By Nikki De Guzman:
National Development Minister Khaw Boon Wan said there is "something wrong somewhere" with the executive condominium (EC) scheme due to "a sense of inequity", and it cannot carry on in its current form.
At a recent dialogue on housing, Mr Khaw highlighted the significant gap in subsidies that EC buyers get compared to subsidies for those purchasing public housing, as well as the profit EC owners can make from reselling their units.
"There is a sense of inequity here. The lower-income groups are getting less subsidies than somebody who is earning S$12,000," he said, adding that this goes against the principle that HDB's subsidies should be progressive, and that the lower-income should get more. "We cannot carry on the ECs with these current rules."
Moreover, sales of some super-sized ECs made headlines between December 2012 and January 2013, including one which surpassed the S$2 million mark. This prompted the government to limit their maximum size to 160 sq m, while several MPs urged the scrapping of the scheme.
However, Mr Khaw defended the scheme, saying it "protects middle-income Singaporeans from competition" and ensures a market-friendly way of allowing them to buy condominiums at affordable prices.
Notably, first-time buyers of Build-to-Order (BTO) flats and ECs get grants from the HDB to offset the price of their units. The latter is also marketed and built by private developers rather than the housing board and its income ceiling is S$12,000 compared to S$10,000 for BTO flats. After 10 years, they become private property and can be sold to foreigners.
Meanwhile, Mr Khaw said his Ministry will remain vigilant to any abuse of the scheme, promising to address the issue should it persist.
Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email firstname.lastname@example.org
CEA "aware" of under-the-radar property sales
New rules to reduce flooding
RCs to undergo major image change