Latest Rules for New Launch Executive Condo
The Ministry of National Development (MND) has announced new rules governing the purchase of new executive condo launch (EC). Aimed at helping home buyers and to regulate ECs in line with the rules that apply to public housing in order to support a stable EC market.
One of the three changes proposed is similar to that for Housing Board purchases, where the cancellation fee for EC buyers who back out of sales and purchase agreements have been cut from 20% to 5%.
Secondly, applicants who are second-timers who buy new executive condo launch EC units directly from developers will have to pay a resale levy. Likewise, the rule will apply to EC land sales launched on or after 9 December 2013.
Lastly, EC buyers will have tighter loan curbs placed on them as the repayments for a mortgage for an EC unit is capped at 30% of the buyer’s gross monthly income. Previously, EC buyers were limited by the total debt servicing ratio, which caps a borrower’s monthly repayments on mortgages at 60% of his gross monthly income. The cap applies to purchases where the option to purchase is granted on or after 10 December 2013.
The above Three rules will apply to EC land sales launched on or after 9 December 2013.
With the new measures in place, buyers need to ensure that they can purchase in accordance to their earning capacity and refrained from overstretching their finances and supports an affordable and sustainable EC Market.
Property analysts expect buyers to considerate carefully about buying pricey EC units now as developers have generally increased prices due to the improved EC demand.
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