Khaw lauds EC scheme but will stay vigilant to prevent abuses

The executive condominium (EC) scheme is a "wonderful" one and should continue, as the government addresses prior abuses, Minister for National Development Khaw Boon Wan said yesterday.

Responding to queries from Members of Parliament (MPs), he said ECs are relevant, protecting middle-income Singaporeans from competition and ensuring them a market- friendly way to buy condominiums at affordable prices.

"And if I may give an analogy, it's like offering you a Lexus at a Corolla price," he told Parliament.

"But only Singaporeans have this privilege of doing so and they know that in due course the price will go up to Lexus and above Lexus levels."

However, he said the scheme had been taken advantage of by some developers and buyers, which prompted new measures targeted at this segment of the residential market.

Developers had taken to building super-sized ECs, Mr Khaw said, and in some instances had exploited planning rules.

A 4,349-square-foot (sq ft) penthouse at Citylife@ Tampines that included a 1,600 sq ft roof terrace sold for $2.05 million in December.

Previously, development charges need not be paid on the roof terrace, and there were no restrictions on the size of the unit.

Two new measures that came into effect on Saturday: limiting each new EC unit to 160 square metres (1,722 sq ft); and counting private enclosed spaces and roof terraces as gross floor area, sought to address this.

Mr Khaw also explained the move to restrict new dual-key ECs to multi-generational families.

He said some buyers had taken advantage of the concept, meant to offer privacy, to instead rent units out for immediate yield.

Overall, the abuses had led to families that can afford private properties entering the EC market.

"They were very much encouraged by these large units, huge units," Mr Khaw said.

"So now that we have fixed this rule, I will continue to be vigilant and see, and if indeed the abuse continues on, we may have to think of other ways of fixing this problem," he added.

MPs raised some suggestions of their own. Mountbatten MP Lim Biow Chuan asked if a price cap to prevent buyers from overstretching their finances would be considered, to which Mr Khaw responded: "The selling price of ECs were very much dependent on the size of the EC, so by capping the size of the EC, I think automatically the price will become more sober."

Nee Soon Group Representation Constituency MP Lee Bee Wah asked if it was possible to reintroduce new multi-generational flats. She said some of her residents had appealed for such housing units as they could not afford an EC.

Mr Khaw said he will "take a look" but noted that the popularity of the dual- key EC units was down to demand from buyers who were not multi-generational families.

Source: Business Times –15 January 2013