(SINGAPORE) NTUC Choice Homes Co-operative (NCH) and Chip Eng Seng (CES) are launching an executive condominium (EC) project in Punggol with a surprising feature - a deferred payment scheme (DPS).
Many in the property industry had assumed that the DPS was entirely scrapped in the boom year of 2007 to curb speculation. The two developers' move could trigger owners of other EC projects to also offer DPS.
NCH and CES are behind the 99-year-leasehold Prive, the first EC to come up in Punggol. The site is at the junction of Punggol Field and Punggol Road, and average selling prices will be between $660 and $690 per square foot (psf). There will be 680 apartments ranging from two to four-bedders, located across four 17-storey towers. The developers bought the plot from the government in June this year.
The developers will open the sales gallery on Dec 3 and allow viewings and applications up until Dec 7. Bookings will start on Dec 10 and home seekers have to gain entry to the gallery that day through a ballot.
Buyers can finance their homes through a normal payment scheme (NPS) or the DPS. Under the DPS, they need to pay only a 5 per cent booking fee and 15 per cent of the purchase price. They will not need to make further payments until the development obtains its Temporary Occupation Permit.
Developers of two earlier EC projects - Esparina Residences and The Canopy - did not offer DPS.
Several developers and consultants whom BT spoke to were surprised to learn that DPS was allowed for EC projects.
In October 2007, the government withdrew DPS for the sale of uncompleted private residential, commercial and industrial properties. The news release made no mention of ECs then.
Some industry players seem to have assumed that DPS was also disallowed for ECs. After all, ECs are seen as a hybrid of public and private housing. They have facilities comparable to private condominiums but carry public housing restrictions which are lifted only after 10 years.
Few might have thought of clarifying the rule change with the authorities, since the last EC launch happened some time back in May 2005.
Following some checks yesterday, BT understands that the withdrawal of DPS in 2007 did not apply to ECs. Some in the industry could have been 'a little presumptuous', said one developer who declined to be named.
Also, EC buyers have to fulfil a minimum occupation period of five years. This means that speculation would be minimal to begin with.
Knight Frank chairman Tan Tiong Cheng said it is possible that other EC developers will follow suit to offer DPS, now that they are aware of the option.
MCC Land is currently exploring the viability of offering both DPS and NPS for The Canopy. It has sold 190 out of 406 units at an average price of around $590 psf.
United Engineers is also working towards offering DPS for its upcoming EC project, Austville Residences. It could launch the site this month or next.
Response to ECs has been warm this year. Frasers Centrepoint has sold 508 out of 573 units at Esparina Residences, at an average price of $740 psf.
DMG & Partners analyst Brandon Lee expects to see good take-up for Prive as it is just a few minutes' walk from Punggol MRT station.