required to qualify for BTO apartments is $14,000 for couples and $7,000 for single applicants. The maximum monthly revenue for ECs is much greater, at $16,000.
Even while ECs include the same kinds of common amenities as private condos, such as swimming pools, fitness centers, and clubhouses, their prices are often lower than those of neighboring private condominiums. However, prospective purchasers of executive condominiums (ECs) must first satisfy HDB’s eligibility standards in order to be granted permission to acquire a unit.
The Minimum Occupancy Period (MOP) requirement of the HDB, which is five years, is also applicable. After the MOP, EC units will be able to be sold on the open market, but only to citizens of Singapore or permanent residents. After the development has been completely privatized, which will occur ten years after the TOP is obtained, the units are eligible for sale to international buyers.
Because EC purchasers are not eligible for HDB loans, this forces them into the unenviable position of having to get a mortgage loan from a conventional financial institution.
Good Potential for Capital Appreciation
The current average selling price for ECs is $1,085 per square foot, which is a 15.3% increase from $941 per square foot in the previous year. The current average price for newly launched executive condominiums is $1,270 psf, which is a 7.9% increase over the previous average price of $1,177 psf. It is noteworthy that the average selling price for executive condominiums surpassed the $1,000 psf level this year, whereas the average price for newly launched executive condominiums surpassed the $1,000 psf mark earlier, in 2019.
In spite of the fact that the average selling price of ECs is 28% less than that of leasehold condos ($1,389 psf), price increase for ECs is greater. Since 2012, the average selling price of ECs has increased by 50%, while the growth rate for leasehold condos has been 35%. Therefore, not only are ECs inexpensive, but they are also an asset that provides significant potential for capital growth.
Just TOP Executive Condos
Ten ECs managed to earn TOP status between 2018 and 2020. Districts 19, 23, and 27 are the only ones among the 10 ECs that each feature three separate projects. The Inz Residence has a price per square foot (psf) average of $766, while the Rivercove Residences have a price per square foot average of $1,191. Since the previous year, no EC has managed to achieve TOP.
The Northwave development is the only one in District 25 out of the 10 ECs that were only recently finished, and it has the fewest amount of apartments.
Because of its position in Woodlands and the absence of an MRT station or big shopping malls in the immediate area, Northwave is also one of the executive condominiums that has among the lowest asking prices. The Admiralty MRT station is the closest one, and it is located more over one kilometer away. The Admiralty MRT Station is located close to Admiralty Place as well as the Admiralty Wet Market and Food Centre.
However, there are other ECs located within a radius of one kilometer of Northwave. These ECs are known as Northoaks, Parc Life, and Woodsvale.
The most recent of the four ECs to get TOP was Northwave, which did so in 2019, followed by Parc Life, which did so the year before that. Both Northoaks and Woodsvale, which may be found next to one another, achieved TOP status in the year 2000. The two more established neighborhoods are both situated on the other side of the road from Northwave.
In addition, Northwave has the fewest units with 358, followed by Woodsvale (696 units), Parc Life (628 units), and Northoaks (704 units). Northoaks is the largest (720 units).
Parc Life is somewhat older than Northwave, which has an asking price of $1,004 per square foot, yet it is nonetheless more costly than Northwave. This is due to the fact that the two ECs are located in distinct planning regions and districts, while being in close proximity to one another. The Woodlands planning area and District 25 are both home to Northwave, whereas the Sembawang planning region and District 27 are both home to Parc Life.
In addition, the Sembawang MRT Station, Sun Plaza, and Sembawang Shopping Centre are all located within a radius of one kilometer from Parc Life. There are not many conveniences located close to Northwave. The connectedness and convenience provided by the facilities that are located close to Parc Life contributed to an increase in the price of the property.
The average price in Northoaks is $738 per square foot, while the average price in Woodsvale is $740 per square foot. As a result of the bulk of the apartments in both developments having three bedrooms, the developments are viable and cost-effective alternatives for families that are interested in relocating to the northern area. The five elementary schools, two middle schools, and one high school that can be located within a kilometer of Northoaks contribute to the neighborhood’s attractiveness to families. The fact that the projects are getting on in years, in addition to their remote location in relation to MRT stations and big shopping malls, is also drawback.
The Prive and Esparina Residences are set to be Privatised soon
Because the government suspended the sale of land for ECs from 2005 to 2009, and then resumed the practice in 2010, there are no ECs that will get TOP during the years 2009 and 2012. Consequently, the next group of companies to be completely privatized will be the ECs that achieved TOP in 2013 and 2014 respectively.
Spillover demand for these ECs might come from condominium owners who are interested in downgrading their properties. Following the implementation of the new cooling measures in September, sellers of private residences need to wait 15 months before they are eligible to purchase a resale HDB apartment. As a result of this, there is a possibility that some people would go to the secondary market for completely privatized ECs in order to circumvent the 15-month waiting period.
When entities are completely privatized, there is often a rise in price for the ECs involved. Therefore, astute local purchasers may choose to purchase an EC that is close to ten years old, live in it for a couple of years, and then sell it when it is completely privatized.
In either 2013 or 2014, a total of nine ECs received TOP, which means that they will be completely privatized in either 2023 or 2024. Belysa is the smallest of the three developments, with 315 apartments, whilst Prive is the biggest, with 680 units.
At $900 psf, the average price at The Canopy is the most affordable. The average price of Esparina Residences is the highest at $1,260 per square foot, followed by Prive, which has a price of $1,146 per square foot. It is interesting to note that the complete privatization of both ECs is the next step in the process.
In District 19, there are four ECs that are getting ready to be sold off to private investors. At least one MRT or LRT station is located in close proximity to each of the four complexes.
Prive is located within walking distance of both Cove LRT Station and Punggol MRT Station, whilst Esparina Residences is located just across the street from the Buangkok MRT Station. Kangkar LRT Station is within a 500-meter radius of both Riverparc Residence and Austville Residences, while Riverparc Residence is also within a 500-meter radius of both Riviera and Kadaloor LRT Stations.
Because Esparina Residences is within a 500-meter radius of Hougang Green Shopping Mall and the soon-to-be-built Sengkang Grand Mall, the average price for Esparina Residences is consistently trending higher than Prive by about $100 psf. This is due to the fact that Esparina Residences is situated in a more desirable location. Even though they are less than half a kilometer apart, Prive’s closest major shopping centers are Waterway Point and the soon-to-open One Punggol.
The bulk of the apartments at Esparina Residences and Prive have three bedrooms, and each one is at least 1,000 square feet in size, making them an excellent choice for families. Prive, on the other hand, offers a larger number of apartments inside the complex with three bedrooms and a cheaper average price. In addition, there are three schools within a 500-meter radius of the Prive development, but Esparina Residences only has one school.
Because it is the only EC in the vicinity, Esparina Residences is a peculiarity in the neighborhood. Jewel @ Buangkok and The Quartz, both of which are now finished condos, as well as an integrated development that is still in the process of being finished, surround Esparina Residences (Sengkang Grand Residences). The Buangkok MRT Station is within easy reach of all four leasehold buildings now under construction here.
Sengkang Grand Residences average price is the highest of the four buildings, coming in at $1,768 psf. This is due to the fact that it is the youngest and most integrated of the four developments. Buyers are often prepared to pay a premium price for integrated complexes because of the increased connectedness and convenience they provide. The Sengkang Grand Residences will provide its future occupants with convenient access to the Buangkok MRT Station as well as the Sengkang Grand Mall.
The average price of Jewel @ Buangkok is 12.9% more than the average price of Esparina Residences ($1,260 psf), while the average price of The Quartz ($1,233 psf) is somewhat lower. Jewel @ Buangkok’s pricing is $1,422 per square foot. The lease deterioration may be responsible for the price differential among the three properties. There is a significant age gap between Esparina Residences and Jewel @ Buangkok, with The Quartz (TOP in 2009) being the most senior of the three. The Quartz is the most reasonably priced option, despite being the oldest one. Potential purchasers who are looking for deals should give it some thought. It is anticipated that the forthcoming Sengkang Grand Mall would offer a boost to the pricing of projects located in the surrounding area.
Executive Condos that are currently under construction
At the moment, there are seven ECs that are in the process of being built. The most costly development in District 27 is called North Gaia, and it costs $1,296 per square foot. Parc Canberra, on the other hand, costs just $1,083 per square foot. Provence Residence, located in District 27, is the condominium complex with the fewest number of dwelling units.
As a result, it should not come as a surprise that District 27 has the highest number of unfinished ECs, with three such developments; District 19 is in second place, with two projects.
Executive Condos in District 27
Provence Residence and Parc Canberra may be found right next to one another, while The Brownstone and The Visionaire are two other executive condominiums that can be found on the opposite side of the road.
Provence Residence has a higher average price of $1,227 psf versus Parc Canberra, which has a price of $1,083 psf, despite the fact that they are direct neighbors. When compared to Provence Residences, which has just 24 four-bedroom apartments, Parc Canberra’s overall average price may have been lower since it offers 57 four-bedroom homes. Provence Residences, on the other hand, only has 24 four-bedroom units.
Both The Brownstone and The Visionaire were awarded TOP in their respective years of 2017, 2018, which indicates that The Brownstone has only just accomplished the necessary MOP of five years, and The Visionaire will do so in the next year. Both complexes were brought to market at the same time and offered comparable starting pricing in the range of $700 to $900 psf. The current average prices for The Brownstone and The Visionaire are $1,078 psf and $1,083 psf respectively, which corresponds to rises of $180 to $380 psf from the launch rates. Both of these condos are located in Downtown Los Angeles.
If there isn’t another “black swan” catastrophe like Covid-19 or a recession, it is realistic to anticipate a comparable price rise for Parc Canberra and Provence Residences whenever the projects achieve their respective milestones of practical completion (MOP).
Upcoming Executive Condo Launches
It is anticipated that Copen Grand and Tenet will be introduced during this quarter. Both ECs are found in quite distinct parts of the world. While Tenet is located in the established housing estate of Tampines in the east area, Copen Grand can be found in the developing town of Tengah, which is located in the west region.
Tenet is located within a one kilometer radius of the Tampines North and Pasir Ris MRT stations, as well as the soon-to-be-built Tampines North MRT Station on the Cross Island Line, which is within walking distance. There are no MRT stations within walking distance of Copen Grand that are now operational; however, it is anticipated that three MRT stations will be located in the area with completion of the Jurong Regional Line.
Within a radius of one kilometer from Tenet, there are two schools, however there is none for Copen Grand. If the search radius is widened to two kilometers, however, there are eleven schools near Copen Grand and sixteen schools near Tenet.
Within the confines of an existing forest lies the brand-new community of Tengah, which was designed to be environmentally conscious, intelligent, and car-free.
Because the growth of the town will offer an increase to the price of their land, future residents of Copen Grand will have an edge over others who come there later because of the first-mover advantage. As a result, it is anticipated that purchasers who seek an inexpensive smart house surrounded by nature would be drawn to the Copen Grand community.
Tampines is a lively mature residential estate and a regional center, both of which describe Tampines’ location, and Tenet. It is anticipated that purchasers who appreciate the comfort and connectedness offered by living in an established residential enclave would be interested in purchasing homes in Tenet.
Within a radius of 500 meters from Tenet, there are five different condos to choose from. The D’Nest, The Palette, and Elias Green are the three that are situated just across the street from the Tenet building. Elias Green, which was voted Top in 1994, is the oldest of the three, and as a result, it costs the least per square foot ($844 psf). The most costly option is D’Nest, which costs $1,209 per square foot, followed by The Palette, which costs $1,202 per square foot. It’s possible that this is due to the fact that D’Nest (TOP in 2017) was released two years after The Palette (TOP in 2015). If a buyer’s application for Tenet is denied, they may want to consider about purchasing one of these three leasehold condos instead.
Of the ECs that have only just been awarded TOP, Northwave is the one and only development in District 25, making it the smallest of the ECs. On the other hand, there are few conveniences within a short walking distance.
EC is a value for money option for purchasers who wish to bypass the 15-month waiting time frame when they downgrade from private condos. This is the case for customers who downgrade from private condominiums.
There are four incomplete ECs in the 27th District. Parc Canberra and Provence Residences, both of which are still in the process of being built out, are situated just across the street from The Brownstone and The Visionaire, both of which have recently reached MOP or will do so in the next year. It is reasonable to anticipate that the rate of price rise for Parc Canberra and Provence Residences will follow a pattern that is similar to that of their finished neighbors.
Executive Condos (ECs) that are scheduled to be completely privatized over the next several years provide a chance for a shrewd buyer to scoop up an asset with great potential for capital gain. The greatest number of ECs in District 19 are scheduled to be completely privatized during the next several years.
It is anticipated that Tenet and Copen Grand will be launched 4th quarter 2022. Both ECs are situated in extremely distinct geographic regions, and as a result, it is anticipated that each will appeal to a unique clientele.