The average number of penthouse units in executive condominium (EC) projects has climbed slightly in the past year, according to market watchers.
The sale of a luxury penthouse recently has triggered a debate over the role of ECs.
Some analysts have told Channel NewsAsia that while ECs are still relevant, some rules could be tweaked.
ECs were introduced in 1995 and its objective is to provide alternative housing for households who do not qualify for public housing and are unable to afford private condominiums.
Recently-launched ECs often come with all the trappings of a private residential project. Such features include high quality fittings and even concierge services, but at a 25% discount in terms of prices.
But a penthouse at CityLife@Tampines stole the limelight when it was sold for an eye-catching S$2 million.
Property consultancy Knight Frank said that in 2010 and 2011, on average, penthouses made up about 3 to 5% of an EC development.
This number rose to between 5 and 6% last year.
"Developers have to think of new ways to entice buyers for their projects. One of the ways is to introduce luxurious penthouse units," said Alice Tan, senior manager of consultancy and research at Knight Frank.
"With this recent hype about the 400-square-metre penthouse unit, which was snapped up within an hour, it demonstrates that people are actually looking for luxurious living."
According to analysts, ECs still serve their purpose of providing alternative housing for the sandwiched class, but some rules could be fine-tuned.
ECs - a hybrid of private and public housing - come with ownership and resale restrictions. The buyer's income must not be more than $12,000 a month.
Currently, the government offers a grant of up to $30,000 for first-time buyers and does not require those upgrading from a public housing flat to pay a resale levy.
Mohd Ismail, CEO of Propnex suggested that the government could also put out guidelines to limit the size and number of large units within an EC project.
For example, he suggested that a penthouse unit should not be larger than 2,000sqft and larger units of between 1,200sqft and 1,500sqft should not constitute more than 15% of the development.
Meanwhile, some analysts say the trend of developing large EC units are not very different now as compared to the 90s.
Alan Cheong, director of research and consultancy at Savills said the number of sale transactions for EC units over 2000sqft remain quite similar at over two per cent on average, and the ongoing debate could be a result of rising property prices.
"All the while they had large units in ECs, people hardly made any noise until now," said Mr Cheong. "This thing is coming to haunt everyone because property prices are at an elevated level, everyone wants to have the cake and eat it and profit from it."
The government is expected to roll out more sites for EC development this year.
According to analysts, the projects will attract strong interest from developers who will continue to offer attractive EC units, comparable to those in the private condominiums.
The National Development Ministry said it is watching developments in the EC market closely and will consider further measures if needed.
Source: Channel News Asia
While we are on the subject of tweaking the EC rules, here's a thought: Why don't the Government just stipulate that penthouses be forbidden in EC projects altogether?
And to allow such ginormous units to be built on supposedly subsidized land parcels and with grants given to eligible buyers is (in our humble opinion as always) a terrible use of tax-payers' money.
If banning penthouses in new EC projects is untenable, the Government should at least disallowed any form of grants to be used for purchase of such units.
What do you think?
15 comments:
Interestingly, La Fiesta, the Private Condo (next to Sengkang MRT) that is being launched, has no penthouses. So not necessarily that ECs need to have penthouses.
Personally, I think that limiting the sizes of units in ECs is the most practical way in tweaking the EC rules.
Disallowing grants doesn't deter rich buyers from buying HUGELY SUBSIDIZED LaNDED IN THE SKY nor the developer from continuing to dishing out more LANDED IN THE SKY within the development(there's a huge demand for these). I believe if nothing is done to restrict the size, even if the govt restrict grants for penthouses, the developers will build maybe 4 or 5 landed in the sky in their development.
The more prudent measure for MND is to stick to the original objective of ECs. Bridge the gap. Beggars can't be choosers. If you want luxurious living and huge space, please go buy your private.If not, here's a 1500-1600 sqft 4bedrrom for your needs.
I actually think HDB shouldn't even create the EC category much like the DBSS category. Anyone earning below <$10k should have the right (be it rich or poor) to own a HDB as a 1st home. That's it. After that, you are on your own.. if you want private, please go buy. If you cannot, please stay in your HDB. Those sandwiched ones will have to get a smaller private at OCR instead of RCR or CCR. tHAT'S life folks.. You are earning >$12k and i'm sure you will not be worse off than anyone if you had to buy a private or resale HDB(with grant).
I am a recent EC buyer and I am very thankful that the Govt created the EC scheme.
There are many GENUINE EC buyers i.e. the so called sandwiched class. Those who can afford the big EC penthouse units are really the minority.
ECs give me, my future EC neighbours and many other EC buyers to live the condo lifestyle without over stretching our finances. Long may the Govt continue the EC scheme, but with new guidelines on the sizes of the EC units (i.e. the EC units don't need to exceed 2,000 square feet) so as to minimise "abuse" of the EC scheme.
thankful becoz he beneficiary.
PAPa should use the monies to help the lesser chidren with no homes, single parents who live in rental flats and the maginalised. Why must help ppl who can afford $800K homes. Siao tong
This govt housing. Basic amenity. Make some money o lah
PPL can afford 2 m apt is NOT SANDWICHED. They can afford to eat prime roast beef steak, not basic spam sadwich ok!!!!
{Quote: thankful becoz he beneficiary.
PAPa should use the monies to help the lesser chidren with no homes, single parents who live in rental flats and the maginalised. Why must help ppl who can afford $800K homes. Siao tong}
So what if I and other EC buyers benefit from PAP policy on EC schemes. You make it sound as though the govt paid us to buy ECs - the money is PAID BY US !!!! And note that why we pay lower for EC compared to PC is also due to the restrictions placed on EC compared to PC - e.g. Minimum Occupation Period of 5 yrs, can only sell to foreigners after 10 yrs.
And many of us EC buyers will contribute too to help the unfortunate.
I wonder if HDB (no need EC lah, low ball park first) dwellers after selling and make 200K (small number first lah, no need 500K ) profit will help unfortunate with an equivalent of $20K?... PAPa old already. Senile or not? think wrongly
Think helping the unfortunate is not just about dollars and cents - it is also about spending time with them and helping them in other ways (e.g. providing transport, providing care, etc.)
And note that why we pay lower for EC compared to PC is also due to the restrictions placed on EC compared to PC - e.g. Minimum Occupation Period of 5 yrs, can only sell to foreigners after 10 yrs....5 years long meh? 10 years long neh? Its a home dah...not flippant flippin play the mkt dah! siao tong
some ppl 5 years BABIEEE Also cant come out of the CANAL DAH!
The EC is indeed a hot topic. We cannot disregard that there is an opportunity cost with regards to taxpayer's money.
The SGD 2m EC has indeed been priced incorrectly and there is indeed some flaw in the allocation of this resource to upper middle class Singaporean (native born here or new residents). For the record, the ultimate payor was a parent buying for a son who may not even be living in Singapore (he is in USA, together with wife). Surely, if a person who can $800,000 in a combination of cash and CPF is surely not sandwiched.
For the moment, the allocation system is flawed and the authorities indeed have to step in to intervene.
{And note that why we pay lower for EC compared to PC is also due to the restrictions placed on EC compared to PC - e.g. Minimum Occupation Period of 5 yrs, can only sell to foreigners after 10 yrs....5 years long meh? 10 years long neh? Its a home dah...not flippant flippin play the mkt dah! siao tong]
PC market is where you will find flippant flipping. If you can sell only after 5 years (+ another 2 to 3 years of construction time), I won't call that flipping!
It is such a big commitment to purchase a home. Why would a person change a home after 5 years?
At 2.05M, the 40% down would comprise S$800 cash in a combination of cash and CPF. This is not including the 3% stamp duty. So, this is sandwich class in Singapore and taxpayers should subsidize these sandwiched people?
Ditto for S$1.7m ... S$1.5m downwards to S$800K.
For those eating sandwich class, better to buy HDB rather than to pretend that they can eat beef steak (at the expense of taxpayers and SG's limited resources).
At 2.05m - for sandwich class? surely there is a flaw in some thought. Ditto for S$1.5m (40% down S$600,000, excluding SD).
Err ..... the so called Sandwich class also have to pay taxes, and probably this class of citizens pay more taxes (on average per person) versus at least half the population of Singapore.
Just limit the sizes of the EC units - not more than 2,000 square feet.
SG not productive enough says some ppl who bark bark bark.
Construction of new flats will be delayed. HDB prices will increase Some more! Yeah to eating sandwich in HDB!
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