Why there shouldn't be costly EC penthouse units
THE executive condominium (EC) policy was conceived as a way to bridge the affordability gap between HDB and private property so that the aspiring middle class in Singapore can own their dream homes with private facilities like a swimming pool and gym ("Developer keen on more EC penthouses"; yesterday). Government subsidies are provided to make EC homes affordable but in turn, buyers are subject to time bound sales restriction.
If this is still the case, I cannot see the rationale of developing penthouse units in ECs for the following reasons:
First, a penthouse costing over $2 million will take a couple, with combined pre-tax income of $12,000 per month and spending half of that for housing, nearly 10 years to accumulate the down payment and over 20 years to pay off the mortgage. On top of this, the couple would still have to pay for income taxes, children's education and living expenses. The cost seems far too high.
Second, if the couple can afford to buy a $2 million penthouse, do they really need a government subsidy? Would it not be more consistent with the intent of the EC policy to split the penthouse into two units, and sell them to two other couples who need the subsidy?
Third, if the couple is unable to afford the unit on their own, and sought help from their family members, the case for a penthouse in an EC becomes even tenuous. It encourages the couple to spend beyond their means, which is inconsistent with the public housing policy. Also, if their family members (who may own existing properties), are helping to pay, does the couple still need additional help from the government subsidies?
Fourth, do we really need to have a penthouse in an EC development to promote the multi-generation family unit? What about the families that cannot afford penthouses? There are existing public housing schemes that address the needs of multi-generation families. Penthouses in EC are hardly needed.
I suggest that the Government review further roll outs of penthouse units in future EC developments.