The Singapore Government released new ec measures in an attempt to cool the property market in Singapore. In particular, this round of cooling measures was targeted at the EC market. It was announced yesterday by the Ministry of National Development (MND) that there are 3 measures introduced to cool the Executive Condominium market.
New EC Measures
Specifically, and the most important new ec measures to many buyers, the government announce that the Mortgage Service Ratio (MSR) for Executive Condominium will be reduced to 30% of the gross monthly income of the applicants. Previously, there were no restrictions in servicing mortgage payments in the EC market. This will have an impact on many EC buyers as calculations done have shown that for a salary cap of $12K, should the buyer intend to take a 80% loan for the property, they are at most able to purchase only a $1.0M property. Most 4 bedrooms will have pricing above $1.0M.
The second ec measure is that for 2nd timers now who intend to buy an EC, they will need to pay resale levy. The levy amount will range from $15K – $50K depending on the size of their current HDB flat. As most EC buyers are very interested in EC also mainly because there is no resale levy, this measure will also have a significant impact on the housing market.
The Impact of new EC measures
The 3rd measure is the reduction in the cancellation fee should buyers who have paid the initial downpayment of 20%. The cancellation fee is now reduced to 5%.
The above measures might have a significant impact on Executive Condominiums and this might cause a slight drop in EC prices and developers may have to sell smaller units such it is below the $1.0M. The Hillford might then be a alternative choice as the quantum is very low and it is a private condominium.