Executive condominiums (ECs) could make a comeback

Executive condominiums (ECs) could make a comeback now that the Government has released a site for this hybrid type of housing for the first time since the last one was sold in 2004.

Property analysts say the move is a response to the widening gap in the prices of public and private housing.

These homes - which come with restrictions but are cheaper than full-fledged condos - were first introduced in the 1990s, when runaway prices put condos beyond the reach of HDB flat owners aspiring to private homes.

But a slide in private home prices caused the Government to hold off putting such sites on the market after 2004.

Now the price gap is growing again. For private property, prices rose 10.2 per cent last year and 4.6 per cent for the first quarter of this year; for resale HDB flats, they rose 1.8 per cent last year and 1.3 per cent for the first quarter.

The new EC site is a 2.27ha plot in Punggol Field that could provide 620 homes. If the site on the reserve list is eventually tendered out, it would be Singapore’s 24th EC. The last, La Casa in Woodlands, was launched by Far East Organization in 2005.

The HDB said, when contacted by The Straits Times yesterday, that the latest move was meant to widen the housing options in Punggol, and ‘replenish the supply of new EC units in the market so that the EC Housing Scheme will continue to remain a viable housing option’.

It said it would assess the response to the Punggol site, before deciding on the release of more EC sites. The site will be put up for tender only if a developer commits to bidding a minimum price acceptable to the Government.

Families buying EC units can earn no more than $10,000 a month, though they can use a government grant to buy the homes. They cannot sell their unit within the first five years, and foreigners cannot buy them until after 10 years.

Mr Lui Seng Fatt, the regional director and head of investments at Jones Lang LaSalle, said: ‘It’s quite timely for them to reactivate the scheme. They have to keep mass-market private homes affordable to first-time home buyers and those upgrading from HDB flats.’

Chesterton International director Colin Tan said: ‘The feedback I get from HDB flat dwellers, especially the professionals, is that they won’t upgrade because private property prices are going up fast.’

In fact, rising prices have in recent months generated growing interest in resale EC units, said Knight Frank’s head of consultancy and research, Mr Nicholas Mak. The question now is whether such units will attract the same kind of interest as another bridging housing scheme has also been introduced.

Private developers were recently allowed to design, build, price and sell public housing, resulting in a new breed of ‘condo-like’ flats. The first of these flats, The Premiere@Tampines by Sim Lian Land, won an overwhelming response when launched last year. The second site on Boon Keng Road has just been tendered out to a consortium.

Analysts contacted mostly felt there was room for both schemes, but noted that the location of this EC site itself might mute market response.

Mr Lui said Punggol, unlike Woodlands or Tampines, for example, was a new town with no established group of HDB upgraders to draw upon, so the pool of ready buyers for an EC there could be smaller.

If a tender is eventually conducted, he expects the site to fetch $150 to $170 per sq ft per plot ratio (psf ppr), which would work out to a maximum of $124.6 million.

Mr Mak put his estimate at $180 to $200 psf ppr, or up to $146.6 million.

Source: The Straits Times, 16 June 2007