Sunday, 25 November 2012

Khaw to developers: Don't forget intent of ECs

By Esther Teo, The Straits Times, 24 Nov 2012

DEVELOPERS have been warned not to forget the fundamental premise of an executive condominium (EC) even as they fall over themselves to offer luxurious finishings to attract buyers.

In a blog post yesterday, Mr Khaw reminded developers that land prices for ECs are lower than prices of private condo land. This is done through the zoning and tendering out of the land earmarked for EC projects.

Mr Khaw's post came on the back of reports about a string of ECs sold at sky-high prices. A 2,845 sq ft penthouse at Heron Bay in Upper Serangoon Road, for instance, was sold for $1.77 million last month. And the upcoming CityLife @ Tampines will offer a 4,349 sq ft "presidential penthouse suite" that is likely to cost more than $2 million.

"I expect the developer to have done his calculations, to ensure that the unit will be affordable for the targeted EC applicants," Mr Khaw said.

While EC developers have flexibility in designing and pricing their units, they "must be mindful that flexibility must be exercised in keeping with the intent and spirit of the EC policy", he warned.

Industry players say there has been growing demand for larger units in general. Instead of a 4,000 sq ft unit for one family, PropNex chief executive Mohamed Ismail said the space could be used to house two to three families in typical-sized units.

"The penthouse unit could be a marketing tool to sell the pre-mium lifestyle of the EC and to grab attention but it does not benefit the majority," he added.

"If developers don't take into account the intended objectives, the authorities might even come up with certain guidelines."

Mr Zak Hashim, 48, who runs a consultancy business, is looking for a penthouse unit at an EC with four or five rooms. He lives in an executive HDB flat in Hougang with his wife, three children and a maid. "We are looking for a larger penthouse unit so each of our kids can get a room each. We can't afford landed so a large EC unit is more affordable. After we sell our flat, together with our CPF savings, the loan we will take will probably be less than $500,000 and so it's affordable," he said.

EC applicants must meet the household income criterion of no more than $12,000 a month and must not have bought two subsidised flats before.


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