New rules prioritising first-time buyers may curb exuberance in EC land bids, new launches

SINGAPORE - With executive condominium (EC) launches like Rivelle Tampines hitting a new record average price of $1,893 per sq ft (psf), concerns over the affordability of this hybrid public and private housing type are growing, particularly for first-time buyers.

Several factors have fuelled the rise in EC prices in recent years – robust demand from second-time buyers who can tap funds from selling their HDB flat, as well as higher land and development costs and growing competition for EC government land sale sites.

The median prices of new EC units have more than doubled in the past decade to $1,754 psf in 2025, from $797 psf in 2015.

This has deterred first-time buyers. The proportion of such buyers has dropped from about half in 2020 to between 30 per cent and 40 per cent in 2024 and 2025. To address this issue, National Development Minister Chee Hong Tat on May 8 announced three measures that will apply to all EC government land sales (GLS) sites with tender closing dates on or after May 8.

Property analysts said the changes could lead to developers being more conservative in bidding for EC sites, and ease competition from second-timers.

The new measures include extending the minimum occupation period (MOP) to 10 years, up from five now, to emphasise that ECs are mainly for owner-occupation rather than investment. To encourage financial prudence, developers can no longer offer the deferred payment scheme (DPS), which allows EC buyers to pay 20 per cent of the purchase price upfront, with the remaining 80 per cent deferred until the project obtains its Temporary Occupation Permit.

From May 8, the normal payment scheme, where progressive payments are made based on construction milestones, will apply to all EC buyers.

Finally, to improve the chances of first-time buyers securing ECs, developers must reserve 90 per cent of EC units for such buyers, up from 70 per cent, and extend the priority period from one month to two years.

“If the time to sell out an EC project is longer, it may reduce the urgency of developers to bid for land. That may lead to lower participation in GLS tenders and more stable land bids, which in turn will stabilise launch prices,” Huttons Asia chief executive Mark Yip said.

While developers are expected to bid more conservatively for new EC GLS sites after May 8, their bids could still be influenced by the sites’ location and surrounding amenities, said Professor Sing Tien Foo, provost’s chair professor of real estate at NUS Business School.

Raising the first-timer quota to 90 per cent means developers would need to price their EC projects to attract more first-timers who can meet the affordability threshold, as they may be financially constrained and less willing to pay higher prices, he said.

The EC scheme was rolled out in 1995 to provide a more affordable option for young couples who want to buy a private condominium but lack the means to do so. ECs are built by private developers but sold under Housing Board regulations.

But the rapid run-up in new EC prices in recent years means it can be challenging for the average buyer to get the full housing loan amount, after factoring in the $16,000 income ceiling and restrictions that cap the amount people can spend on mortgage repayments. This is unless they already have robust financial reserves or can tap into Bank of Mom and Dad.

Households that earn less than $16,000 a month would not be able to get a loan that can cover the full cost of the EC and may have to stump up about $450,000 as a down payment, according to property portal Mogul.sg.

ECs have been hugely popular as these are seen as a stepping stone by HDB upgraders to private housing, offering the amenities and lifestyle of private condominiums at subsidised costs.

Another pull factor for aspiring new EC buyers is the fact that many sellers have profited in the past 10 years, with average resale profits nearly doubling to over $658,000 per EC transaction in 2025 from $330,000 per transaction in 2015, PropNex noted. As EC prices continue rising, property analysts have suggested placing stricter resale conditions on ECs, similar to those for Prime and Plus HDB flats, where HDB imposes rules like a subsidy clawback to reduce the lottery effect of owners selling flats in attractive locations for a substantial profit upon reaching MOP.

But subjecting ECs to similar stricter resale conditions may not be entirely fair, as eligible EC buyers receive CPF housing grants of up to $30,000 for a new EC unit, depending on income and eligibility criteria. That is far less than the housing grants that buyers of HDB resale flats and BTO flats are eligible for, which can go up to $230,000 and $120,000, respectively, according to ERA Singapore.

Impact on EC land bids

Instead, the Government has introduced measures aimed at reducing demand from second-timers for new ECs, who some analysts say accounted for new projects such as Rivelle Tampines EC moving 93 per cent of its units over its launch weekend.

The market will be watching if the measures will prompt developers to make more conservative bids for future EC GLS sites, starting with two EC GLS tenders at Canberra Drive and Sembawang Drive to be launched by June. ERA Singapore chief executive Marcus Chu believes the impact of these new measures on buyer take-up rates and median new sale prices will likely be apparent in 1½ years to 2 years, when the new EC projects for sites such as Canberra Drive and Sembawang Drive are launched.

The longer two-year priority period will give first-timers more time to plan their EC purchases, said Ms Wong Siew Ying, PropNex head of research and content.

Removal of the DPS could result in buyers opting for smaller EC units or switching to other housing options that suit their budget, while the 10-year MOP could push buyers to switch to new condo launches or resale condos, she added.

Uncertainty over how the market will react to the new measures and how these will impact EC take-up rates will likely make developers more cautious in bidding for EC land. A steady pipeline of new EC land supply would also help moderate demand and keep prices stable, Ms Wong added. As to whether developers will price future new ECs lower will depend on factors including land and construction costs, demand and supply dynamics, as well as prevailing market conditions, she said.

In the meantime, there are five EC GLS sites – two at Woodlands Drive 17, and the remaining three at Senja Close, Sembawang Road and Miltonia Close, whose tenders were awarded but the projects have not been launched for sale. These will likely be launched in 2027, possibly in the first quarter, according to Huttons.

Mr Nicholas Mak, chief research officer at Mogul.sg, said some of the new projects on these five sites could be launched at close to a median price of $2,000 psf.

“By exempting these five future EC projects from the new measures, their developers are handed an unexpected bonus.”

While the new measures will not apply to these five EC projects, it will be interesting to see how developers will price them, and whether second-time buyers will throng these launches for the last chance to take advantage of the five-year MOP, deferred payment scheme and more favourable priority period.