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ONLY 20-odd units at Northwave have been sold on the first day of sales, despite the 358-unit executive condominium (EC) project collecting 240 e-applications. This is a figure that has raised eyebrows among market watchers BT spoke with, who compared it with The Criterion and Parc Life - two projects which also suffered weak sales recently.
BT had earlier conducted a study of EC projects launched since 2014, which showed poor sales in many projects, contrary to the strong e-application numbers that developers claimed to have received. The study of 14 EC projects found that during the launch week, half of the projects fell short of a 20 per cent conversion rate (ie, the number of e-applicants who went on to buy a unit).
In terms of percentage of units sold over the first launch weekend, the worst performing projects were The Criterion (41 units out of 505 launched units sold) and Parc Life (51 units out of 628 launched units sold), both at 8 per cent. Northwave's performance falls far below this threshold.
Market watchers attribute the lacklustre showing to a range of factors ranging from weak transport links to oversupply in the market.
Located at Woodlands Avenue 12, Northwave is near existing and new industrial clusters along Gambas Avenue. It is a 10-minute walk to Sembawang MRT Station - two stops away from Woodlands Regional Centre.
In the vicinity, and located much closer to a MRT station, are two completed ECs - NorthOaks and Woodsvale - that have reached the 10-year TOP mark. These two projects are not only located closer to Admiralty MRT station but developed by more established brand names, some market watchers suggested.
NorthOaks was developed by Hong Leong's privately held property arm Hong Leong Holdings, while Woodsvale was developed by Pidemco Land which eventually merged with DBS Land to create CapitaLand.
Northwave is meanwhile Hao Yuan Investment's fourth residential project in Singapore since the launch of The Nautical in 2012 and its third EC project after Forestville and Sea Horizon. They had, in 2012, been denied approval from the Urban Redevelopment Authority to sell units in Forestville. Despite being given instructions from Controller of Housing not to proceed with sales, the developer had gone ahead with the launch but issued a "no-sale instruction to agents".
In the current buyers' market, upgraders can afford to be choosy whether in the new EC market, resale EC market, or private condominium market, noted SLP International executive director Nicholas Mak.
In addition to NorthOaks and Woodsvale, there is a notable overhang of unsold stock in earlier launched EC projects in the North, namely Bellewoods, The Brownstone, Signature at Yishun and The Criterion.
Mr Mak said he expects the oversupply situation in the EC market to improve only a year to a year-and-a- half from now.
Century 21 Singapore's chief executive Ku Swee Yong said it might be time to review the relevance of the EC scheme. He estimates there may be some 3,000 to 4,000 launched but unsold EC units in Singapore, and said the lacklustre performance is an "obvious indicator that we have flooded the market with too much".
"In fact, increasing household income to S$12,000 for HDB BTO purchases has cannibalised the number of eligible buyers," he said. "The authorities really should review the need for an EC scheme."
Amendment note: In the eighth paragraph of this article, Northwave was incorrectly referred to as Northvale. It has since been corrected.