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Wednesday, March 7, 2012

2nd-time buyers get a better shot at buying executive condos in Singapore

Better chances: From 5% previously, 30% of executive condominium units will now be set aside for second-time buyers in Singapore. – AFP

SINGAPORE: When the news broke last Friday that second-time buyers of public housing units would be given more chances to purchase executive condominium (EC) units, Eddie Luo, 37, was elated.

The engineer and his wife were seeking to move their two children and his father from their five-room flat in Sengkang, and had failed to get a unit at Twin Waterfalls in Punggol on their first try. They are happy now that they have landed themselves a unit.

Luo was among the many who thronged the Punggol showroom on Sunday, following the announcement of a revised quota of flats for second-timers namely those who have previously enjoyed a housing subsidy from the government.

From 5% previously, 30% of units in ECs will now be set aside for this class of house hunters. ECs are sold by private developers with condominium-like facilities, but come with conditions set by the Housing Board, such as a five-year minimum occupancy period.

All 182 units of Twin Waterfalls set aside by developer Frasers Centrepoint for second-timers were snapped up in two hours.

Its spokesman, Elson Poo, said the strong demand was a testament to the attractive pricing of the project, which is going for S$698 per sq ft (psf).

In all, 460 of the 728 units have been sold.

The response for the 670 units in the other executive condominium project being marketed, the Tampines Trilliant, was more muted.

A Sim Lian group spokesman said that of the 168 units released for second-timers on Saturday, about 110 units were sold within the day.

About 300 units, which go for S$766 psf, have been sold.

Ultimately, the demand boiled down to price as well as the quota, said SLP International's head of research Nicholas Mak.

“The higher the price goes, the more skewed towards second-timers the number will be, because first-timers may not be able to afford the more expensive developments,” he said.

“Going forward, you might see more ECs being dependent on second-timers or HDB upgraders rather than first-timers, given the glut of affordable Build-To-Order (BTO) flats coming onstream.”

The government has promised to build about 25,000 new flats this year.

Based on Mak's data, the psf prices of ECs when they were launched in 1996 was about S$400; EC units now go from about S$700 to S$750 psf.

Nearby private condominium units are fetching S$820 to S$950 psf for comparable flat types.

On the other end of the scale, a larger BTO flat will cost S$250 to S$350 psf, and a resale flat, S$380 to S$550 psf.

“If second-timers continue to go for ECs, it may be feasible to revise the quota even further,” said Mak.

Poo agreed. Based on the sales at Twin Waterfalls, the 30% allocated to second-timers have already been taken up. Of the 70% reserved for first-timers, slightly less than half have been taken up.

“The government has responded to ground sentiment. But it could still be frustrating for the second-time buyer, who may have a stronger financial base but do not have the chance to buy EC units,” he said.

Colin Tan, the research head at Chesterton Suntec International, said such demand might continue, since second-timers felt they had a real chance at getting a choice unit now.

As a rule, the ratio of first- and second-timers are observed only within the first month of a project's launch.

After that, any eligible house hunter may buy, although the less-desirable units may be left by then.

Tan said he did not expect the quota to make a big impact on the market due to the small quantities, unless the government sold more land for ECs.

By ANN/The Straits Times

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