Recent low winning bids on land parcels may not be enough to lower executive condominium (EC) prices, at least not in the near future.
Most of the ECs which are being built or are nearing their TOP (temporary occupation permit) status are situated on land which were purchase by developers at high prices. Combined with rising construction costs and declining private home prices, prices of ECs may also face pressure. Property experts are expecting a similar 5 to 8 per cent fall in EC prices this year, similar to the prediction for HDB resale market and also the private property market.
As the price gap between ECs and private properties narrow, buyers may be swayed to the latter which allows them to immediately sell or rent. ECs, being a hybrid of public and private property, are still subjected to public housing rules which includes a minimum occupation period of 5 years before being allowed to sell. After 10 years, executive condominiums do become private properties.
In addition, developers who have secured land at lower prices may still wish to peg their units to current market levels instead of lowering it at first instance. This gives them the allowance of offering discounts later on.
Buyers who have been holding out for much lower prices may have a long wait.