Moves will return ECs to original intent

PHOTO: Moves will return ECs to original intent

SINGAPORE - The latest policy measures affecting executive condominiums (ECs) will reinforce the policy of making ECs an affordable option for middle- class buyers, Minister for National Development Khaw Boon Wan said on Friday.

These measures "ought to be able to help us return ECs back to their original intent and spirit", Mr Khaw said at a press conference where the seventh round of property curbs were announced.

ECs were introduced to cater to the so-called "sandwiched class" of buyers who might not qualify for public housing but find private property beyond their reach.

One change is that EC unit sizes are now capped at 160 sq m, or 1,722 sq ft, which he said would "bring the price down".

Recent EC launches have sparked controversy over whether the sale of super-large penthouses defeats the original purpose of having ECs as such huge units could cost over $2 million.

Another change announced was that private enclosed space and private roof terraces now count under the bonus gross floor area for balcony space.

DWG analyst Lee Sze Teck said this would increase the costs for developers and if the costs cannot be passed on to buyers, developers will put in lower bids for government land tenders and collective sale sites. This could cause EC launch prices to soften.

Developers of future EC sites have to launch them for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier. Mr Khaw said this would help moderate developers' bids for EC sites.

"When the developer has to think about what the market will look like a couple of years down the road, hopefully the bids will be more sober. When they have the opportunity to immediately pass on the market risk to buyers their computations sometimes go a little bit haywire."

He also added that ECs were the Government's way of helping Singaporeans get condos at a lower price. "When EC developers bid for EC land typically it is 30 per cent, sometimes even 40 per cent below a comparable plot of land if that were strictly for a private condo. That saving is then passed on to buyers of ECs who are Singaporeans," Mr Khaw said.

EC buyers have to live in the unit for the first five years. The units can then be sold to Singaporeans and permanent residents. After 10 years, they can be sold to foreigners, thus becoming fully private.