Executive Condo (EC) bubble?

Lanteh

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...........................Land Cost (/sqft) Sales Launch (/sqft)
2003...........................$250........................$367
2010...........................$270........................$670
2011...........................$300........................$680
2012...........................$391........................$730
2013...........................$418........................$857
2014...........................$355........................$800
2015...........................$353........................$800
2016...........................$295........................$760
2017...........................$355........................$836

2020...........................$576.......................Est. $1,100/sqft

Below was the land tendering result in 2018.
Sumang: $583
Canberra Link: $558
Anchorvale Crescent:$576
Tampines Ave 10: $578


I have done a simple calculation based on my database of land acquisition cost and sales launch prices for all the ECs. The above prices listed above are in their median range. Years are based on sales launch, while land cost would be 2-3years before sales launch year.

Analyst forecast that the upcoming EC at Samang is going to breach the $1,100/sqft mark based on the record land acquisition cost.

When the EC first launched in the late 90's period, based on market prices today, they are a sure-win. How about nowadays? Any thoughts about this?

P.S: Sorry for the messy statistics. I cannot post any image yet due to insufficient post count.
 
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peacefulday

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In 2003, a cup of coffee shop kopi 0.50c and 2018 become $1.20. So coffee bubbles? Cny 2019 will raise soon.....

...........................Land Cost (/sqft) Sales Launch (/sqft)
2003...........................$250........................$367
2010...........................$270........................$670
2011...........................$300........................$680
2012...........................$391........................$730
2013...........................$418........................$857
2014...........................$355........................$800
2015...........................$353........................$800
2016...........................$295........................$760
2017...........................$355........................$836

2020...........................$576.......................Est. $1,100/sqft

Below was the land tendering result in 2018.
Sumang: $583
Canberra Link: $558
Anchorvale Crescent:$576
Tampines Ave 10: $578


I have done a simple calculation based on my database of land acquisition cost and sales launch prices for all the ECs. The above prices listed above are in their median range. Years are based on sales launch, while land cost would be 2-3years before sales launch year.

Analyst forecast that the upcoming EC at Samang is going to breach the $1,100/sqft mark based on the record land acquisition cost.

When the EC first launched in the late 90's period, based on market prices today, they are a sure-win. How about nowadays? Any thoughts about this?

P.S: Sorry for the messy statistics. I cannot post any image yet due to insufficient post count.
 

Lanteh

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Remember 2012? At the time, EC prices got so high that then previous minister, Mr. Khaw Boon Wan, stepped in to send a sharp message to developers. At any rate, this caused Mr. Khaw Boon Wan to warn developers “not to forget the fundamental premise of an executive condominium”, while they were busy trying to see just how much buyers would pay.

So during that period, the prices of EC were stable. When the new Minister took over, things are getting out of control.

IMO, the EC developers now are not focusing to sell EC to new couples as intended by the scheme. Most of them couldn't afford now which may result in unsold units. They are instead targeting the "flat upgraders" as a form of cheaper alternative of a new private condo.
 

pippo20

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Remember 2012? At the time, EC prices got so high that then previous minister, Mr. Khaw Boon Wan, stepped in to send a sharp message to developers. At any rate, this caused Mr. Khaw Boon Wan to warn developers “not to forget the fundamental premise of an executive condominium”, while they were busy trying to see just how much buyers would pay.

So during that period, the prices of EC were stable. When the new Minister took over, things are getting out of control.

IMO, the EC developers now are not focusing to sell EC to new couples as intended by the scheme. Most of them couldn't afford now which may result in unsold units. They are instead targeting the "flat upgraders" as a form of cheaper alternative of a new private condo.

Demand and supply basically, alot ec lands were launched these past few yrs, those earning combined $5k also applied (i recall big big banners at hdb hub earning $2.5k each can apply too lol) and got their units in sol acres, signature at yishun, ulu ulu sengkang punggol woodlands jurong west cck pasir ris etc etc.
Now MND control supply, developers bid accordingly so only those earning $12-14k combined will apply. Low supply just means the top earners near the 14k cap will apply (if they are interested).
 

Dividends Warrior

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...........................Land Cost (/sqft) Sales Launch (/sqft)
2003...........................$250........................$367
2010...........................$270........................$670
2011...........................$300........................$680
2012...........................$391........................$730
2013...........................$418........................$857
2014...........................$355........................$800
2015...........................$353........................$800
2016...........................$295........................$760
2017...........................$355........................$836

2020...........................$576.......................Est. $1,100/sqft

Below was the land tendering result in 2018.
Sumang: $583
Canberra Link: $558
Anchorvale Crescent:$576
Tampines Ave 10: $578

Let's take the Tampines EC as an example.
Rough calculations:

Cost 1: Land Cost = $578
Cost 2: Developer's construction costs = $470 (estimate)
Profit Margin: 20% (estimate)
Selling price: $1257 psf

That means a 3-bedder is going to be more than $1.2m!? :eek::s22:
 

yoongf

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EC sites are 100% sold and occupied. This is the exact opposite of the definition of a bubble.

Nobody is forced to buy an EC at launch price. Willing buyer willing seller.

Nobody ( govt, developers, owners, agents, bankers) benefits from declining asset values, other than the future generation.

Too much of a good thing can also be bad. Its all abt prudence.
 

RyanJ

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...

When the EC first launched in the late 90's period, based on market prices today, they are a sure-win. How about nowadays? Any thoughts about this?

....

limited land, rising population, the general trend is up
 

fotoudavid

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李嘉诚, I think he once say.... Small country, population increase, the property prices will only go up.
 

SBC

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HPR will be TOP very soon. See if there are empty units out there.

EC has always been sandswitch class between HDB & condo. It is still closing up the gap.
 

PostCountWarrior[+1]

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...........................Land Cost (/sqft) Sales Launch (/sqft)
2003...........................$250........................$367
2010...........................$270........................$670
2011...........................$300........................$680
2012...........................$391........................$730
2013...........................$418........................$857
2014...........................$355........................$800
2015...........................$353........................$800
2016...........................$295........................$760
2017...........................$355........................$836

2020...........................$576.......................Est. $1,100/sqft

Below was the land tendering result in 2018.
Sumang: $583
Canberra Link: $558
Anchorvale Crescent:$576
Tampines Ave 10: $578


I have done a simple calculation based on my database of land acquisition cost and sales launch prices for all the ECs. The above prices listed above are in their median range. Years are based on sales launch, while land cost would be 2-3years before sales launch year.

Analyst forecast that the upcoming EC at Samang is going to breach the $1,100/sqft mark based on the record land acquisition cost.

When the EC first launched in the late 90's period, based on market prices today, they are a sure-win. How about nowadays? Any thoughts about this?

P.S: Sorry for the messy statistics. I cannot post any image yet due to insufficient post count.
how much has rent risen?
 

dnsfpl

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李嘉诚, I think he once say.... Small country, population increase, the property prices will only go up.

another reason is cpf interest
most will not sell if they dont receive cash proceed

imagine EC bubble burst (eg drop by 10-15%), i think even more will upgrade
so unlikely to burst but more of correction, app 5-10% drop maybe

if developer dares to gamble, usually TOPed units have very strong in demand, at least 20% increase based on past transactions
 

cet87

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another reason is cpf interest
most will not sell if they dont receive cash proceed

imagine EC bubble burst (eg drop by 10-15%), i think even more will upgrade
so unlikely to burst but more of correction, app 5-10% drop maybe

if developer dares to gamble, usually TOPed units have very strong in demand, at least 20% increase based on past transactions

Hows your 365 days of happiness? :)
 

fotoudavid

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another reason is cpf interest
most will not sell if they dont receive cash proceed

imagine EC bubble burst (eg drop by 10-15%), i think even more will upgrade
so unlikely to burst but more of correction, app 5-10% drop maybe

if developer dares to gamble, usually TOPed units have very strong in demand, at least 20% increase based on past transactions

Must see at what price the ec commands when price drop... If it ever drop. Anyway the price can't increase in this period now for ec.
 

cet87

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Few years back, there are many EC project on sale. So buyers have a lot of choice to choose from. Despite of the resale levy, nearly all projects are sold out but it took them a long time.

Now released very few ECs, the selection is lesser unless you looking at Northwave.
With the success of hundred palms EC, future EC will be priced higher.
 

Clazav

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Ec bubble very hard to happen.. Got hdb upgrades and the high price of pc to support..
 

cet87

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The last cheapest EC is Sol acres. The design is nice and many facilities.
Those who interested to buy already missed the boat.

EC price has raised a lot.
 
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