Executive Condominium Housing Scheme to be refined

[princess_morbucks]

http://app.mnd.gov.sg/Newsroom/NewsP...RA1=&RA2=&RA3=

Refining the Executive Condominium Housing Scheme 09 Dec 2013 07:30 PM

The Government will implement three measures for Executive Condominium (EC) developments to bring the terms for ECs closer to that for public housing, and help support a stable and sustainable EC market. This follows a review by MND on the EC Housing Scheme, taking into account feedback from the Our Singapore Conversation on Housing.

I. Reduce EC Cancellation Fees

2 First, we will reduce the cancellation fees for ECs from 20% to 5% of the purchase price. This will relieve the financial burden of buyers who have to cancel their EC bookings after signing the Sale & Purchase Agreement. The new cancellation fee will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

3 The cancellation fee for ECs is currently set at 20% of the purchase price, similar to those for private housing. However, unlike buyers of private housing, buyers of EC units cannot sub-sell their units if they cannot complete their purchase, and have to pay the cancellation fee. This has especially imposed significant financial burden on young couples who subsequently are not able to proceed with their marriage and hence the EC purchase.

4 We will therefore align the cancellation fees for EC units with that for HDB Build-to-Order (BTO) flats, and reduce them from 20% to 5% of the purchase price.

II. Resale Levy for Second-Timer Applicants

5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.

III. Revision of Mortgage Loan Terms

7 Third, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.

8 The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.1

Enquiries

9 For further enquiries on any of the above measures, the public can contact the HDB Sales Customer Service Line: 1800-866-3066.


Issued by: Ministry of National Development
Date 9 Dec 2013

[GForce]

Going forward EC demand will drop!
I can see a cycle repeating the tide has turned.

[Khng8]

Indeed. The screws are turned one by one.

[4wheels]

III. Revision of Mortgage Loan Terms

7 Third, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.

8 The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.1


Does this mean if I earn 10k gross, my loan instalment per month is 3k max?

[princess_morbucks]

Does this mean if I earn 10k gross, my loan instalment per month is 3k max?

The TDSR of 60% , and now MSR of 30% will apply to the loan repayment of EC.

That means if my monthly salary is $10k, I can only pay up to $3k per month, provided that I do not have other exisiting loan, eg car loan, study loan, etc.
Loan period capped at 30years maximum.

[yowetan]

What is the MSR for private condo then?

[princess_morbucks]

What is the MSR for private condo then?

IIRC, there is no MSR for pte ppty.

[yowetan]

IIRC, there is no MSR for pte ppty.

I will write to khaw on this then. Thanks.

[Ringo33]

government is basically tell greedy investors that every singaporeans will be given only one shot at subsidized government housing, be it BTO or EC, and they are encouraging first timer to take advantage of government grants.
So for those who already gain once, they should stop going back for more.

I personally do not see this measures will have great impact on the demand side because EC ultimately is still the best bang for bucks private housing for own stay.

Perhaps land bid for EC might some what cool a little. But that again doesnt mean it will translate to lower selling price

[solsys]

Resale levy for 2nd timer applicant of ECs will lend support to HDB prices in its current downward COV trend.......

It is also to encourage 2nd timer to look at BTOs instead.

Now times are still good...... buy already won't cancel....

Government is really trying to protect people, if market turns.... everyone will cancel and developer suck thumb......

[Adva181]

800psf EC plus 20% resale levy = assume 880psf.
Support OCR PC price at 1100-1200psf?

[4wheels]

II. Resale Levy for Second-Timer Applicants

5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.


does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?

[newbie11]

The TDSR of 60% , and now MSR of 30% will apply to the loan repayment of EC.

That means if my monthly salary is $10k, I can only pay up to $3k per month, provided that I do not have other exisiting loan, eg car loan, study loan, etc.
Loan period capped at 30years maximum.

30% MSR means if my monthly salary is $10k, I can only pay up to $3k per month.

60% TDSR means if my monthly salary is $10k, new housing loan and all other loans cannot exceed 6k.

irony is a person without loan can pass TDSR but fail MSR for purchase of HDB and EC.

[4wheels]

30% MSR means if my monthly salary is $10k, I can only pay up to $3k per month.

.

assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.

[newbie11]

assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.

assessment is based on 3.5% and max 30 years for 80% LTV.

[Pikachu1245]

Resale levy for 2nd timer applicant of ECs will lend support to HDB prices in its current downward COV trend.......

It is also to encourage 2nd timer to look at BTOs instead.

Now times are still good...... buy already won't cancel....

Government is really trying to protect people, if market turns.... everyone will cancel and developer suck thumb......

Seems like no more chance today onwards for those thinking of hoot and buy big big ec and look forward to gain big big after 5 years from TOP.

[leesg123]

Too lenient. EC should be scrapped. Either HDB or pte. Make it simple.

[GIG]

II. Resale Levy for Second-Timer Applicants

5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.


does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?

1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.

[proud owner]

Seems like no more chance today onwards for those thinking of hoot and buy big big ec and look forward to gain big big after 5 years from TOP.

cant help but feel that those who acted fast benefitted again ...


sometimes we cannot fault singaporeans for being Kiasu ... once again those who got in early and FAST ... emerged the winner once more ...


sigh

[puffer_fish]

The more barriers and requirements the government install, the safer it would be for investors.

good news. Excellent move by khaw, brilliant in planning and execution

too bad lky Is my mp , cant vote for khaw

[CCR]

The more barriers and requirements the government install, the safer it would be for investors.

good news. Excellent move by khaw, brilliant in planning and execution

too bad lky Is my mp , cant vote for khaw

Why more measures = safer FOR INVESTOR?

Wouldn't market Correct? How can that be safer for Investor?

[puffer_fish]

in current situation, only players with strong finances are able to invest.

so even corrections means nothing cos with investors that could afford 50% down payments excluding 15% taxes , etc .....

what i am more afraid is investors with weak finances, investing.

just like swimming, if the whole cohort are strong swimmers, everyone would be able to handle the tides.

really hats off to khaw for coming up with such high barriers of entry

anyway corrections means you could buy the same place at cheaper rates for investors whom just want to accumulate wealth.

[newbie11]

prices must offset absd before labelled as cheaper

[taggy]

II. Resale Levy for Second-Timer Applicants

5 Second, we will now require second-timer applicants who buy EC units directly from property developers to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

6 Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.


does this mean for those who bought 2nd EC from developer? Is 1st time BTO, 2nd time EC counted?

1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.

http://www.channelnewsasia.com/news/...ng/916838.html
Second-timer applicants who buy EC units directly from property developers will have to pay a resale levy, similar to second-timer applicants who buy BTO flats.
The levy will range from S$15,000 to S$50,000 depending on the flat type of their first HDB property.

resale levy impact all existing subsidised hdb owners who want to upgrade to an EC. Actually, this is just reverting back to the old rule. In the past, hdb owners have to pay resale levy for upgrading to EC.
So if they don't want to pay levy, then must go direct to PC, not EC.

[Arcachon]

1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. Actually resale levy impact is negligible because it affect on those previous EC owners. The most impact on the current new EC market will be the MSR. Everyone buying EC will have impact including those who don't have to pay resale levy.

Don't understand, bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. If you buy at the right time EC or PC is still the same, 2006 got no EC so no huge profit anyone buy PC in 2006 Huat Big Big why wait and buy EC

If you have SGD 100,000 and buy a PC in 2006 now you should have at least a 2 Bedroom PC and a 3 Bedroom PH PC UC in 2011.

The reason for all these CMs is because more people begin to understand "What is Money."

http://www.youtube.com/watch?v=4It8bMdqs0M

[taggy]

1st BTO and 2nd EC no resale levy.
Govt is plugging the hole on those who have bought EC the first time, selling it at huge profit
and buy cheaper EC the 2nd time.
Actually resale levy impact is negligible because it affect on those previous EC owners.
The most impact on the current new EC market will be the MSR.
Everyone buying EC will have impact including those who don't have to pay resale levy.

Don't understand, bought EC the first time, selling it at huge profit and buy cheaper EC the 2nd time. If you buy at the right time EC or PC is still the same, 2006 got no EC so no huge profit anyone buy PC in 2006 Huat Big Big why wait and buy EC

If you have SGD 100,000 and buy a PC in 2006 now you should have at least a 2 Bedroom PC and a 3 Bedroom PH PC UC in 2011.

in the first place, for existing EC owners to sell EC, then buy another EC from developers... they have to wait for 30 months (same rule as ex-PC owners)
http://www.hdb.gov.sg/fi10/fi10321p....ocument#Owners

Ex-owners of an EC:
Are you, your spouse or any of the essential occupiers listed in the application an ex-owner of an Executive Condominium bought directly from the developer? If yes, you would need to meet a 5-year period from the date of taking possession of the earlier Executive Condominium.

30-Month Period:
In addition, you need to wait out a 30-month period from the effective date of disposal (i.e., date of legal completion of the sale of their Executive Condominium, evidenced by the Notice of Transfer or such other documentary evidence as HDB may require) of the Executive Condominium before you can apply to buy another Executive Condominium directly from the developer.

[taggy]

The reason for all these CMs is because more people begin to understand "What is Money."

so effect of this EC cm are these ?
- hdb upgraders must well go for PC directly (to avoid resale levy)
- hdb upgraders must well go for bigger/better located resale HDB (to avoid resale levy)
- less HDB upgraders to support developer EC pricing
- in a way, PC/resale PC/resale hdb get a bit more potential buyers ...er.. maybe new OCR PC gain more buyers, since buyers who go for new EC, means can wait for construction of 3 years to get a NEW unit.

[Reuben]

assuming 2% interest rate, and for 25 years loan, a person can loan upto 700k for a $2966 monthly instalment.

Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?

[chestnut]

Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?

2 things will most likely happen....

1. For big units, there is this thing called - "dad and/or mum's money"... For more down payment....

2. Developers will need to build more affordable flats...

[taggy]

Can someone explain how to buy any EC if the loan is more than 1.2 million with this MSR if u are earning only $10k?

EC salary cap is $12k
$12k * 30% MSR = $3.6k

house price = $1m
loan 80% = $800k
tenture = 30 yrs
interest = 3.5%
installment = $3,592.36

so actually can only buy up to $1m EC if loan 80%.
to buy 1.2m EC, pay more in cash lor