Mar 15, 2010

Govt to offer more exec condos this year

Move is to meet housing needs of sandwiched group: Mah Bow Tan

By Esther Teo

MORE executive condominiums (ECs) will be built this year to meet the housing needs of the 'sandwiched group', said National Development Minister Mah Bow Tan yesterday.

This group refers to couples who do not qualify for new Housing Development Board (HDB) flats because their combined monthly income exceeds the $8,000 cap, but who may find private property too expensive.

Mr Mah, who was a guest on Channel NewsAsia's programme Talking Point aired last night, said that ECs will make up about 10 per cent of the approximately 12,000 new flats to be built this year.

Dr Lim Wee Kiak, the MP for Sembawang GRC, and Ngee Ann Polytechnic real estate lecturer Nicholas Mak were the other guests in the show hosted by Channel NewsAsia managing director Debra Soon.

'It is well-designed, has good location, it is something that will have all the amenities and at the same time you can enjoy the grant... That is the reason why we will be putting more ECs on the market,' Mr Mah said.

He added that since the HDB caters to about 80 per cent of the population with incomes ranging from the low to the upper-middle, ECs will be one housing form that the Government will keep tabs on.

'We have recently let out two tenders. And if there is a market and there is a demand, we will let out more,' he said.

ECs come with condominium facilities but have initial sale restrictions similar to those for public housing. They become a private property fully only after a decade.

They were introduced in 1995 to bridge the gap between public housing and private apartments, aimed at Singaporeans who could afford more than an HDB flat but might find private property out of their reach.

The gross monthly household incomes of buyers of new EC units cannot exceed $10,000.

Responding to a question by Dr Lim that the aggressive bidding of the two recently closed EC tenders in Sengkang and Yishun might push up EC prices, Mr Mah said that developers are mindful of the monthly income cap of buyers and thus would not bid too excessively.

PropNex chief executive Mohamed Ismail told The Straits Times after the show that with these two sites expected to yield 905 units, he expects to see at least one more site offered this year. There could even be two more ECs if the demand for these initial projects are strong, he added.

Rising public housing prices have been a hot topic among Singaporeans. Early this month, HDB raised the minimum occupation period for resale flat buyers to three years, up from as little as one year, to cool speculative demand for HDB flats.

Asked if the measure was too mild, Mr Mah said it was a calibrated move to remove some froth caused by speculative demand. It was not meant to crash prices or curtail genuine demand from home buyers.

Several suggestions to meet buyers' demand for flats were offered during the 45-minute talkshow. Mr Mak suggested reexamining the buyer's selection process to assess why so many first-time applicants rejected their flats while Dr Lim asked if the differential in the pricing of less attractive units compared to the more desirable ones is big enough.

Mr Mah emphasised the unique role that HDB had to play - catering to different segments of income groups, to provide both home-ownership and eventually a source of retirement income.

Despite buyers' unhappiness over rising prices, the public housing market is generally best left to market forces, Mr Mah added. But he also promised that first time buyers of new HDB flats will not be priced out of the market.

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