Cooling Measures For Executive Condo Market
EC Cooling Measures help support a stable and sustainable EC market.
Summary of EC Cooling Measures
The Government will reduce the cancellation fees for Executive Condo, from 20% to 5% of the purchase price. This measure will relieve the financial burden of buyers who have to cancel their EC bookings after signing the Sale & Purchase Agreement.
Unlike buyers of private housing, buyers of Executive Condo units cannot sub-sell their units if they cannot complete their purchase. They have to pay the cancellation fee. Especially for young couples, who subsequently not able to proceed with their marriage and hence, the Executive Condo purchase. The practice before this measure has imposed a significant financial burden on them.
The new cancellation fee applies to Executive Condo land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
Second-timer applicants who buy Executive Condo unit directly from property developers have to pay a resale levy, similar to second-timer applicants who buy BTO flats.
Find out more here.
The Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for Executive Condo units bought directly from property developers at 30% of a borrower’s gross monthly income.
This measure is in line with earlier cooling measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages Executive Condo buyers from over-stretching their finances and supports an affordable and sustainable Executive Condo (EC) market.
The 30% MSR cap will apply to Executive Condo purchases where the Option to Purchase is granted on or after 10 Dec 2013. The MSR cap of 30% will also apply to refinance facilities of EC Executive Condo purchased directly from property developers (which are still within the minimum occupation period).
The measure will cap the maximum strata floor area of new Executive Condo units at 160 square metres.
Sales of new dual-key Executive Condo units will be restricted to multi-generational families only.
Developers of future Executive Condo sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.
Private enclosed spaces and private roof terraces will be part of the gross floor area (GFA). The GFA of such spaces in non-landed residential developments, including Executive Condo, will be counted as part of the ‘bonus’ GFA of residential construction and subject to payment of charges. This measure is in line with the treatment of balconies under URA’s current guidelines.