10-year MOP for executive condos, more EC units for first-timers to tackle affordability concerns

SINGAPORE - Buyers of new executive condominiums (ECs) will soon have to live in their homes for 10 years before they can sell them – double the current minimum occupation period (MOP) of five years.

More units will also be set aside for first-time home buyers to give them a better chance of securing a unit and to encourage developers to keep prices down, National Development Minister Chee Hong Tat said on May 8.

A deferred payment scheme, which allows buyers to pay a 20 per cent down payment and defer the remainder until the project obtains its temporary occupation permit, will be scrapped to encourage financial prudence, he said.

These measures, which come on the back of a review of the EC scheme after concerns over affordability, will apply to all government land sale sites for ECs with tenders closing from May 8.

They will not apply to EC projects that have already been launched for sale, or sites for which tenders have closed.

The first two sites to be affected by the new measures are located in Canberra Drive and Sembawang Drive.

The Canberra site will be launched for sale to developers in May and the Sembawang site in June.

ECs were introduced in 1995 to bridge the gap between public and private housing. They are priced about 20 per cent to 30 per cent lower than comparable private condominiums, Mr Chee said in a speech at a symposium on urban housing organised by NUS and held at Conrad Singapore Orchard.

But he noted that the proportion of first-time EC buyers has decreased over the past few years relative to second-time buyers, who typically have larger budgets as they can tap the proceeds of their first homes.

In 2020, about half of EC buyers were first-timers. This proportion dropped to between 30 per cent and 40 per cent in 2024 and 2025, he said.

The median price of new EC units has risen by 120 per cent over the past decade, to $1,754 per sq ft (psf) in 2025 from $797 psf in 2015.

In comparison, median overall HDB resale flat prices grew 51 per cent to $604 psf in 2025, from $400 psf in 2015.

New EC units have been snapped up by home buyers in recent years. The latest such project – Rivelle Tampines, a 572-unit development in Tampines Street 95 – sold 92.5 per cent of its units over its launch weekend in March.

Mr Chee said the EC scheme should focus on “meeting home occupation needs”.

In 2021 to 2025, about 75 per cent of ECs were sold by owners between their fifth and 10th year of owning the unit – that is, within five years of it hitting its MOP.

This was up from 45 per cent in the preceding five-year period.

At present, EC owners have to meet a five-year MOP before they can sell their properties to Singaporeans and permanent residents. They cannot rent out their whole unit or buy another residential property during this period.

After 10 years, when the EC is fully privatised, they can sell or rent their units to foreigners.

The policy change means buyers of new ECs will need to fulfil a 10-year MOP before reaching the first milestone. They can sell their units to any buyer after the 15th year.

Resale buyers of these ECs will not be subject to an MOP.

No more deferred payment

The scrapping of the deferred payment scheme will encourage buyers to be financially prudent, said Mr Chee.

Buyers who opt for this scheme generally pay about 2 per cent to 3 per cent more than the unit’s purchase price, he added. However, they will not have to make payments until much later – when the project obtains its temporary occupation permit.

With the removal of this scheme, all buyers will have to use the normal payment scheme – after the initial down payment, they make progressive payments as construction milestones for the project are met.

Mr Mark Yip, chief executive of real estate agency Huttons Asia, said this could dampen demand from HDB upgraders who have an outstanding loan, as the loan for their EC unit would commence while they are still servicing the loan for their flat.

Most HDB upgraders would opt for the deferred payment scheme to avoid this overlap, he added.

In the last two EC launches – Rivelle Tampines and Coastal Cabana in Pasir Ris – more than 75 per cent of buyers opted for the deferred payment scheme, he noted.

Priority for first-time buyers

Mr Chee also said the proportion of EC units set aside for first-time buyers at launch will be raised to 90 per cent from the current 70 per cent.

At present, such units are reserved for first-time buyers for the first month after the project’s launch. After this period, any remaining units can be sold to all eligible buyers.

Mr Chee said this priority period will be extended to two years, so first-time buyers have a better chance of securing EC units.

“We also hope this will result in developers reducing their land bids and the prices for their ECs.”

This is because housing developers are subject to an additional buyer’s stamp duty of 40 per cent on the land price, but can get a remission of 35 per cent if they sell all units within five years of buying the land. This can be extended to six years if the project is eligible.

However, they must wait at least 15 months after buying the land parcel before they launch the EC for sale. This means EC units can be sold to all buyers, including second-timers, only after three years and three months.

Given that developers might take a longer time to sell out an EC project, this could lead to fewer developers participating in government land sales tenders, Mr Yip said.

Developers are also likely to bid lower, which could result in lower prices for buyers, he added.

Professor Sing Tien Foo, provost’s chair professor of real estate at NUS Business School, said that as a whole, these measures could make ECs more affordable and accessible to first-time buyers.

This is because developers will also need to account for resale restrictions such as the 10-year MOP, and become more conservative in their bids for sites, he said.

PropNex CEO Kelvin Fong said that demand could be strong for five upcoming EC launches, which will not be affected by the new measures as tenders for these plots have already closed.

These are located in Senja Close, Woodlands Drive 17, Sembawang Road and Miltonia Close.