Four 10 Hdb Owners Feel Ecs Still Relevant Pricing Concerns Persist Propnex
PROPNEX RELEASES RESULTS OF 2024 EC SENTIMENT SURVEY
On August 5, PropNex revealed the findings of its 2024 sentiment survey on Executive Condos (ECs). The survey, conducted among 1,250 respondents, showed that 44% of HDB owners agreed or strongly agreed that ECs were still a viable housing option for middle- and upper-income families. However, 55% of the respondents felt that current EC prices were out of reach for them, with 58% of them suggesting that increasing the number of EC sites for tender in the GLS programme could help to alleviate this issue.
Ismail Gafoor, CEO of PropNex, acknowledged the popularity of ECs among homebuyers in Singapore and noted that new EC projects typically see stronger sales at launch compared to other private condo launches due to their more affordable pricing. However, Gafoor also expressed concern over the rising prices of new EC projects, which may result in them becoming unaffordable for their target market.
The survey results also showed that the most popular suggestion for improving EC affordability among respondents (58%) was to increase the number of EC sites for tender in the GLS programme. Only two to three EC sites have been available for tender on the GLS confirmed list since 2015, and this has led to an increase in the average land rate for EC sites.
Other suggestions for addressing the issue of affordability included raising the household income ceiling (48%) and increasing the MSR ratio for ECs (39%). According to PropNex, raising the MSR from its current cap of 30% to 40% or even 45% could be a viable option, as it would be more aligned with the current TDSR framework of 55% that applies to private residential properties. The agency also proposed increasing the income ceiling for prospective buyers to $18,000 or even $20,000, as well as increasing the supply of ECs to four sites per year.
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However, Wong Siew Ying, head of research and content at PropNex, warned that these policy adjustments could lead to an unintended effect of higher-income buyers crowding out those who earn less. She also noted that any increase in the MSR could prompt developers to raise the prices of EC units, assuming that buyers have more available capital from bank loans.