What’s happening in EC Market?
It was not too long ago that the EC developers faced a growing supply of unsold units. The oversupply in the EC market worsened from Jan 2015 to Apr 2016 with the launch of 10 new EC projects comprising a total of 5,544 units, unsold EC units peaked at the all-time record high by Apr 2016.
Ever since, the government had been attempting to alleviate the oversupply issue in the EC market by reducing sites available for sale. While the supply has been steadily declining in recent years, demand has increased gradually. EC developers sold 1,578 EC units in 2014. Their sales of EC increase to 2,550 and 3,999 units in 2015 and 2016 respectively.
This year the one-day sell out at Hundred Palms EC clearly showed the tide had turned for EC market. With the general sentiments in the residential market improved, developer moved 3,596 EC units between Jan to Sep – up 10.1% year on year. By 15 Oct, there were only 603 units available in the market. At the current rate of sales, all the inventory would be exhausted by the end of this year.
Looking at the pipeline, there is only one EC project expected to be launched next year in Anchorvale Lane. In addition, the government is going to sell only one EC land parcel by Dec 2017, which is located in Punggol. Based on 15-month launch rule, the new EC project from this site would only be available for sale after Q1 2019. As a result, there would be a looming shortage of new EC supply from early 2018 to 1H 2019. Strong interest and aggressive bids are expected from developers for the upcoming EC lands, which could further drive home buyer’s demand for the remaining EC units.
Likening EC to Cars, Mr Khaw Boon Wan -Minister for Transport, once said, ‘EC scheme has given Singaporeans a chance to buy a luxury ‘Lexus’ at ‘Corolla’ Prices. As EC tends to be priced 20-30% lower than a comparable private condo, buyers who are looking for more economical options should actively search and grab your share before Christmas comes.