Another 5,000 EC units to be launched this year

Singapore

SOME 5,000 executive condominium (EC) units in up to eight new projects could be launched this year, which will probably exacerbate the build-up of unsold inventory.

With loan restrictions still in place, consultants are expecting tepid take-up of these EC units, especially when developers have little room to adjust prices downwards at sites bought at fairly high prices.

ECs are public-private housing hybrids that are subject to HDB eligibility conditions and minimum occupation period as well as a housing loan cap of 30 per cent for units bought directly from developers, but they become full-fledged private condos after 10 years.

Consultants estimate that there are still some 2,100 unsold units from 12 EC projects launched. Latest data from the Urban Redevelopment Authority released last week showed that the vacancy rate of available and completed ECs shot up to 15.1 per cent in the first quarter this year from 11.5 per cent in the fourth quarter.

SLP international executive director Nicholas Mak likened the EC market to "a person drowning in the sea with two heavy millstones - the mortgage servicing ratio (MSR) restriction and falling resale HDB prices - around his neck".

"The upgrade resale levy will be the third millstone that will seal its fate," Mr Mak added, projecting that it would take about two to three years for the market to absorb the estimated 7,100 units from the unsold inventory and upcoming new launches.

The Amore, launched in January, sold a quarter of its total of 378 units in the first three months. Qingjian Realty, which launched two EC projects last November, sold 34 per cent of 651 units at Bellewaters EC in Sengkang and 22 per cent of 561 units at the Bellewoods EC in Woodlands as at end-March.

Starting from the project on the Westwood Avenue site, second-timers who apply for new EC units will have to pay a resale levy.

Koh Brothers and Heeton Homes are jointly developing Westwood Residences at Westwood Avenue, the second EC project to be launched in Jurong after Evia Real Estate's Lake Life that was a near sell-out last year.

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