The stricter buying rules that have hit executive condominium sales could also end up hurting upcoming launches, property consultants say.
There were 779 launched but unsold exec condo units as at May 31 – the highest level for three years.
National Development Minister Khaw Boon Wan told Parliament earlier this week that about 6,800 exec condo units are expected to be launched over the next 18 months.
Exec condos, a hybrid of public and private housing, are designed to cater to a “sandwiched class” of buyers who might not qualify for public housing but find private property beyond their reach.
They are sold with Housing Board restrictions but built by private developers, and become fully privatised after 10 years.
Consultants said yesterday that the slowdown in the sales of exec condos was likely due more to reduced affordability than buyer fatigue among HDB upgraders.
“There’s still underlying demand… Exec condos are really one of the better solutions to do an upgrade,” said CBRE Singapore research head Desmond Sim.
Consultants said the affordability of exec condos had been reduced due to a resale levy and tighter loan rules imposed on the sector late last year.
Exec condo buyers who have already bought an HDB flat or exec condo unit must pay a resale levy of S$15,000 to S$55,000, depending on what their first subsidised home was.
Monthly mortgage payments for exec condo loans were capped last December at 30 per cent of a borrower’s monthly pay.
“The measures caused a pullback in demand. New supply will take longer to be absorbed,” Mr Sim said.
SLP International research head Nicholas Mak estimated that the 30 per cent cap on the mortgage servicing ratio (MSR) means that a couple with S$12,000 in combined monthly income can afford only an exec condo unit which costs about S$900,000, assuming they take out an 80 per cent loan over 25 years at a 3.5 per cent interest rate.
The prices of popular four- and five-room exec condo units now start at around S$1 million, he said.
The drop in demand for exec condos could mean sales at upcoming launches may take a hit.
But Mr Mak said some potential buyers may have held off at last year’s exec condo launches because they wanted to wait for the upcoming surge of units.
No exec condos have been launched this year due to a restriction imposed on the sector in January last year. That rule requires developers to wait at least 15 months after getting an exec condo site before they can launch the project for sale.
The next few exec condo developments to hit the market after this 15-month period could include one in Woodlands and one in Sengkang, both by Qingjian Realty.
A Straits Times check found that there were seven exec condo projects on the market with unsold units, which together accounted for the 779 unsold units as at the end of May.
The Waterwoods exec condo in Punggol East had 170 unsold units at the end of May, which was 45.6 per cent of the 373 units in the project – the highest percentage of the seven exec condos.
The project at Punggol Field Walk, which is being developed by Sing Holdings and UE E&C, is the first exec condo to have private lift lobbies and maisonettes. It went on sale last November.
The second-highest percentage of unsold units was at the Skypark Residences exec condo in Sembawang Crescent, which also began sales in November last year.
There were 205 unsold units as at the end of May – 40.5 per cent of the 506 units in the project. That was also the biggest absolute number of unsold units across the seven exec condo projects.
The five other exec condo projects with unsold units were Forestville and Twin Fountains in Woodlands, Sea Horizon in Pasir Ris, Ecopolitan in Punggol and The Tampines Trilliant in Tampines Central.