Executive Condominium (EC) began in 1995 to help recent graduates achieve their dreams of getting their home. There is not much difference between private condominiums and the executive ones as they are constructed by the same developers. With these houses there are many regulations the buyers have to follow, for example, a buyer cannot sell the house till five years after the purchase.
Investing in an EC for Profit
Reports suggest that in the year 2015 there was an increase of 62% in the condominiums bought from that of the previous year. Though the buyers had increased in 2015 the previous years, the buyers took up the new houses in the first month after being constructed. That number fell to 20% in 2015 which was 59% and 39% in 2013 and 2014 respectively. These numbers reportedly fell due to the buyers more interested in private condominiums.
Hundred Palms Residences EC Investment Potential
Due to the EC being under the scope of the government there is a discount of 20% on them but after a period of 5 years when the regulations are uplifted there are every chance the houses narrow the gap with their prices between the private and them. Investors get the opportunity to sell the condominiums at a higher price once the EC’s have been privatized. An example will be Yio Chu Kang Road EC by Hoi Hup Realty. In recent year 8 out of 21 EC projects made profits of more than 20%. The prices of new EC’s have been around 800$ while the prices have private condos have fallen marginally over the past years.
Hundred Palms Launch Date
The CBRE head of research Mr. Desmond Sim has noted that the costs of the EC’s will be reduced further so as to clear the unsold condos. In particular, ECs in mature estate such as Hundred Palms Residences in Yio Chu Kang Road by Hoi Hup will be well liked by investors. The interest rate and the stagnant economy have affected the decision as there is an abundant supply of EC’s in the market but fewer buyers to be found according to Mr. Sim. From 2016 it has been estimated that the supply will meet the demand and the EC’s will have better amenities and features to attract young buyers who can have a lifestyle of a private condo in an executive one.
The critical issue in today’s market is whether there should be investments in these EC’s or not? EC’s give an incredible opportunity for young graduates and professionals with their lower prices compared to the other private condos available. It is even a good investment for buyers who are looking for long-term housing solutions with affordable prices and almost same the features that of the private condos. It may not be a good choice for short-term investors who are looking to make a profit in few years by reselling them as the regulations do not allow them to do so. Due to better locations of private condos the EC’s seem less inferior but as noted by many buyers after the regulations are lifted privatizing the Condos could raise their prices generating more profit.