Published November 24, 2010
PROPERTY
EC housing land prices bouncing back?
By KALPANA RASHIWALA
THERE appears to have been a rebound in the pricing of executive condominium (EC) housing land.
A tender for an EC site at Tampines Avenue 8 yesterday drew a top bid of $302.14 per square foot per plot ratio (psf ppr) from a tie-up between Hoi Hup Realty, Sunway Developments and SC Wong Holdings. This land price is 15 per cent higher than the $263 psf ppr winning bid for an EC plot in Pasir Ris sold at a tender that closed last month. The latest tender in Tampines drew six bids.
Two schools of thought have emerged on the latest tender result. Some market watchers attribute the higher top bid at yesterday's tender to Tampines having more amenities than Pasir Ris and as Hoi Hup director Wong Sjew Hung says, 'Tampines being a more mature town than Pasir Ris'.
However, Cushman & Wakefield senior manager (Asia-Pacific research) Ong Kah Seng argues that the higher pricing for the latest EC site 'is due not just to location but increasingly positive market sentiment as reflected in strong sales by developers'.
He also noted that EC projects are being well received as they're more affordably priced, at about 15-20 per cent below 99-year leasehold suburban private condos (in similar locations), which are scaling record prices.
ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years. After that period, they are fully privatised. EC projects, which boast private condo facilities, are an attractive housing option for buyers who meet the eligibility criteria, including a monthly household income ceiling of $10,000.
Credo Real Estate executive director Ong Teck Hui said that the top bid for the Tampines plot being 15 per cent higher than the Pasir Ris plot could be due also to the latest plot having a better configuration and this being the first EC site to be released in Tampines this year.
Nonetheless, he said that the top bid yesterday is an optimistic one given that winning bids for 99-year private condo plots in other HDB new town locations have been in the $320-345 psf ppr region lately.
The Hoi Hup consortium's top bid at yesterday's tender was about 8.6 per cent higher than the second highest offer of $172.8 million or about $278 psf ppr by Frasers Centrepoint and Lum Chang Building Contractors. City Developments unit Grand Isle Holdings bid $260 psf ppr and EL Development offered $239 psf ppr.
NTUC Choice Homes Co-op offered $238 psf ppr and Sim Lian was the lowest bidder, at $228 psf ppr.
Hoi Hup's Ms Wong said that the plan is to develop a 16-storey project with 575 units on the Tampines Ave 8 plot. About 60 per cent of units will be three-bedroom compact apartments of slightly over 1,000 sq ft; 20 per cent will be two-bedders; slightly more than 10 per cent will be dual-key units comprising a studio unit attached to a two-bedder. The rest will be four-bedders.
'Our breakeven cost will be slightly over $600 psf and we're looking at an average selling price of below $700 psf.'
CBRE Research executive director Li Hiaw Ho said: 'There will be a market for this new EC project if it's priced 15-20 per cent below the recently released Waterview.'
Waterview, a 99-year leasehold private condo a stone's throw away from the latest EC plot, has an average price of $838 psf. It is being developed by Sim Lian
Source: www.businesstimes.com.sg
