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Date [ 2013-12-27, 06:20 ]

New measures have been introduced for this range of housing


(Kuala Lumpur=Koreanpress) by Benjamin Kim = Three measures will be implemented to bring terms for Executive Condominiums (EC) closer to public housing for a stable and sustainable EC market. This follows a review by Ministry of National Development and the ED Housing Scheme

Cancellation fees for ECs will be reduced from 20% to 5% of the purchase price. Second-timer applicants buying EC units directly from property developers will now be required to pay a resale levy, similar to second timer BTO applicants. The Mortgage Servicing Ratio (MSR) for housing loans will now be capped at 30% of a borrower’s gross monthly income.

Reduction of EC Cancellation Fees

First, the cancellation fees for ECs will be reduced from 20% to 5% of the purchase price. This will relieve the financial burden of buyers who have to cancel their EC bookings after signing the Sale & Purchase Agreement. The new cancellation fee will be applied to EC land sales which are launched on or after December 9. 2013, including those where the tenders have not closed.

The cancellation fee for ECs is currently set at 20% of the purchase price, similar to those for private housing. However, unlike buyers of private housing, buyers of EC units cannot sub-sell their units if they cannot complete their purchase, and have to pay the cancellation fee. This has especially imposed significant financial burden on young couples who subsequently are not able to proceed with their marriage and hence the EC purchase.

Thus the cancellation fees for EC units will be aligned with that for HDB Build-to-Order (BTO) flats, and reduced from 20% to 5% of the purchase price.

Resale Levy for Second-Timer Applicants

Second, we will now require Second-timer applicants who buy EC units directly from property developers are now required to pay a resale levy, similar to second-timer applicants who buy BTO flats. The new requirement will be applied to EC land sales which were launched on or after December 9, 2013, including those where the tenders have not closed.

Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The alignment of treatment with second-timer applicants who buy BTO flats will ensure greater parity.

Revision of Mortgage Loan Terms

Third, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.

The MSR cap of 30% will also apply to refinancing facilities of ECs purchased directly from property developers and which are still within the minimum occupation period, unless certain conditions for exemption are met.

The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after December 10, 2013.

Enquiries

For further enquiries on any of the above measures, the public can contact the HDB Sales Customer Service Line: 1800-866-3066. 

abc@koreanpress.net

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