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Thread: Executive condo scheme divides participants

  1. #1
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    Default Executive condo scheme divides participants

    http://www.straitstimes.com/premium/...pants-20130510

    OUR SINGAPORE CONVERSATION

    Executive condo scheme divides participants

    Some want it scrapped but others defend it; income ceiling also debated

    Published on May 10, 2013

    By Charissa Yong


    THE future of executive condominiums (ECs) took centre stage at an Our Singapore Conversation (OSC) session on Wednesday.

    Around half of the 55 participants, who were mostly current or future Housing Board home owners, called for the scheme to be scrapped entirely. An equal number defended it.

    But Senior Parliamentary Secretary for National Development Mohamad Maliki Osman said any housing policy change will have to take into account the fact that many Singaporeans are already home owners.

    "We can't view property void of the reality of hundreds of thousands of Singaporeans owning their own homes," he said.

    "How we manage the property market will have an impact on current home owners too, and we should not forget that."

    ECs have been in the news recently after National Development Minister Khaw Boon Wan raised the issue that EC owners, who receive government subsidies, make a bigger profit in the resale market than the average flat owner.

    One participant at the session said this was unfair. Another added that ECs widened the rich-poor divide by "helping the rich get richer".

    The EC scheme, which was launched in 1996, targets home buyers who cannot afford private property.

    Households whose incomes are below $10,000 can buy a Build-To-Order (BTO) flat. For ECs, the income ceiling is $12,000.

    Property expert Chris Koh, a participant at Wednesday's session, said an unintended consequence of ECs had been to push private property prices upwards.

    "People started using ECs as benchmarks. So they would say, if an EC can sell at $800 psf, therefore my condo can sell at $1,000 psf," said Mr Koh, director of Chris International.

    He proposed keeping the EC scheme but removing the grant of up to $30,000 given to first-time buyers, or imposing levies on those upgrading from an HDB flat.

    An equal number of participants, several of them EC owners, defended the scheme as a way to meet the aspirations of the "sandwiched class".

    EC owner Chiang Poh Yin, 28, said not all buyers are out to make a quick buck.

    Her household income had been below $10,000 when she opted for an EC as the wait to move into one was shorter compared with that for a BTO flat, for which she applied five times but failed.

    Other participants thought ECs were a good step towards owning a private condo, for those upgrading from their first home.

    Participants were also evenly divided on the income ceiling that determines whether families are eligible to purchase HDB flats.

    While several wanted it raised so as to keep pace with rising wages, others wanted to remove it entirely to give more Singaporeans a chance to live in HDB flats.

    Dr Maliki said the dialogue showed people have diverse viewpoints over the housing policy: "We're dealing with a policy situation to house 80 per cent of Singaporeans with different aspirations that have evolved over time."

    The next OSC session is on May 23 and will be on affordable housing.

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    I just wonder, does EC buyers get more subsidies from govt or BTO buyers.
    Govt sell the lands to the developers and does the govt control the pricing of the developers as to how much %age that the developers can make? Anyway not all EC buyers get the grant right? So if the developers have marked up EC price slightly lower than the PC, will the EC buyers still getting big subsidies.

    ECs have been in the news recently after National Development Minister Khaw Boon Wan raised the issue that EC owners, who receive government subsidies, make a bigger profit in the resale market than the average flat owner.
    I thought later KBW clarify that there is a reporting error. It is not the big profit different in EC and HDB flats but is that why should govt subsidize those buyers who can afford the pc. I'll see whether I can retrieve the news or not.

    "People started using ECs as benchmarks. So they would say, if an EC can sell at $800 psf, therefore my condo can sell at $1,000 psf," said Mr Koh, director of Chris International.
    Why people use EC as benchmarks, it could be the other way round too. Govt had stopped building EC for many years and yet pc prices keep going up, so actually is EC based on PC or PC based on EC resale pricing?

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    By Nikki De Guzman:

    Prices of resale flats could change in the coming months as 50,000 newly-built flats are handed over to their owners, said National Development Minister Khaw Boon Wan.

    At a recent dialogue session, he noted that the government has indirect influence on home prices even if buyers and sellers are the ones who set the trends.

    Attended by over 40 participants, the dialogue focused on housing issues, reported My Paper.

    Mr Khaw also clarified his previous comments on the executive condominium (EC) scheme, stating that they were wrongly reported. He said that it was not about the money EC owners could make when selling their properties, but the subsidy they get from the government as compared to other new flat buyers.

    He explained that even if EC units are bought from developers, the land is still from the government, restricting them to build ECs and not private condominiums.

    “This market subsidy, compared to the subsidy given to someone who buys a (new non-EC) three- or four-room flat, is much more,” said Mr Khaw, adding that it would be unfair if a higher-earning EC buyer receives a larger subsidy compared to someone who earns less and purchases a new non-EC flat.

    Separately, the Minister also visited two HDB blocks in his constituency to distribute dengue-prevention leaflets in line with on-going awareness against the problem.

    http://www.propertyguru.com.sg/prope...prices-to-drop-

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    Quote Originally Posted by irisng
    I just wonder, does EC buyers get more subsidies from govt or BTO buyers.
    Govt sell the lands to the developers and does the govt control the pricing of the developers as to how much %age that the developers can make? Anyway not all EC buyers get the grant right? So if the developers have marked up EC price slightly lower than the PC, will the EC buyers still getting big subsidies.
    Land that is ear-marked for EC will have a much lower price compared to if the land is used for pte property.

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    EC and private difference in the same area is about 200psf currently. when MOP is over, the gap narrows to maybe less than 100psf from the current market examples.

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    Quote Originally Posted by leesg123
    Land that is ear-marked for EC will have a much lower price compared to if the land is used for pte property.
    But who set the profit margin to the final buyers? If the developers set higher profit margin, that means EC buyers didn't get much of the subsidies, isn't it?

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