There's too much supply in the market, experts say.
Potential homebuyers in Singapore are steering clear of Executive Condominiums, a hybrid public-private housing type that were once extremely popular among middle-income families.
This chart from DBS Vickers shows that there is a steadily rising number of unsold ECs in the market. As of the third quarter of 2015, there were a total of 3,435 unsold ECs under construction, indicating some sort of oversupply situation as buyers are spoilt for choice in terms of units to buy. These units are mainly located at projects in the Eastern and Northern part of Singapore, DBS said.
“The slower than expected take-up in new EC launches could mean that buyers are maintaining a wait-and-see attitude before committing to a new property purchase,” said the report.
Although recent income cap tweaks mean that there will be a larger pool of eligible EC buyers, DBS cautioned that sales are likely to remain stuck in the doldrums due to the looming EC supply glut.
“Moreover, with close to over 1,100 units expected to be launched in the coming year, we expect further competition and price pressure from existing EC projects as developers can ill afford to price themselves out of the market,” DBS said.
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