EC scheme has helped citizens 'fulfil dreams of private housing'

80% of buyers earned under $10,000, scheme to stay on track, says Khaw
By Melissa Tan, The Straits Times, 25 Apr 2014

THE executive condominium (EC) scheme has helped Singaporeans from diverse backgrounds get into the private housing market, National Development Minister Khaw Boon Wan said yesterday.

ECs are a hybrid of public and private housing designed to cater to a "sandwiched class" of buyers who might not qualify for public housing but find private property beyond their reach.

Post by Khaw Boon Wan.

Giving more details on the profile of these buyers in a blog post, Mr Khaw pointed out that 80 per cent of EC buyers earned under $10,000 a month.

Also, 83 per cent spent under $1 million on their unit, he said. The figures were based on the more than 11,000 Singaporean families who bought an EC from October 2010 to last December.

"I am glad that the EC scheme is helping Singaporeans from diverse backgrounds meet their aspirations for private housing," Mr Khaw wrote on his blog.

He noted that the EC scheme, which is meant to help Singaporeans own a private condo at below market price, has seen a high take-up. First-timers in many cases enjoy a price advantage of about 30 per cent, he added.

However, consultants warned yesterday that although the total prices of EC units may stay affordable, developers may feel pressure to build them smaller.

"As long as the Government maintains the income ceiling, most buyers can probably afford a unit that's just shy of $1 million," said SLP International research head Nicholas Mak. EC developers may reduce unit sizes by as much as 10 per cent to keep the total prices affordable, he said.

GPS Alliance chief Jeffrey Hong noted that developers likely cannot lower their per sq ft (psf) prices by much, given relatively high land and construction costs.

The household monthly income ceiling for EC buyers was raised from $10,000 to $12,000 in 2011. In the 12 months after that shift, the proportion of second-time buyers rose from 43 per cent to 57 per cent, Mr Khaw said.

The proportion of buyers aged between 35 and 44 also grew from 35 per cent to 43 per cent.

Of the more than 11,000 families, 86 per cent were Housing Board dwellers and 55 per cent were second-time home buyers, he said. Also, 42 per cent were not university graduates.

He added that he would "continue to make sure the EC scheme stays on track, to serve the housing needs of Singaporeans".

A year ago, Mr Khaw had hinted at an Our Singapore Conversation dialogue session that the EC scheme could be changed. He had said last April that EC owners make more profit upon resale than the average flat owner, citing the buoyant property market at that time. The private property market has since weakened after home loan curbs last June.