By Uma Shankari

THE median resale prices of executive condominiums (ECs) have increased 63 per cent in the past two years, riding on the bull run in the private residential market, a report says.

Caveats lodged for ECs in the resale market in October 2009 showed prices at $519 per sq ft (psf), says CB Richard Ellis (CBRE). This is 63 per cent higher than at the bottom of the market in Q3 2006, when resale ECs were sold at $319 psf.

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CBRE's analysis of caveats lodged between 2004 and early 2007 shows median EC prices in the resale market fluctuated within the $300-400 psf band, bottoming out at $319 psf in Q3 2006.

ECs are a hybrid of private and public housing. They are similar to private condominiums in terms of facilities and amenities, but eligibility requirements are almost similar to those for new HDB flats.

The EC was first introduced in 1996 when the property bull run caused new private condo prices to soar to above $600 psf.

The last EC launched was La Casa in May 2005. It was completed in early 2008. Since then no new EC projects have been launched. Since the second half of 2007, when the private residential market was peaking again, the government has placed up to four EC sites on the reserve list, but there have been no takers.

But in the recently announced government land sales programme for the first half of 2010, the government placed two EC sites on the confirmed list and three others on the reserve list, which is 'a clear signal that the government wants to provide the EC as an alternative housing choice for homebuyers from next year', says CBRE.

Currently, a 14 per cent price gap exists between the median prices of ECs and mass-market non-landed projects in the resale market, CBRE says.

'Our analysis shows that buyers who bought new ECs at various periods from 1996 when EC prices hovered at around $400 psf should benefit from the price appreciation in the past two years,' said Li Hiaw Ho, executive director of CBRE Research. 'The residential market run-up of 2007 lifted new EC prices to above the $500 psf mark.'

Going forward, CBRE says that if the price gap between the next new EC project and a new private non-landed leasehold project in the same location is attractive enough, buyer demand for EC developments will surely return. The firms expects the tender bids for the two EC sites to be offered in January 2010 on the confirmed list - Buangkok Drive/ Compassvale Bow and Yishun Avenue 11 - will be a function of developers' confidence in the EC market and their pricing strategy.

This article was first published in The Business Times.