Higher income ceiling fails to revive dismal EC sales in August

It will take time for new policies to take effect.

More households are now eligible to purchase Executive Condominiums after policymakers lifted the EC income ceiling last month. However, the new policies failed to boost EC sales last month, as buyers continued to absorb the massive stock of ECs still in the market.

A total of 466 ECs were sold in August, relatively flat compared to 495 units in July. Sol Acres, an EC project in Choa Chu Kang, was the bestseller after launching 707 units and selling 259 homes.

“The market did not see a pick-up in EC sales in August following the rise in the income ceiling, probably because buyers still need to take into consideration larger factors including developer track record, finishings, location, the Mortgage Servicing Ratio factor, as well as the nearly 5,000 unsold EC units currently in the market,” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia

Sol Acre’s success could point to a pick-up in market sentiment for ECs, according to Ong Teck Hui, National Director, Research & Consultancy at JLL. However, the market is not as buoyant as before and buyers are more price sensitive.

“The sales take-up for the recently launched ECs are gradual rather than robust, so it remains to be seen whether more buyers will come forward with the raising of the income ceiling,” Ong said.

Although EC sales remain weak, CBRE’s Sim expects full-year EC sales to increase by 5-10%.

“[The increase is] a function of the higher number of EC launches this year and the larger pool of qualifying buyers as a result of the rise in the EC income ceiling,” said Sim.