On the 9 Dec 2013 MND made the following announcement to further refine the Executive Condo (EC) housing scheme:
1) Reduction of Cancellation Fees From 20% to 5%
2) Resale Levy for Second Time Applicants
3) Imposition of 30% Mortgage Servicing Ratio (MSR)
1) Previously a couple who could not complete the sale of the new EC will have to pay the penalty fee of 20% of the agreed purchase price. The new measure has put the new EC cancellation fee to be at the same criteria which is 5% of the purchase price.
2) This measure affects second-time applicants who are buying EC units directly from the developer, who will now have to pay a resale levy, similar to second-time applicants who are buying BTO flats. The applicable resale levy per the HDB website are as follow:
| First Subsidised Flat Type | Amount of Resale Levy Payable under the Revised Policy (From 3 Mar 2006*) |
| 2-room | $15,000 |
| 3-room | $30,000 |
| 4-room | $40,000 |
| 5-room | $45,000 |
| Executive Flat | $50,000 |
* only applicable for those who submit their resale application and book a 2nd subsidised flat on/after 3 Mar 2006
3) The latest Mortgage Service Ratio to be imposed on the EC buyer and this is the same measure applied upon the BTO buyers as well. By and large, such measure should not impact much of the affordability to those families with the household income up to 12k per month and buying the typical EC unit which is below $1M. One can make reference to my previous article posted here . I would think this measure will only impact limited big EC unit but this has also been mitigated by MND to set guideline on those “super size” EC units.
Will these measures dampen the demand of the new EC? Only time will tell but for a home buyer to upgrade its life style, this is still one of the good route to take to move from public housing to a private housing with full facilities to be enjoy by the family.
Towards our Financially Savvy Journey !
Wei Teck – property coach
Jan 2014
proplaunchsg@gmail.com
www.proplaunchsg.com
www.blissfulproperty.com
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