SINGAPORE - Prices of resale executive condominiums (ECs) are catching up with those of private mass market homes as the increasingly luxe features at recent ECs have boosted the profile of these homes.
The price gap between resale ECs and comparable mass market homes has narrowed to just 17.2 per cent this year, data from the Singapore Real Estate Exchange (SRX) found.
This is a sharp fall from the previous market peak of 32.2 per cent in 2007. SRX added that the price gap has been narrowing and stabilising since then. Last year, the gap was 17.4 per cent while it was 14.5 per cent in 2010.
ECs combine elements of private and public housing and often have premium furnishings and condo-like facilities.
Experts said they are becoming more popular now as many home buyers see them as value buys, particularly those that offer innovative and high-end features.
Units at new EC launches are also typically 20 per cent to 25 per cent cheaper than new mass market homes owing to Housing Board rules applying to ECs such as a household monthly income cap of $12,000.
Knight Frank research head Png Poh Soon added: "As buyers' perceptions of ECs and private homes are blurred, when ECs reach that fifth and 10th year, the price gap could narrow even further provided that the quality of EC finishings and features is equivalent to (that of) private homes."
PropNex chief executive Mohamed Ismail expects the gap to be "marginal and as little as 5 per cent" as more and more EC projects, especially the recently launched ones, approach their 10-year-old mark.
ECs are subject to a minimum occupation period of five years. They can then be sold only to Singaporeans and permanent residents. They become private property after 10 years and can then be sold to foreigners.
Recently, developers have also upped the ante at EC projects as they battle for buyers spoilt for choice owing to the flood of new home launches.
Penthouses and skysuites, for instance, have become more common at EC projects. Some even feature private jacuzzi pools.
However, the price gap varies among the six suburban districts that have at least two EC projects eligible for resale here, SRX noted. For instance, the gap in District 19 - comprising estates like Hougang, Punggol and Sengkang - is the highest at 22.4 per cent. Resale ECs in this area include The Florida and Park Green.
District 18, made up of Pasir Ris, Simei and Tampines, and District 20, including EC projects like Bishan Loft and Nuovo in Bishan and Ang Mo Kio, have the lowest price gap of just 10 per cent.
Experts said this is likely due to the string of new EC launches and sites being sold in the north-eastern estates that provide stiff competition to existing ones.
OrangeTee managing director Steven Tan said home buyers are willing to pay more for ECs in mature estates such as Bishan as there is a limited supply of resale and new EC projects there.
Estates with resale EC projects that are more than 10 years old are also likely to see narrower price gaps as these EC projects are fully privatised. "Some new buyers or foreigners might not even know that what they are buying are actually ECs," he added.
The price gap is also expected to narrow further as ECs cement their reputation as being on a par with private condos.
PropNex's Mr Mohamed noted that the new EC launches have been getting a lot of hype with lifestyle elements - such as concierge services and infinity pools - taking centre stage at some projects.
"There is also an increasing demand for ECs as home prices increase. The overall quantum for private homes might no longer fit the budget of a buyer and so he might turn to ECs instead as an alternative," he added. "And so as demand for ECs increases, the price gap narrows in turn."
Knight Frank's Mr Png noted that the many larger ECs units at recent launches are likely to see a smaller price gap after the fifth and tenth year of completion as their higher-end offerings could appeal more to buyers.
The SRX collates transactions by major property agencies, which account for more than 80 per cent of the market.