Another EC plot at Sengkang to be launched in 2 weeks

AN executive condominium (EC) site at the junction of Sengkang East Avenue and Buangkok Drive will go on sale in about two weeks – and is expected to be warmly received by developers.

The Housing & Development Board said yesterday it will release the site, which is on the government’s reserve list. Sites on this list are released after a developer commits to bid at or above a minimum price acceptable to the state – in this case, $103.8 million or $189 per sq ft per plot ratio (psf ppr).

The site will be the third EC plot sold this year. It will add 465 units to the supply of public housing, taking EC supply to 1,365 units in first half of 2010. Two EC sites – at Sengkang and Yishun – with a combined yield of about 900 units have been sold already this year.

‘Following the enthusiastic response from developers for the EC sites at Compassvale Bow and Yishun Avenue 11, it is no surprise a third site has been triggered,’ said Li Hiaw Ho, executive director of CBRE Research.

PropNex chief executive Mohamed Ismail said that given the slowly growing gap between private property and HDB prices – the private property price index for Q1 2010 went up 5.1 per cent, while HDB’s resale price index went up only 2.7 per cent – ‘the time is right for the launch of more ECs to cater to the sandwiched class of those who may not qualify for an HDB flat yet are unable to afford a private property’.

Analysts expect the latest site to fetch between $200 and $300 psf ppr. The site is adjacent to Park Green EC and near The Rivervale and Florida ECs, where units were sold at $520 psf to $600 psf between October 2009 and February 2010.

‘Developers should be able to break even around $500 psf after construction and other costs, and the selling price should be around $550-600 psf, which is about 25 per cent below mass market prices for similar private properties,’ said Mr Ismail.

Eugene Lim, associate director of ERA Asia-Pacific, has a higher estimate – he expects the upcoming flats to be priced at $620-$680 psf.

Source: Business Times, 2 Apr 2010