Wednesday, October 24, 2012

Scorching EC market sees million dollar deals

An executive condominium (EC) unit in Yishun was recently sold for a record price of S$1.61 million, underscoring how hot this segment of the property market is right now, according to a Savills report.

Data from the Urban Redevelopment Authority (URA) revealed that the four-bedroom, two-storey dual key 1 Canberra penthouse developed by MCC Land was sold in August for S$595 psf on a 2,713 sq ft area.

Inclusive of the Yishun property, over 300 new ECs have been sold above S$1 million thus far, noted Savills. Of this number, half were transacted during the first eight months of 2012.

Healthy interest in ECs has been mainly attributed to the growing number of affluent buyers, low interest rates, high incomes and EC buyers being immune to the recent tightening measures.

Many owners have also pocketed big gains from lucrative deals involving resale HDB flats; hence, “many HDB upgraders who now have more to spend on their next property, which inevitably would be an EC”.

Savills also said there were more million-dollar ECs in the market. In February, two sky suites at The Rainforest sized at 2,476 and 2,433 sq ft, changed hands for S$1.58 million (S$637 psf) and S$1.56 million (S$640 psf) respectively.

In addition, 16 EC units at The Tampines Trilliant, Arc at Tampines, Riverparc Residence, Esparina Residences and Watercolours breached the S$1.3 million mark. Aside from good facilities and nearby amenities, ECs also attract buyers due to their spaciousness.

Meanwhile, the government’s latest property cooling measures, capping home loan tenures at 35 years, will have limited impact on the EC market. But the growing demand for more expensive ECs “may raise some red flags”.

Moving forward, Savills expects EC prices to ease gradually, in view of the competition between ECs and mass market condos. As such, “buyers may have to exercise more prudence in their purchase of EC units priced above S$1 million due to the risk of interest rates rising and the weakening global economy”.

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