Executive Condominium Housing Scheme to be refined

[CityFarmer]

The impact should be minimum...

Executive Condominium Housing Scheme to be refined

SINGAPORE — The Government will implement three measures for Executive Condominium (EC) developments to bring the terms for ECs closer to that for public housing, a statement announced today (Dec 9)

This follows a review by Ministry of National Development (MND) on the EC Housing Scheme, taking into account feedback from the Our Singapore Conversation on Housing.

The first measure is to reduce the cancellation fees for ECS from 20 per cent to 5 per cent for units purchased from today.

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 imposed significant financial burden on young couples who subsequently are not able to proceed with their marriage and hence the EC purchase.

Second-timer applicants who buy EC units directly from property developers will now be required to pay a resale levy, similar to second-timer applicants who buy BTO flats.

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 Government says the alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.

The final measure will the Monetary Authority of Singapore (MAS) cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30 per cent 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. The move is also aimed at discouraging EC buyers from over-stretching their finances.

The revised MSR cap will apply to EC purchases where the Option to Purchase is granted on or after tomorrow (Dec 10).
http://www.todayonline.com/singapore/exe...be-refined

[chialc88]

more curb... gov is confidence that the trend is still up


A Life not Reflected is a Life not Worth Living.

[pianist]

is the trend really still up?
the msr, I wonder how the impact like?

[Behappyalways]

there will be some deals that would be rushed to be completed by tonight (23:59).....

[countonme]

No wonder many people rush for EC, no resale level. That a way to get two times subsidy from gov. It took a while to plug this one.

[specuvestor]

The punchbowl should have been taken away earlier as discussed in other threads. There is no reason why the scheme is so different from other HDB flats. The caveat is that those who bought EC during the 1H13 frenzy is actually right to capitalise on the loophole from a purely opportunistic point of view.

This is a glaring execution mistake.

[opmi]

there will be some deals that would be rushed to be completed by tonight (23:59).....

DBSS also dont have resale levy.

DBSS & EC are examples of Govt 'passing the buck' policies. 'Outsource' the problems to the market. Authority without accountability.

Just sell land at market price, collect revenues and lock it up in reserves for elusive 'a rainy day'. Anything wrong, just blame the market. Typical "Singapore Inc" civil service mentality.

[Behappyalways]

Refining the Executive Condominium Housing Scheme

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.

http://app.mnd.gov.sg/Newsroom/NewsPage....gory=Press Release&year=2013&RA1=&RA2=&RA3=