From iTODAY:Floor area for ECs capped at 160 sq m

Sumita Sreedharan | 12 Jan, 2013 6:00 AM

SINGAPORE – The Government yesterday introduced more measures to ensure that Executive Condominiums (ECs) continue to serve as an affordable housing option for middle-income Singaporean families, four days after National Development Minister Khaw Boon Wan directed the Urban Redevelopment Authority to fix a loophole that allows property developers to sell off free outdoor open spaces for profit.

There has been recent debate on super-sized EC penthouses with one breaching the S$2-million mark. Six Members of Parliament have filed questions on the issue when Parliament sits on Monday, while MP for Bishan-Toa Payoh GRC, Mr Hri Kumar Nair, yesterday called for ECs to be scrapped in a note he posted on his Facebook.

Starting today, new EC units will be capped at 160 square metres, half the size of the largest penthouse at the recent EC project CityLife@Tampines. Buyers of new dual-key EC units will also be restricted to multi-generational families.

Further, rooftop terraces and private enclosed spaces will be subject to payment of development charges – in line with URA’s current guidelines on balconies.

The three measures “ought to return ECs to its original intent”, said Mr Khaw yesterday.

He noted that ECs with million-dollar tags “is a recent” trend and the prices of ECs are in line with “what the market thinks the target buyers can afford”.

“But when they start exceeding 200 square metres and charging a couple of a million dollars, one would ask, ‘How can an S$12,000 income group family afford such a unit’,” said Mr Khaw.

He felt that in limiting the size of the EC that developers can build, it would “automatically” bring the price down.

Mr Lee Sze Teck, DWG’s Senior Manager for Training, Research and Consultancy, felt that with a typical family size of three members here, there is “little need for large units”. “Further, if buyers can afford large EC units, they will be able to buy from the private residential market. There is little reason for them to compete with other buyers for subsidised housing,” he added.

Under the new regulations, future EC developers who acquire land under the Government Land Sales Scheme will only be allowed to launch units for sale 15 months from the date of the award of the site, or after the physical foundation works are completed.

This time restriction will mean that developers will no longer be able to shift the market risk of the development onto the shoulders of the buyers. Further, by not being to market their developments immediately, developers will also have to take into account the market in the coming years.

Mr Khaw called the EC scheme “a good and clever one” that allowed Singaporean families to purchase condominiums at lower prices yet enjoy the same appreciation in price of private condominiums. He said that as developers purchase the land at prices that are around 30 to 40 per cent lower than those set aside for private housing, these savings can be eventually passed on to EC buyers.