Developers can continue to offer the deferred payment scheme (DPS) for executive condominiums (ECs) because eligibility and ownership rules keep speculation in such projects at bay.
The Urban Redevelopment Authority (URA) said that ECs ‘are different from other private residential developments’ as they are meant for owners to live in and are subject to eligibility criteria and ownership conditions. For instance, EC buyers must form a family unit and they have to occupy their units for five years before selling them in the open market.
In addition, the subsale of booked ECs is not allowed.
‘With these conditions, there is no need to remove DPS for ECs,’ URA said. The 2007 move was meant to ‘discourage excessive property investments in a buoyant market’.
When the DPS was cancelled in October 2007, URA had informed the Real Estate Developers’ Association of Singapore, the Law Society of Singapore and all licensed developers in writing that the withdrawal would not apply to ECs and flats under the design, build and sell scheme.
Developers which intend to offer DPS for ECs have to seek the Housing and Development Board’s approval to vary the terms in the standard sales and purchase agreement.