Government ready to supply land for 5,000 ECs in 2012

by Venus Hew, TODAY, 28 Dec 2011

More land will be released for the development of Executive Condominiums (ECs) to meet the housing aspirations of higher-income Singaporeans.

The Government is prepared to supply land sites for 5,000 EC units next year, Minister of State for National Development and Manpower Tan Chuan-Jin said yesterday at the 52nd anniversary of the Real Estate Developers Association of Singapore (REDAS).

The announcement comes after the Government in August raised the monthly income ceiling for the purchase of new ECs to S$12,000 from S$10,000. Mr Tan said that the higher ceiling had benefited around 220 households who booked their ECs after August.

ECs, a hybrid of public and private housing, were introduced in 1995. Since their introduction, 14,600 EC units have been launched by developers and 3,000 units are coming on-stream.

Still, Mr Tan pointed out that the majority of Singaporeans would continue to live in public housing.

He said that while the Government remained committed to helping first-time owners and newly-weds buy their own homes, it would pay more attention to helping HDB second-timers next year.

Amid uncertainty in the external economic environment with more subdued growth prospects globally, Mr Tan called on Singaporeans to be prudent when purchasing a new home and to "buy within your means".

He warned: "The current low interest rates have enhanced the affordability of housing. But such low rates are not the 'new normal' and will eventually rise. Buyers need to do their sums and be careful not to over-commit themselves in their borrowing for property purchases."

As property prices continued to climb to record highs, the Government has introduced four rounds of measures since 2009 to cool the market, including the latest this month that imposed additional buyers' stamp duties (ABSD) of 10 per cent for foreigners and non-individuals.

Permanent residents who own one and are buying a second and subsequent residential property and Singaporeans who own two and are buying the third and subsequent one would have to pay an ABSD of 3 per cent.

REDAS president Wong Heang Fine said yesterday developers would be hit by a double whammy as a result of the latest cooling measures: First, the ABSD may lead to a higher cost structure for developers due to the higher cost of acquiring land and, second, there may be knock-on effects on mortgages and a decline in property values.

"Developers are naturally concerned when they are also required to pay ABSD with interest if they fail to complete selling all the units in a residential project within five years of land acquisition. These measures are indeed a double whammy for developers," said Mr Wong.

Mr Tan said he did not expect developers to welcome the measures even as he pointed out that many people would agree that "it is in our common interest to have a sustainable and stable property market".

Singapore's property market is likely to attract investments because of the volatile equity markets and uncertainty in Europe, he said. He added that the latest cooling measures introduced by the Government were intended to moderate such investment and avoid a major correction in the future.