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Introduction

Home buyers have picked up a good number of Executive Condominiums (ECs) in 2016. In 2016, a total of 3,999 ECs were sold, marking a 56.82% increase in the number of ECs sold compared to 2,550 units sold in 2015. The demand for ECs has increased steadily since the fall in the volume of Executive Condominiums experience between the year 2012 to the year 2014 due to the introduction of cooling measures.

Transaction Volume of Executive Condominiums between 2010 to 2016

Competitively Priced New Launches

The increase in the number of Executive Condominiums sold in 2016 was partly contributed by the overwhelming response for Treasure Crest @ Anchorvale and Wandervale @Choa Chu Kang.

The competitive pricing by Sim Lian for its Treasure Crest led to 398 units out of 504 units sold during the month of its launch. The average PSF for Treasure Crest was S$ 737, comparatively lower to comparable projects Bellewaters & The Vales as shown in the table below.

Price Comparison between The Vales, Bellewaters & Treasure Crest

PROJECT NAMEMIN PRICE
(S$ PSF)
AVG PRICE
(S$ PSF)
MAX PRICE
(S$ PSF)
BASED ON NO. OF TRANSACTIONS
THE VALES705798909269
BELLEWATERS667787904239
TREASURE CREST670744815500

Source: Squarefoot.com.sg, PropertyNet.SG Research

For Wandervale, Sim Lian cleared more than 93% of its offering at the end of 2016 since its launch in March 2016. Again, Wandervale is priced at an average of S$ 760 PSF, comparatively lower than its comparable project, Sol Acres, at S$ 789 PSF.

Price Comparison between Sol Acres & Wandervale

PROJECT NAMEMIN PRICE
(S$ PSF)
AVG PRICE
(S$ PSF)
MAX PRICE
(S$ PSF)
BASED ON NO. OF TRANSACTIONS
SOL ACRES708789877412
WANDERVALE678760836499

Source: Squarefoot.com.sg, PropertyNet.SG Research

Possibility of Further Price Decline is Low

Prices for Executive Condominiums have declined quite a bit since its peak in late 2014 / early 2015 and the possibility of a further decline in price is unlikely due to the limited supply of new Executive Condominiums in 2017. In 2017, only 2 new Executive Condominiums are expected to be launched – iNZ Residences at Choa Chu Kang and another EC at Yio Chu Kang, with the 3rd EC at Anchorvale to be launched by end 2017/early 2018.

Monthly Average PSF for Executive Condos between 2011 to 2016

Average Price of Executive Condos from 2011 to 2016
In view that there will be fewer ECs launch in 2017, buyers have limited benefit to waiting further and have taken the steps to pick up their next home from the existing pool of Executive Condominiums. Executive Condominiums like Sol Acres at Choa Chu Kang, The Terrace at Punggol, and The Visionaire at Canberra have started to see healthy demand from the home buyers.

Top 10 Executive Condos with Most Transactions in 2016
(You may access the member resources to view the transaction volume for all Executive Condominiums)

Executive CondominiumsLocationTotal Units Sold in 2016
WandervaleChoa Chu Kang521
Treasure CrestAnchorvale510
Sol AcresChoa Chu Kang430
The TerracePunggol377
The VisionaireSembawang331
The ValesAnchorvale297
BellewatersAnchorvale227
The BrownstoneCanberra217
BellewoodsWoodlands208
The AmorePunggol201

Source: URA, PropertyNet.SG Research

More Executive Condominiums Nearing TOP

As the new Executive Condominiums are approaching their TOP dates, they become more attractive to home upgraders or 1st time home buyer who needs a place soon.

For home upgraders, it will ease their financial burden to finance the second property. For 1st time buyer, they can move into their new place as fast as getting a property from the resale market.

Henceforth, projects like Bellewaters, Bellewoods and The Amore has shown a significant increase in buyers’ demand as it is nearing TOP. In fact, The Amore has sold all of its units in Oct 2016. Bellewaters and Bellewoods have seen strong buyers’ interest.

Monthly Transaction Volumes for Bellewaters, Bellewoods & The Amore
(You may access the member resources to view the monthly transaction volumes of all Executive Condos)

MONTHBELLEWATERSBELLEWOODSTHE AMORE
DEC 20160130
NOV 20161270
OCT 20162113
SEP 20164173
AUG 201614375
JULY 2016704236
JUN 2016431313
MAY 2016401129
APR 2016201449
MAR 20167325
FEB 2016121014
JAN 2016141024

Source: URA, PropertyNet.SG Research

Limited Choices by Location

Given that the upcoming new EC launches will be in Choa Chu Kang, Yio Chu Kang & Anchorvale, buyers preferring other localities have limited or no choice. For example, if buyers are looking to stay in Jurong, Westwood Residences and Lakelife are the only Executive Condominiums available. For Canberra, they can decide between The Brownstone or The Visionaire.

Safer & Wiser Investment Option

In today’s property market, private residential, commercial, industrial properties are facing times of uncertainty, making buying an Executive Condominiums a safer choice and a wiser investment decision. In fact, a research done by OrangeTee based on historical data, first-hand owners of all privatized ECs are sitting on considerable gains. But it is important to note that of the 21 EC projects they studied, those who bought before the Asian financial crisis, 13 EC made a loss after five years. So, if you are able to hang on to your property, you are highly likely to enjoy good capital appreciation.

However, you may argue that if you are holding onto a private property for 10 years too, you too will enjoy considerable capital appreciation. Yes, you are right to an extent but you could enjoy more capital appreciation through a new Executive Condominiums. The primary reason is that an Executive Condominium is typically priced 15 to 20% lower than a Private Condominium during launch. After the Executive Condominiums have hit 5 years, the price gap of Executive Condominium to a Private Condominium narrows to 9%. After 10 years, this gap narrows further to 5%. And as Minister Koh Boon Wah describes, an EC is upmarket Lexus car at the much lower price of a Toyota Corolla (see video below).

What to expect in 2017?

Despite a growing global economics uncertainty, Executive Condominiums are expected to have healthy transaction volume in 2017 as it is considered a safer property class. Furthermore, with more existing new Executive Condominiums expecting to be completed soon, upgraders are expected to come into the Executive Condominiums market and make their purchase in 2017. So, if you interested in getting an Executive Condominium, do start looking around, work out your property budget, do your research and make your decision soon before your preferred Executive Condominiums are snapped up by other buyers.

Oh! Before you go, do hope you can share with our readers your thoughts on the market for Executive Condominiums in 2017 by leaving us a comment below =)

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