Developers still keen on EC sites even as supply glut intensifies

A Yio Chu Kang site drew 10 bidders.

Developers are still interested in Executive Condominium (EC) sites despite lacklustre sales volumes and mounting new supply, with the latest land tender drawing ten bidders.

The tender for an EC site at Yio Chu Kang Road drew a top bid of $183.8 million, which was tabled by Hoi Hup Realty. This translates to $331 psf, with selling prices likely to hover at $750 psf to $800 psf.

“Despite the high numbers of unsold EC units, we are still seeing heightened interest in the EC segment. The rather high level of competition for the site could be due to its ease of accessibility via driving and proximity to Rosyth School,” said Eugene Lim, Key Executive Officer of ERA Realty.

Lim added that the site’s proximity to HDB flats provides a ready catchment pool for developers, with the final development likely to be oriented towards families with children.

Despite the strong interest from developers, analysts warn that the EC market will continue to face headwinds from high supply and weak buyer demand.

“Sales progress in the new EC market is being impeded by buyer resistance to current price levels,” noted Ong Teck Hui, National Director, Research & Consultancy at JLL.

Data from the Urban Redevelopment Authority (URA) show that sales in existing EC projects jumped 26% month-on-month in January, reversing five months of flagging sales after peaking in July 2015.

The better performing EC projects in January included The Amore, which sold 24 units at median price of $799 psf, The Brownstone, which moved 21 units at median price of $810 psf, and The Vales, which sold 16 units at median price of $803 psf.