National Development Minister Khaw Boon Wan was in the hot seat in Parliament Monday as he faced a barrage of questions over the effectiveness of a scheme to provide affordable housing to higher-income Singaporean households.
At least four Members of Parliament called for the Executive Condominium (EC) scheme to be reviewed following reports that property developers are selling oversized and overpriced units, and that owners are making a killing renting out their units.
MPs also questioned why some developers’ plans to build huge units going for $1.2 million apiece had been approved in the first place as that led to buyers with limited finances being priced-out of the scheme.
Comparable in design and facilities to private condominiums, EC units are meant for Singaporeans who can afford more than an HDB flat but find private property out of their reach.
In response to why the oversized units were approved by planning authorities, Khaw said that “those were the planning rules of that time, but they have been fixed”.
He went on to defend the EC scheme, saying that four new measures announced two days ago would stop abuse and curb the problem.
‘Wonderful’ scheme
Likening EC units to cars, Khaw said that the scheme has given Singaporeans a chance to buy a luxury “Lexus” at (Toyota) “Corolla” prices.
“The rules have been fixed. We will be vigilant and if the abuse continues, we will think of other ways,” he said. “The selling price of the EC is linked to the size of the EC. If you cap the size of the EC, the prices will be more sober.”
News of the EC scheme being abused by developers came to light with the sale of larger-than-usual, million-dollar EC units in Yishun. It was then discovered that private developers were taking advantage of land cost savings and loopholes in housing planning rules to build super-sized and super-priced ECs.
In addition, dual-key units, first introduced to encourage multi-generation families to live together, were being immediately rented out by unscrupulous owners instead.
‘Four-pronged solution’
With the new measures, EC units will now be capped at a size of 160 sq m. Private enclosed spaces and roof terraces will also be included in the gross floor area and subject to development charges.
The new rules also seek to put a stop to rogue developers by only sales launches 15 months from the date the land sites are awarded, or after physical completion of foundation works. This aims to stop developers from passing on market risks to buyers after securing land at highly subsidised prices of up to 40 per cent less.
Finally, dual-key EC units will only be sold to buyers with multi-generational families.
Who benefits?
However, Bishan-Toa Payoh GRC MP Hri Kumar pointed out there was still an inherent problem with the scheme since buyers were still snapping up the Yishun EC units despite their million-dollar price tags.
“Those (buyers) purchasing the EC units can afford private property at those prices,” said Kumar, questioning if the eligibility criteria has been stringent enough in making sure that it is truly the “sandwiched” class which are benefitting from the EC scheme.
MP for Nee Soon GRC Dr Lee Bee Wah also suggested that the dual-key unit concept be introduced under Build-To-Order (BTO) schemes as well.
“I think there is demand for multi-generational BTO flats – many of my residents have appealed to me about it,” said Dr Lee, who said that her residents could not afford EC units but hoped to stay with their elders.
At least four Members of Parliament called for the Executive Condominium (EC) scheme to be reviewed following reports that property developers are selling oversized and overpriced units, and that owners are making a killing renting out their units.
MPs also questioned why some developers’ plans to build huge units going for $1.2 million apiece had been approved in the first place as that led to buyers with limited finances being priced-out of the scheme.
Comparable in design and facilities to private condominiums, EC units are meant for Singaporeans who can afford more than an HDB flat but find private property out of their reach.
In response to why the oversized units were approved by planning authorities, Khaw said that “those were the planning rules of that time, but they have been fixed”.
He went on to defend the EC scheme, saying that four new measures announced two days ago would stop abuse and curb the problem.
‘Wonderful’ scheme
Likening EC units to cars, Khaw said that the scheme has given Singaporeans a chance to buy a luxury “Lexus” at (Toyota) “Corolla” prices.
“The rules have been fixed. We will be vigilant and if the abuse continues, we will think of other ways,” he said. “The selling price of the EC is linked to the size of the EC. If you cap the size of the EC, the prices will be more sober.”
News of the EC scheme being abused by developers came to light with the sale of larger-than-usual, million-dollar EC units in Yishun. It was then discovered that private developers were taking advantage of land cost savings and loopholes in housing planning rules to build super-sized and super-priced ECs.
In addition, dual-key units, first introduced to encourage multi-generation families to live together, were being immediately rented out by unscrupulous owners instead.
‘Four-pronged solution’
With the new measures, EC units will now be capped at a size of 160 sq m. Private enclosed spaces and roof terraces will also be included in the gross floor area and subject to development charges.
The new rules also seek to put a stop to rogue developers by only sales launches 15 months from the date the land sites are awarded, or after physical completion of foundation works. This aims to stop developers from passing on market risks to buyers after securing land at highly subsidised prices of up to 40 per cent less.
Finally, dual-key EC units will only be sold to buyers with multi-generational families.
Who benefits?
However, Bishan-Toa Payoh GRC MP Hri Kumar pointed out there was still an inherent problem with the scheme since buyers were still snapping up the Yishun EC units despite their million-dollar price tags.
“Those (buyers) purchasing the EC units can afford private property at those prices,” said Kumar, questioning if the eligibility criteria has been stringent enough in making sure that it is truly the “sandwiched” class which are benefitting from the EC scheme.
MP for Nee Soon GRC Dr Lee Bee Wah also suggested that the dual-key unit concept be introduced under Build-To-Order (BTO) schemes as well.
“I think there is demand for multi-generational BTO flats – many of my residents have appealed to me about it,” said Dr Lee, who said that her residents could not afford EC units but hoped to stay with their elders.
