Recently, National Development Minister Khaw Boon Wan remarked that there is something wrong with the present Executive Condo scheme and it cannot carry on its current form. At present, both groups of people buying BTO and Executive Condo are eligible for housing grants. For EC, a family could get from $10,000 to $30,000 grant depending on the make-up of the family nucleus. As for the BTO, a family could get up to $60,000 grant for buyers earning less than $1500 a month.
The inequality that Mr Khaw is talking about is the substantial gap between the profit from selling an Executive Condo as compared to selling a BTO years down the road. For many EC buyers, they are experiencing a hefty profit as a resale EC, at 10 years, can almost match the fair price of a private condominium in the vicinity. This state of affairs, goes against the very principle on which the schemes are built upon. HDB subsidies should be progressive, where the lower income should receive more.
To illustrate the current situation, data from the Singapore real estate exchange shows that a four-room HDB flat in Choa Chu Kang appreciates more than an Executive Condo, the Quintet, over a 7 years period. This is a 200% appreciation for the HDB flat as compared to the EC. However, when it comes to profit margin, the HDB rose from $136K to $420K, much less than the EC that rose from $478K to $905K.