Estimating The Price of Executive Condo
The price of executive condo in Singapore is determined by two main factors, the land cost for which developers bid for, as well as the developers cost (and profit margin). As a potential buyer of an executive condominium, it is certainly useful to know how the price is derived. With this knowledge, one can give a good estimate on future executive condominiums that will be launched based on the easily accessible market information.
To illustrate this simply, we take a case of a land site in Punggol (a popular area for executive condominiums) slated for executive condominium housing. Developers will bid for the land in a land tender, and this bid which they submit is known as the developer’s land cost. Almost certainly, the land tender will be awarded to the developer who submits the highest bid. In this instance, developer XYZ may have won the land tender bid with a bid of $300 PSF PPR (per square foot per plot ratio). (If you are interested in the land tender bid, we have summarised some information in our list of executive condominiums where you can find the latest land cost PSF PPR.)
The other cost attributed is known as the developer’s cost. This includes the labour and material cost to build the development. Beyond this, the developer also incurs marketing cost and lastly, the profit margin of the developer. This is summarised below:
- Cost 1: Land cost = $300
- Cost 2: Developer cost of building = $250-$350
- proft margin = 20%-30%
- Selling price = $700-$850 psf ppr.
Being a form of subsidised housing, the price of EC in Singapore will be lower than private condominiums in the surrounding area. This is because the government subsidises the cost of the land sale to ensure the selling price of the executive condominium will be affordable. As a general yardstick, executive condominiums are priced about 20% lower than the prices of comparable, private condominiums launched at the same time in surrounding areas.
For example, if there is a private condominium launched at $1100psf, an executive condo launched at the same time in the same area may be selling from $750-$850psf. However, do note that is just a general guide and there are many other factors that affect the price of executive condo.
As of 2013, the prices of ECs in Singapore have been slowly creeping up. While previously executive condos were sold at $700-$800psf (2011, 2012 etc), since the middle of 2013, the average selling per square foot price by developers has reached $800 and is set to be higher in the range of $800-$900 based on the new land price paid by developers. This translates to a estimate price of around $650,000-$750,000 for a 2 bedroom unit and in excess of $800,000 for a 3 bedder in future.