SINGAPORE - The four property-cooling measures rolled out last Friday that target executive condominiums (ECs) should be effective in returning ECs to their original purpose of helping middle-income Singaporeans afford their own homes.
Still, the Government will continue to be vigilant and is prepared to find other ways of fixing the problem if abuse in the EC market continues.
This was the assurance given by National Development Minister Khaw Boon Wan in Parliament yesterday, as he fielded questions on ECs from at least five Members of Parliament.
ECs have come under the spotlight as developers increasingly built supersized units, which were cited as a reason for prices of such subsidised homes - meant for couples with a combined monthly income of not more than $12,000 - skyrocketing.
For example, a 2,845 sq ft penthouse unit at Heron Bay, in Upper Serangoon, fetched $1.77 million in October. And last month, a 4,349 sq ft presidential penthouse at CityLife@Tampines was sold for a record $2.05 million.
To rein in the hot EC market, the Government introduced the new curbs last week.
These measures include a size cap of 160 sq m for each EC unit, which is expected to limit the price increase of such units.
Developers will also have to pay development charges for private enclosed spaces and roof terraces now, which are now counted as part of the gross floor area.
Third, they will be allowed to launch units for sale only 15 months from the date of award of a land site or after physical completion of the foundation works, whichever is earlier.
Mr Khaw said: "This should help moderate EC land bids, as bidders will now have to take a longer-term view of the property market and can no longer pass on such market risks to EC buyers soon after securing the land."
Finally, sales of new dual-key EC units will now be restricted to multi-generational families.
Previously, when such units were open to the entire market for purchase, some people bought them not for multi-generational use, but capitalised on the more relaxed regulations governing these units in order to gain immediate rental yield, Mr Khaw explained.
In Parliament yesterday, he also defended the EC scheme, saying that it is still a "relevant" and "market friendly" way of allowing the middle class to buy condominiums at affordable prices.
He likened the scheme to offering buyers an upmarket Lexus car at the much lower price of a Toyota Corolla.
"But only Singaporeans have this privilege of doing so and they know that, in due course, prices will go up, and to above the level of a Lexus. So, I think it's a very good scheme and we should ensure its continuity," he said.
Asked by Jurong GRC MP David Ong why the developers were given approval to market such expensive ECs in the first place, Mr Khaw acknowledged that there had been a loophole in the rules.
"The earlier plans were approved because those were the planning rules at that point in time," he said.
"But as soon as we realised that the planning rules were being taken advantage of, we fixed them. And now, I think this should be history."