Affordability of Executive Condominiums for HDB Upgraders

Mr Gan Thiam Poh asked the Minister for National Development (a) whether the Government will review the Executive Condominium (EC) scheme and ensure that the prices of ECs are within the reach of HDB upgraders in view of the widening gap between private property and HDB prices, without affecting the affordability of HDB flats for Singaporeans; and (b) whether there are plans to increase the supply of ECs to meet the demand.

The Executive Condominium (EC) Housing Scheme was introduced to provide an affordable option for higher-income Singaporeans who aspire to own private housing. ECs offer similar design features and facilities as private condominiums and are treated as strata-titled private housing after 10 years.

The Government has put in place various measures to ensure that ECs are priced affordably. These include initial eligibility and ownership restrictions, such as the income ceiling of $16,000 and a minimum occupation period, to prevent speculative purchases. In addition, eligible first-timer families can receive a CPF Housing Grant of up to $30,000 for their EC purchases from developers.

Since the first quarter of 2020, both the private and public housing markets have remained buoyant. The increase in housing prices reflects broad-based demand for housing, supported by the previous low interest rate environment. The Government has implemented two rounds of measures since December 2021 to moderate the housing market and encourage home buyers to exercise financial prudence in their purchases.

In particular, the following measures apply to housing loans provided by private financial institutions for EC purchases: (a) tightening of the total debt servicing ratio (TDSR) threshold from 60% to 55%; and (b) raising the medium-term interest rate floor which is used to compute TDSR and mortgage servicing ratio (MSR) by 0.5 percentage point. We expect these measures to moderate the pace of housing price increases.

In planning for the supply of ECs, the Government takes into consideration multiple factors, such as the existing unsold stock, take-up rate of the new EC units and prevailing market sentiments. We will continue to monitor the housing market conditions closely and review our housing policies to ensure that the EC Housing Scheme remains relevant in meeting the housing needs of Singaporeans. This would include adjusting the supply of future Government land sales programmes, including EC sites, as necessary.