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What is the purpose of HDB building Executive Condos (EC)?

I was reading the news on that many executive condos remain unsold and with many of the full fledged resale condominium prices coming down, people would rather go for these full fledged condos.

I can never connect the dots.

Specifically, if the purpose of HDB is to ensure that Singaporeans can have home ownership to have a stable environment to build their family, then where does an EC stand?

Different family situations have different needs and we can understand why there needs to be 2 rooms, 2 rooms (flexible) with their limited lease for older folks, 3 rooms, 4 rooms and 5 rooms.

Before it was build to order flats, HDB build out the flat by the masses, until in late 1990s there was such an oversupply that folks was asking why do they build and build, so we have the build to order.

Flats are suppose to be subsidized, lower cost compared to the resale flats sold on market rates. This ensures that, when folks are young, when income have not matured, they can have a stable home to build their family.

I don’t think there is anything wrong with that.

Money aside, the reason why we would go for an EC is that we value our living conditions.

The HDB with how the town councils planned our town, you can find very little town in Singapore that matches the description of slums or shanty towns.

ECs are premium living conditions.

There has to be a cut off somewhere what is termed “subsidized” homes.

This year, the income cut off of those eligible for EC is lifted from $12,000 to $14,000.

Is this to cater to the higher income earners who are caught because their salaries rose too fast, and they cannot purchase a full fledged condo?

When this segment of Singaporeans have higher salary, the choices should be a 4 room or 5 room resale at better locations and if they crave for better living, they should be able to purchase a condominium after stepping up from a resale flat.

All this gets me to a point where I am confused by the role of what HDB plays and what the housing projects in HDB is trying to do.

To make the whole thing even more confusing these ECs are built by your third party developers, the same ones that build the full fledged condos.

Would love to hear some good point of views.


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Tuesday 5th of July 2016

To be honest I believe the goverment build ECs for a longer term plan rather than to make Singaporeans feel achieved. Singapore is going to achieve 6.9million people. Somehow these people have to be housed somewhere. The way to achieve that is to open immigration somewhere in the near future. Already the writings are on the wall as the governemnt develop the northern belt of Singapore by building more roads and MRT networks which all be ready around 2020. And in 2018 Seletar Airport and Changi will also have a new airport. All these require labor just like IR and they will be a huge boost to our GDP in 2018. Where will this labor come from? Where are we going to house them? The goverment could not just build BTO flats only as these foreigners do not qaulify for them even if they are granted PR unless they become citizens. The governemnt needs Singaporeans to give up their flats sometime in the future for the huge influx of new PRs etc to buy resale. The only way is to give this group of sandwich class the EC carrot to make them move out of the HDB for the upcoming immigrant surge. So why not build more condos to house the foreigners? These new PRs may not be all rich people. That is the reason. So therefore you see so many EC these days and goverment is building them like crazy.....


Tuesday 5th of July 2016

hi foreigngoing,

thanks for your perspective. I didn't think of it this way. I would have thought with the PR rules in place, they will provide the citizens a way to monetize by renting to PRs, while they move to condos. They could get construction firms who have dried up on projects to spear head it, since they have done with the old construction cycle and ready to start a new set.


Sunday 3rd of January 2016

HDB had joined in the race of profiting from building like those private land developers. 5 room HDB built at 2002 woth size of around 110 Sqm cost around $280k. However span of 10 years the same 5 room from HDB now sell almost $500k. Can we imagine 5 room HDB sell in 2024, if every 10 years it almost double. Exclude the consideration of size shrinking. Built cost had not increase much in span of 10 years. From whom angle do U look at the term subsidise?


Monday 4th of January 2016

hi lim, the cost of the hdb flats are regulated to be cheaper than the resale flat, which prices are open to market forces, but are regulated by various buying and selling restrictions. as such they can control the prices.

housing goes up over time with inflation and the growth rate have been near 7% recently but hasnt always be the case if you look at the data quantiatively (which i have not published yet)

the housing prices will not go up if it remains expensive and unaffordable. who would buy? sg and permanent resident can only buy is limited by population. and if its population the affordability is an issue. most flats are priced at less or near 5 times price to annual income for various groups. i think its affordable. not cheap but affordable.

in 2002 the starting wages are closer to $2,200/mth versus the $3,300/mth figures we been bandied about.

D Tradevestor

Sunday 3rd of January 2016

Hi K,

I think it boils down to demand where nowadays with income (not real income) increases, people are searching of a dream lifestyle of theirs. We see demand is shifting to more premium housing i.e. Condo.

To accommodate that, I guess HDB has to build a cheaper solution for them, masses need not look into GDP growth since most are forward looking counting on growth of income (might not be inflation adjusted).

Just one cent worth.


Sunday 3rd of January 2016

Hey D Tradevestor,

no worries i value the way you see it. i think i agree but its abit like your son wants something out of reach so you subsidized for him. do you think its a good idea? i think that is some love there. but i wonder if the child learns much from that.

Raymond Chiam

Sunday 3rd of January 2016

My take is that govt wants to allow the have-nots to enjoy private housing at a slightly subsidized rate. These are those that are not that rich, yet not that poor.


Sunday 3rd of January 2016

hey raymond, happy new year to you. that seem to be the consensus idea


Sunday 3rd of January 2016

Having meeting the needs for quality living (EC) at subside rate to higher income group, why is the HDB not building an alternative choice of flats , terrace house as they used to built in the 60s? With continual realeasing of unlimited supply of land , there is really no shortage of land to built houses.Pte condo vs EC , Semi-D , cluster pte properties vs HDB terrace houses. How abt that...


Sunday 3rd of January 2016

Hi Freddy, with all that, isn't things getting more confusing and the lines getting more blurry. If it is a tool to regulate runaway prices up or down, why not directly control the prices of the private housing in the first place.

Having more of these layers is good for competent and hardworking profiteers though.

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