Category Archives: Executive Condominium

Executive Condominium site at Sengkang goes on sale

An Executive Condominium (EC) site in Sengkang which could yield about 653 homes has been released for public tender, the Housing and Development Board (HDB) said on Wednesday (Jun 29).

The 21,014.6 sqm site in Anchorvale Lane is located beside Punggol Reservoir and can be accessed via Tongkang LRT station.

The site is on the confirmed list of the Government Land Sales Programme for the first half of this year, which means the site is put up for sale even if there are no initial expressions of interest by developers.

The tender for the 99-year leasehold site will close at 12pm on Aug 23, HDB said.

Source : Channel NewsAsia – 29 Jun 2016

Private home sales down in April despite more units launched

Sales of new private homes fell 11.6 per cent in April despite more property units being launched.

Excluding executive condominiums (ECs), property developers sold 745 units last month compared with the 843 units sold in March, data from the Urban Redevelopment Authority (URA) showed on Monday (May 16). Including ECs, 1,291 units were sold, down from March’s 1,328 units.

Excluding ECs, 900 units were launched in April, compared with 682 units the previous month. Including ECs, 2,160 units were launched, compared with 1,216 units in March.

The top selling project in April was the Sturdee Residences in Jalan Besar, followed by EC developments The Visionaire and Parc Life, both in Sembawang.

Source : Channel NewsAsia – 16 May 2016

Sim Lian’s Wandervale project draws strong demand

SIM Lian Group’s four-bedroom units at Wandervale – the first executive condominium to be launched this year – have been fully sold out.

In addition, about 60 per cent of the 534-unit development in Choa Chu Kang has been booked as at April 19 despite a challenging economic environment, said Sim Lian in an announcement to the Singapore Exchange.

Of the 320 units sold to date, approximately half were booked by HDB upgraders, while another 20 per cent of the current Wandervale homebuyers made their purchase under the Fiancé/Fiancée Scheme.

According to the Singapore-listed property developer and construction group, the larger units were the most popular. The 82 four-bedroom units were the first to be completely sold.

ECs: Gaining value over the long term

Demand for Executive Condominiums (EC) has slowed sharply in the past two years, following the introduction of cooling measures by the Government. Demand for the hybrid housing type was red hot in 2012 to 2013, when 14 out of 16 new EC projects were at least 33 per cent sold within the first month of their launches.

To cool the EC market, the Government implemented measures in late 2013, including a 30 per cent Mortgage Service Ratio (MSR) and a resale levy for second-time buyers. These measures successfully clamped down on EC demand and, in 2014 to 2015, only one out of the 11 new projects managed to sell at least 33 per cent within the first month of their launches.

MSR, a loan curb to promote financial prudence, dictates that mortgage payments must be within 30 per cent of the borrowers’ monthly income. A resale levy is also imposed on buyers who had previously owned and sold a subsidised flat and now wish to purchase an EC from a developer where the land was launched or sold on or after Dec 9, 2013.

ECs were first introduced in 1996 as a public-private housing hybrid catering to the sandwiched income group, which, in today’s context, are households with incomes ranging from S$12,000 to S$14,000. Like regular condominiums, ECs are designed and built by private developers. EC buyers have to fulfil a Minimum Occupation Period (MOP) of five years before they can sell it in the open market to Singaporean and PRs. ECs can be sold to foreigners only after 10 years, when they are fully privatised.


As ECs are pretty much condominiums with added restrictions, there is an embedded capital appreciation mechanism as the sale restrictions are lifted. After the five-year and 10-year marks, the price of an EC tends to “catch up” with that of a private condominium.

Based on an analysis on a basket of comparable ECs and condos, the average price gap between new condominiums and ECs is found to start about 20 per cent. This means a typical new EC is sold at a 20 per cent discount from the price of a comparable new private condominium.

The large price gap at launch can be largely attributed to the sale restrictions imposed on ECs and the difference in land and construction costs. Unlike private condos, ECs still fall under the purview of the Government and developers have to be conservative in their pricing.

Upon fulfilment of MOP, and at privatisation, the discount narrows to 9 per cent and 5 per cent, respectively. At the end of the MOP, ECs can be sold in the open market to Singaporeans and Permanent Residents (PRs). As most ECs are located in Outside of Central Region (OCR), or suburbs, where demand is largely driven by Singaporeans and PRs, much of the capital appreciation is achieved immediately after MOP is completed. Upon privatisation, ECs can be sold to foreigners, increasing the potential demand pool. However, as the increase in demand is not substantial, the price gap only narrows marginally.


There are 21 EC developments that are more than 10 years old and have been privatised. By matching caveats, we analysed their percentage profits at the completion of their MOP and at privatisation. The results show that not all ECs are “sure-win” investments at MOP.

Out of 21 projects, 13 projects made a loss after MOP completion, and the remaining eight projects managed gains of more than 20 per cent. Market timing was the main differentiating factor between the “losers” and “winners”. The 13 projects that sold at a loss at MOP were launched during 1996 to 1999. In 1996, just before the 1997-1998 Asian Financial Crisis, property prices were at their peaks. Projects that were launched during 2001 to 2005, a period of sluggish growth, managed to achieve returns of at least 25 per cent at MOP. These projects benefited from the subsequent upturn of the Singapore property market.

At privatisation, all the EC projects were profitable. Notably, three developments stood out: Bishan Loft, Nuovo and The Dew. These three projects managed to achieve better returns compared with their peers due to their good locations and surrounding available supply.

On the other hand, the bottom three — Windermere, Chestervale and Pinevale — managed gains of less than 10 per cent at privatisation. These projects have greatly underperformed the market, considering the long investment time frame. They were launched at peakish prices, which made it difficult to achieve substantial profits in subsequent years.


There were 1,540 vacant EC units as of the end of 4Q15, according to data from the Urban Redevelopment Authority (URA).

Currently, the EC vacancy rate stands at 8.4 per cent. The increasing number of vacant EC units can be largely attributed to the increasing number of completed supply and the time lag between project completion and owners moving in.

But it is plausible that some owners are buying ECs purely for investment purposes and are choosing to leave it empty during the MOP. However, does it make sense for an eligible buyer to purchase an EC (leaving it empty during the MOP) or a condominium unit, purely for investment purposes?

In a hypothetical scenario, we assume that a couple is looking to invest in either an EC or a private condo. They have another home for occupation, perhaps their parents’, which is not under their names, and they plan to leave the EC unit empty during the MOP.

In today’s market, the median unit cost of an EC is S$797 per sqf. For a 1,098sqf unit, the purchase price will be about S$875,000. Applying the aforementioned 20-9-5 per cent price gap between condos and ECs, a comparable condo unit would cost S$1,094,000.

We assume they have a household income of S$14,000 and take up a mortgage of 80 per cent loan-to-value (LTV) for 25 years at a fixed rate of 2.5 per cent per annum. Rents for the unit are fixed at S$3,000 a month during the period of 10 years. For simplification, other costs such as stamp duties, maintenance fees, taxes, have not been included in this example.

Five years after completion, we assume that the value of the condo has appreciated by 10 per cent. Assuming the price gap between condos and ECs narrows to 9 per cent upon fulfilment of MOP, the EC should have appreciated by 25 per cent.

Despite the superior capital appreciation ECs enjoy in the first five years, the private condo still outperforms the EC in the mid-term (five years). This is because the rental income from the condo can be used to offset the monthly mortgage payments, whereas an EC cannot be fully rented out during the MOP.

Therefore, the EC investment incurs higher net holding costs in the first five years compared with the private condo, and these overwhelm the superior EC capital appreciation.

However, at privatisation, the EC would outperform a private condo, assuming the condo appreciates by 20 per cent and the price gap narrows further to 5 per cent. After MOP, the couple can now rent out the entire EC and mitigate their holding costs. With holding costs significantly defrayed by rental income, the capital appreciation effect in ECs can dominate. As such, the EC is now able to outperform the condo, 10 years after MOP.

According to the results above, it seems that buying an EC and leaving it empty for the first five years would be an inferior investment compared with buying a private condo and renting it out. Despite the higher condo price tag, net holding costs are lower due to rental income.

However, in the longer term, the EC would prove to be a better investment. This is mainly due to the lower initial purchase price and the inflow of cash due to rental income (year six to year 10) as restrictions are lifted.


With the current measures cooling the market, EC prices have come off their peaks and have started to move towards the S$750 to S$770 psf range. Previously only constrained by the Total Debt Servicing Ratio framework (TDSR), new ECs are now bound by a 30 per cent MSR, which has shrunk the current demand pool. Developers have also moved to ensure that new units remain affordable.

However, after the five-year MOP is completed, resale ECs would not be placed under the 30 per cent MSR restriction and would only be bound under the TDSR framework. This would expand the demand pool and should bode well for EC prices.

In summary, ECs are poised to be a good long-term investment, given their subsidies and lower prices compared with private condos.

Based on historical data, first-hand owners of currently privatised ECs are sitting on considerable gains.

However, not all ECs are equal: Depending on the location, available surrounding supply and price, the rate of capital appreciation can differ drastically between projects.

By Ms Celine Chan and Mr Wong Xian Yang – research analyst and senior manager of research at property firm OrangeTee.

Source : Today – 26 Feb 2016

Are ECs a better long-term investment than condos?

Prices of executive condominiums (ECs) do catch up with private condos after the initial five-year minimum occupation period (MOP), and even more so when they are fully privatised 10 years after purchase.

A study by OrangeTee has found that the average price gap between new condos and ECs starts at around 20 per cent, due to the sales restrictions that apply to ECs, as well as their lower land and construction costs.

But upon fulfilling the MOP and at privatisation, the discount narrows to 9 per cent and 5 per cent respectively.

At the end of the MOP, ECs can be sold in the open market to Singaporeans and permanent residents; upon privatisation, ECs can be sold to foreigners.

This is not to say that buying an EC is a sure-profit investment, as history shows that much still depends on the initial purchase price.

By matching caveats at 21 EC projects already privatised and analysing their profits made at the end of five and 10 years, the study found that 13 projects made a loss after five years, mostly because they were bought at the boom period before the Asian financial crisis. The remaining eight projects managed gains of over 20 per cent.

But at privatisation, all the EC projects became profitable. How much money owners made depended on the ECs’ locational attributes and surrounding supply at the time of sale.

“Based on historical data, first-hand owners of currently privatised ECs are sitting on considerable gains,” the report said.

The report also alluded to a trend that The Business Times had highlighted in an article in January – that increased vacancy rates may be a sign that buyers are starting to treat ECs as an investment product, as young-couple EC buyers continue to live with their parents after marriage while waiting for EC prices to re-calibrate over time before they sell.

OrangeTee said this trend is plausible. But its study found something even more surprising. Comparing between buying an EC and a private condo and holding each for 10 years, the report said that the EC could in fact be the better long-term investment due to their higher internal rates of return over 10 years.

This is because of their subsidies and lower prices compared to private condos. Also from year six onwards, entire EC units are allowed to be rented out, and their rentals tend to be on a par with private condos’. This helps to significantly defray their holding costs.

The hypothetical study assumed a 1,100-square-foot EC home bought for S$875,000, and a comparable condo for S$1.09 million.

The hypothetical couple has a household income of S$14,000, with a not very financially prudent loan-to-value of 80 per cent for 25 years at a fixed rate of 2.5 per cent per annum.

Rents for both units are fixed at S$3,000 per month. To simplify matters, other costs such as stamp duties, maintenance fees, and taxes were not considered.

At the end of just five years, the private condo proved to be the better buy, because the EC was not able to offset its monthly mortgage payments with rental income, as regulations forbid renting out the whole unit. This dampened its otherwise stellar capital appreciation.

But once rental restrictions are lifted, the EC quickly outperformed the condo.

Asked if the findings, which support an investment case for ECs, mean that the partly state-subsidised housing designed for the “sandwiched class” home buyer has become irrelevant, OrangeTee’s research analyst Celine Chan said no.

“(This is) given the significant price gap between ECs and private condos. ECs provide an affordable option to HDB upgraders or first timers who aspire to achieve a higher standard of living. Though some may plausibly be buying ECs for investment, majority are buying them for their own occupation,” she said.

BT – 25 Feb 2016

Tepid showing in executive condo market continues

The response to the latest batch of executive condominium (ECs) projects has been tepid, with about 2,200 EC units remaining on the shelves as of June 2015, the highest in almost a decade.

The largest EC development to date, Sol Acres, received 800 e-applications for its 1,327 units when online subscription closed on Sunday (Jul 26), while The Brownstone EC, located along Canberra Drive, sold just under a third of its 638 units in the opening weekend.

Sol Acres EC will open for booking on Aug 22. Developer CDL said the units in Choa Chu Kang were sold at an average of about S$810 psf, with prices starting from S$596,000 for a two-bedroom, S$695,200 for a three-bedroom, S$835,200 for a four-bedroom and S$1.316 million for a penthouse.

In a statement, it added that the three- and four-bedroom apartments enjoyed particularly good take-up rates. All six of the five-bedroom penthouses have been sold out. About 65 per cent of those who purchased units at The Brownstone were first-time buyers, CDL said.

Developers of The Vales EC, which opened for booking more than a week ago, sold about 100 units, less than 20 per cent of the total 517 units. Developer Singhaiyi said most of the units sold are the three- and four- bedroom units.

In November last year, developers of Lake Life EC sold more than 95 per cent of the units in just two days. Since then, response in the market to new projects has been less than warm. Market watchers said it is a sign that recent projects are adding to the pool of unsold units.

Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants said: “During the heyday of the EC launch market that was in 2011 to 2013, the number of e-applications each EC project can sometimes achieve is double of the number of units available.

“One of the reasons why the demand was strong was also because of rising HDB resale and condominium prices. When prices of the mass market condos are rising very rapidly, it begins to go out of reach of some HDB upgraders who will then turn to the EC market as an alternative. But right now, the prices of mass market condominiums are sliding and HDB resale prices are also fairly stagnant.”

Market watchers also said the 30 per cent mortgage servicing ratio cap and resale levy imposed on second-time buyers have also curbed demand. Second-timers have to pay up to S$50,000 levy when buying an EC unit.

“For an EC project, typically the number of second-timers is about 50 per cent, so definitely the resale levy has hit them quite hard,” senior manager of research and consultancy at OrangeTee Wong Xian Yang said.

With talk of an impending increase in the income cap for EC buyers, analysts said this could provide some respite for the EC market.

CEO of Century 21 Singapore Ku Swee Yong said: “Revising the household income cap on EC market would definitely help to increase the demand. But a family with household salary of S$13,000 or S$14,000 might also consider the ample supply of private properties.”

Analysts also said this is especially so if mass market condominiums are reasonably priced. For instance, buyers were quick to snap up units at High Park Residences condominium in Fernvale, which average below S$1,000 psf. Almost 80 per cent of the 1,390 units have been sold.

Source : Channel NewsAsia – 28 Jul 2015

Private property prices down for 7th straight quarter: URA

Prices of private residential properties in the second quarter fell by 0.9 per cent from the previous quarter – the seventh consecutive quarter of decline, the Urban Redevelopment Authority (URA) said on Friday (Jul 24).

The price decline was observed across all segments of the private residential property market, URA said. Prices of non-landed properties in the Core Central Region (CCR) and Rest of Central Region (RCR) declined by 0.6 per cent from the previous quarter, while prices in the Outside Central Region (OCR) fell by 1.1 per cent. Prices of landed properties declined by 1 per cent.

Rentals of private residential properties fell by 1.1 per cent from the previous quarter, compared with a 1.7 per cent decline in the January to March period.


Developers launched 2,099 uncompleted private residential units excluding Executive Condominiums (ECs) in the second quarter, up from the 1,189 units launched in the previous quarter, URA said. A total of 2,116 private residential units (excluding ECs) were sold by developers during the quarter, compared with 1,311 units in the first quarter.

A total of 480 EC units were launched during the quarter, and 439 units sold over the same period, up from the 326 units sold in the previous quarter.

The number of resale transactions rose to 1,827, up from the 1,250 transactions in the first quarter. Resale transactions accounted for 44.5 per cent of all sale transactions during the quarter, compared with 47.1 per cent in the previous quarter.

There were 161 sub-sale transactions, up from the 94 transactions in the previous quarter. Sub-sales accounted for 3.9 per cent of all sale transactions, up from the 3.5 per cent recorded in the previous quarter.


As at the end of the second quarter, there were 61,237 uncompleted private residential units (excluding ECs) in the pipeline, compared with 68,201 units in the previous quarter. Of this number, 24,435 units remained unsold. Adding the 14,701 upcoming EC units, there are a total of 75,938 units in the pipeline, according to URA.

Based on expected completion dates reported by developers, 13,191 units (including ECs) will be completed in the second half of 2015, URA said. Another 25,841 units (including ECs) are expected to be completed in 2016.

Source : Channel NewsAsia – 24 Jul 2015

About 640 e-applications received for Brownstone EC

Developers of the latest executive condominium (EC) project The Brownstone have received about 640 e-applications since they first opened on Jul 10.

City Developments said e-applications for the 638-unit EC will close later on Monday (Jul 20), with booking to start this Saturday.

E-applications are typically an indication of interest in an EC project, although applicants are not obliged to buy when sales open. Indicative pricing shows that units at The Brownstone start from S$599,000 for a two-bedroom condominium, to about S$1.3 million for a five-bedroom penthouse.

Several EC projects will come on the market this month. The 517-unit The Vales at Anchorvale Crescent already opened for sales last Saturday, while e-applications for the 1,327-unit Sol Acres, located at Choa Chu Kang, are underway.

Source : Channel NewsAsia – 20 Jul 2015