Why does HDB continue to allow Executive Condominiums (ECs) to be built?
Executive Condominiums are not HDB flats. They are sold with certain restrictions so that they are available at affordable prices within the reach of middle-income Singapore families who have aspirations of owning private housing, as ECs become private property after 10 years.
Prospective EC buyers are subject to initial eligibility and ownership restrictions, which are similar to those imposed on buyers of subsidised HDB flats. For instance, only a Singapore citizen family nucleus is entitled to purchase an EC, and buyers have to meet a five-year minimum occupation period before they are allowed to sell or rent out the EC.
Recent news reports have highlighted a penthouse unit at Heron Bay EC and the presidential unit at CityLife@Tampines, which were sold at $1.77 million and $2.05 million respectively. The prices and sizes of these exceptional units elicited responses from many, who cast doubts on the affordability of EC units, as well as the types of units being offered in recent EC projects.
To address such excesses, the Ministry of National Development recently introduced new measures, so that the EC scheme can continue to remain relevant to Singaporean families. These include:
a) The maximum strata floor area of new EC units will be capped at 160 square metres.
b) Sales of new dual-key EC units will be restricted to multi-generational families only.
c) Private enclosed spaces and private roof terraces will be treated as gross floor area (GFA). The GFA of such spaces in non-landed residential developments, including ECs, will be counted as part of the ‘bonus’ GFA of a residential development and subject to payment of charges. This is in line with the treatment of balconies under URA’s current guidelines. Details of this measure are on URA's website.
d) Developers of future EC sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.
These measures should help to ensure that ECs remain a viable option for middle-class Singaporean households. For its part, HDB is committed to providing sufficient new flat supply in 2013 to meet demand. HDB will launch 25,000 flats, instead of 20,000 as originally planned, across various housing estates in Singapore. The projected supply, along with planned EC launches, will offer prospective flat buyers more choices across a range of different budgets.