Julia Richt | Oct 24, 2012 | Comments 0
There is a growing trend of ECs being priced over over S$800 (US$654) per sq ft
Research from Savills Singapore real estate agent show that over 300 new Executive Condominiums (ECs) were sold for over S$1 million (US$817,327) per unit. Although the average price quantum in Q2 2012 was still S$822,000 (US$671,843), the average price of S$731 per sq ft in Q3 marks a historical high.
The new 958 sq ft EC at the Arc sold at S$941 (US$769) per sq ft in February hits another record high. This follows the trend of ECs being priced over S$800 (US$654) per sq ft with 215 units at that price range in the first three quarters of 2012, compared to the 19 in 2011 and 13 in 2010.
According to Savills, the rising prices of resale HDB flats has provided funds for many HDB upgraders to spend on more properties.
Savills reports that there is a “seemingly growing number of young, affluent buyers snagging bigger and more luxurious penthouses…” possibly due to low interest rates, and rising incomes. However according to Channel NewsAsia (CNA), there is a growing concern that EC buyers are reaching over their limits.
Based on the S$12,000 (US$9,808) income limit prerequisite for all EC buyers, a S$1.1 million (US$899,060) purchase is a risky reach once interest rates exceed three percent. The mortgage installments would hover around S$4,400 (US$3,596) and S$5,000 (US$4,087), possibly totaling in a cash top-up of between S$2,100 (US$1,716) and S$2,700 (US$2,207).
CNA states that ECs priced below S$1 million (US$817,327) would be a safe purchase especially with loan repayments, even if interest rates were to reach four percent.
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