Date: 27 Dec 2010

Good response for Executive Condominiums

The government re-introduced Executive Condominium (ECs) in 2007 to increase housing options for the people. However, EC market only picked up in 2010 and to-date, eight sites were taken up by developers out of the nine sites released this year. Three projects have been launched, including The Esparina, The Canopy and Prive. 2010 is the year of ECs as over 1,050 units were sold in the fourth quarter of 2010. This surpassed the all time quarterly highs of EC new sales, which peaked in 3Q 2001 when 911 units sold.

Among other things, the strong take-up indicates keen interest for ECs units. As prices of private
residential properties move up rapidly and out of reach, ECs became the best alternatives for the
“sandwiched class”. By opting for ECs, homebuyers get to enjoy condo design and facilities at a
discount compared to nearby private properties, on top of a $30,000 CPF grant for those who
qualifies. An earlier study by Knight Frank Research showed that ECs appreciate in tandem with
private properties prices. Some ECs had even outperformed the capital appreciation of nearby private properties. This is attributed to the “discount” factor whereby ECs were sold at lower prices compared to the average prices of nearby condominiums. In some instances, the discount was as wide as 60% for the earlier projects and around 10% for recent projects in 2010. Once ECs reaches the 5-year and 10-year milestone, resale restrictions are lifted.

The Esparina, the first EC this year, received overwhelming applications, followed by The Canopy and Prive, while Austville Residences is expected be launched in January 2011.

Table 1- Take-up rate of recent Executive Condominium projects

The nature of EC buyers’ profile (income, purchasing power) means it is important for their houses to be close to public transport facilities. Therefore, buyers are more receptive for EC projects that are near to MRT stations, for example The Esparina (next to Buangkok MRT station) and Prive (near Kaladoor LRT station) which saw faster sales than The Canopy, which is further from Yishun MRT. Moving to 2011, there will be another 2,290 EC units on top of estimated 3,285 EC units from EC sites sold in 2010, totaling 5,575 EC units for the year. Given the positive buying momentum in market, coupled with favourable economic conditions and the attractive haracteristics of EC, sales volume is expected to increase by at least 30% q-o-q in the first quarter of 2010.

For further information, please contact:
Png Poh Soon, Associate Director, Head of Consultancy & Research,
Knight Frank Pte Ltd (65) 6228-7393

Ends

Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.