The 534-unit Wandervale project in Choa Chu Kang, the first executive condominium (EC) to launch in 2016, has beaten market expectations after its developer managed to sell 50 percent of the units last weekend.
“Despite tepid market conditions, it was well received by the market,” said Wong Xian Yang, Senior Manager for Research and Consultancy at OrangeTee.
The good performance is unsurprising, given the lower prices of Wandevale’s units. Prices for a three-bedroom apartment start from $655,000. Based on the percentage of units sold in the first month of sales, Wong noted that it has outperformed all the seven EC launches in 2015.
However, only about 267 units were successfully transacted even though the project was more than 40 percent oversubscribed, receiving a total of 750 e-applications by the end of the application period on 28 February.
But Wong said that “a conversion rate of approximately 30 percent to 40 percent from e-applications to sales is common in the EC segment”.
He added that there could be several reasons for why more sales didn’t materialise, such as buyers changing their minds, their inability to secure an 80 percent loan-to-value (LTV) ratio, and insufficient CPF funds to cover the next 15 percent of progressive payments.
Developed by Sim Lian Group, Wandervale comprises 130 three-bedroom, 322 three-bedroom premium and 82 four-bedroom units, spread across nine residential blocks. Unit sizes range from 958 sq ft to 1,249 sq ft, while prices average between $750 psf and $770 psf.
The 99-year leasehold EC is expected to be completed by 2019.
As to whether Choa Chu Kang will see an oversupply of EC units with three properties being developed there, namely MCL Land’s Sol Acres, Wandervale and the future launch of Qingjian Realty’s EC at Choa Chu Kang Avenue 5, Wong noted that these projects will inject a total of 2,350 units in the area.
“Sol Acres sold 259 units during the first month of launch in August 2015, and at least 10 units have been sold each month since. Likewise, we expect a steady flow of sales (for Wandervale) in the coming months.
“The introduction of another EC project by Qingjian may dilute demand, but we believe that the market should be able to absorb the additional supply, assuming that it is priced right.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email email@example.com