New launches for ECs have crossed a new high in 2022.
North Gaia EC located in the edge of the Yishun estate is now being sold at an average of $1302 PSF.
That is a significant price.
For reference, North Park Residences – the Yishun condo that is located directly above Northpoint Shopping Centre and directly opposite Yishun MRT – was launched at $1263 PSF back in 2017.
But that was a fully private condo without the constraints and limitations of an EC – plus it is located in one of the most convenient locations in Yishun.
This where we are on the pricing of Executive Condominiums in Singapore for 2022 and beyond.
In this article, I am going to explore what are the land prices for the recent condo launches.
Prices of Land Sold In 2019 – 2020 (Pre-Pandemic period)
In March 2020, Parc Greenwich EC and the Watergardens condo has an estimated breakeven price of $998 PSF PPR and $1224 PSF PPR.
The EC land was sold at 20% cheaper than the land for a fully private condo.
Prices of Land Sold In 2021 – 2022
You can see the progressive increases in EC land prices as we enter 2021.
Gone are the days when EC land is cheap and the developer can afford to sell you at cheap prices with big units. It was worth it to buy and wait – back then.
At the same time, most ECs are not only located at OCR areas – most of them are located in relatively inaccessible spots.
They are not usually within close proximity to MRT stations .
Right now, you can see that Tengah EC is going to be even more expensive than North Gaia EC prices.
With that in mind – do you think it will affect your capital gains if you plan to sell your EC apartment when it reaches MOP in the future?
Some might have thoughts of getting a private condominium instead for the chance of better capital gains.
So which is a better choice?
Let’s do a comparison analysis to see how ECs had actually performed for the past 10 years compared to Private Condominiums within the same vicinity.
Example #1: Ecopolitan EC vs Treasure Trove vs Park Centros
I selected these 3 developments due to their comparable TOP dates.
As shown in the map, Ecopolitan which is a EC development located beside the TPE expressway.
And the other 2 private condominiums – Treasure Trove and Parc Centros – are located in close proximity to Punggol MRT .
Take note also:
Owners of Ecopolitan EC are only able to sell when it reached its 5-year MOP.
The other 2 mentioned private condo owners will have a headstart over EC owners – these owners can sell before TOP as a subsale unit.
They can also sell on the 4th year mark when they are no longer subjected to SSD.
Compare that to EC owners who can only sell after 8 years (3 years construction + 5 years MOP).
So let’s check out the performances of these 3 developments:
Ecopolitan EC performed the best – showing a price gains of almost 42%.
The volume of transactions is still lower due to the fact that it only hit MOP last year.
Its location is not as great as it is located nearer to the as the other 2 developments but performance wise – it is almost on par to the other 2 condos.
Example #2: Blossom Residences EC vs Eco Sanctuary vs Hillion Residences
Blossom Residences EC is directly located next to KJE expressway.
Not the most optimal location and not as accessible as compared to other 2 private condos.
Hillion Residences is an integrated development with Bukit Panjang MRT.
Eco Sanctuary is located right next to a nature park.
Let’s see how they perform.
You can see that Blossom Residences EC had performed better than the 2 other private condominiums that have better and sought after location.
You might say the obvious reason is because of the lower entry price of Blossom Residences.
But I think some other factors should also be considered.
If you look at the map, Blossom Residences EC is surrounded by HDBs.
This attracted HDB upgraders who might want the luxury of condos but without straying too far from where they are comfortable at.
There is a ready pool of HDB upgraders living in this area who might have thoughts of going to the next rung in the property ladder in Singapore.
Example #3: Lake Life EC vs Lake Grande vs Lakeville
This is an interesting example as it is currently happening.
Lake Life EC would hit the 5-year MOP mark this year in 2022.
Location-wise, it is further away from Lakeside MRT.
The view of the lake is also not as great as the other 2 condos.
Lakeville and Lake Grande are also within 1km of Rulang Primary School.
On the other hand, Lake Life EC is quite a distance away.
Let’s check out the performance of these 3 developments.
Lake Life EC is the top performer. It started off with the lowest entry price.
Despite having a poorer location in comparison to Lakeville and Lake Grande, it generated the highest gains.
Conclusion
If you are looking at capital gains, it is clear the lower entry prices of ECs are important for success.
But you will need to consider factors like:
- lesser accessibility
- longer period to hold on (3 years construction + 5 year MOP)
- part of a family nucleus
- paying a significant resale levy especially if you are a current HDB owner
- being able to pass through and qualify for the various HDB rules and regulations
At the same time, the land prices for EC seems to be catching up to private condos.
However, there was this interesting reply by the Ministry of National Development in early Jan 2020.
Executive Condos will continue to remain “affordable” but it is interesting to note how they plan to do it – it is by making sure only a certain segment of people are qualified to buy it.
I wrote my thoughts about EC and the blindspots you need to be aware of here.
In the current environment of high inflation rate, a good property is your best hedge to protect the value of your monies.
With the right property selection, not only do we get good returns – but we can be sure of covering the rising costs of living in Singapore.
Do take note in this article, I am neither endorsing private condos nor ECs as your next property purchase.
It really depends on your own needs and how do you view your home as – is it a form of investment or simply a roof over your head?
In my opinion, since you are already going to park significant sums of your CPF OA inside this property – you might as well get one that can you better returns than the current 2.5% returns that the CPF Board can provide.
But not every property will make you money – so you need to be extra careful especially in this current inflationary environment.
If you have further questions, I invite you to contact me for a no-obligation discussion.
We can do a detailed financial assessment and weigh your budget versus your needs against the current options available.
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