Reico Wong
My Paper
Wednesday, Jan 16, 2013
CONDOMINIUM developers in Singapore have been in the spotlight lately.
They've been trying to outshine their competitors by launching offerings with more posh and exotic facilities, attracting buyers to their developments like bees to honey.
But, while unique facilities certainly add the wow factor to projects, buyers often forget that this means they would have to fork out higher-than-usual maintenance fees each month - even if they don't utilise them.
Each unit in most mass-market private condominiums is charged around $200 to $350 each month for maintenance. For luxury-end condominiums, such fees can even go above $1,000.
Property analysts said that maintenance fees for condominiums have been increasing over the last few years and the trend is expected to continue. This is not only due to facilities of better quality, but also due to additional material and manpower costs.
However, My Paper found that one newly-built condominiums is bucking this trend.
Maintenance fees at the Alexis in Alexandra Road, which comes with many facilities, are as low as $59 each month, excluding carpark fees - quite possibly the lowest for a private residential development here.
Developer EC Prime said that seasonal parking, at an additional $85 per parking space, is optional, as the development is a stone's throw away from Queenstown MRT station.
At such a low rate, this private condominium's maintenance fees is highly competitive, even compared to what HDB dwellers pay.
Analysts estimate that those living in a relatively-new four-room HDB flat, for example, pay between $50 and $55 per month in conservancy charges, not including carpark charges.
A freehold development with 293 units, the Alexis was launched in February 2009 and gained its temporary-occupation permit (TOP) around the middle of last year.
Common facilities there, while by no means exotic, are pretty decent. They include a gymnasium, a steam room, barbecue areas, heated spa pods, a hydro-jet pool, a sky deck and a 75m-long sky pool.Most of the units in the development are shoebox apartments. According to EC Prime, the lowest maintenance fees of $58.75 at the Alexis is for a one-bedroom unit of about 452 sq ft.
Its highest maintenance fees of $82.25, meanwhile, is for its penthouses, with a size of about 1,195 sq ft.
These rates are guaranteed for at least the first year of the development's TOP, after which the residents' appointed management committee will decide on whether the rates should be changed.
Even then, EC Prime director Melvin Poh said that he does not expect the maintenance rates of the development to go up drastically.
"Typically, we have been very accurate with the projection of the maintenance fees for our projects," he said.
"We're able to charge such rates as there is a large number of units to share the maintenance cost, and the grounds of the development are not large and thus require little maintenance. Also...most of the maintenance works are done in-house."
Analysts My Paper spoke to were surprised at how low the maintenance rates at the Alexis are, even after taking into account that they are guaranteed only in the first year.
Mr Alan Cheong, senior director of research at Savills in Singapore, observed that if an average of $75 maintenance fees per unit per month is assumed, the monthly collection works out to only $21,975.
But he said that given that the development is brand new with a small, compact compound, this is not impossible, if budgeting was done "water tight".
Mechanical and electrical equipment in the development are unlikely to break down, given their newness, while defective fittings will still be under a liability period, he observed.
Additionally, residents access their units via secured cards, which means less security personnel than that at regular condominiums is required.
"What this has shown is that developers of standard condominiums may want to consider an alternative marketing concept," said Mr Cheong.
"It is in vogue to offer unique facilities for new launches, but would it also be possible to offer 'smart' minimalist features and sell (such developments) well?"
Other analysts, however, were more sceptical about the low maintenance rates.
Mr Lee Sze Teck, senior manger of research and consultancy at Dennis Wee Group, said: "The key pitfall is that owners will have to cough up a...lump sum when it is time to carry out re-painting and replacement works, as there is little contribution to the sinking fund.
"For those who buy the units just for investment and cash out in time, they will not be affected. But buyers who hold the units will have to be prepared to pay."
