SINGAPORE — A few months after some super-sized Executive Condominium (EC) units were sold at eye-catching prices, sparking a public debate on whether the EC scheme was being abused, National Development Minister Khaw Boon Wan has signalled that the scheme will be tweaked.

Speaking on Thursday evening to participants at an Our Singapore Conversation (OSC) session focused on housing, he said that “something is wrong somewhere” with the scheme. “We cannot carry on the ECs with these current rules,” he said.

The scheme is one of the areas that the OSC sessions on housing would be discussing, Mr Khaw said.

He noted that under the current property market conditions, there is a “substantial gap” in the subsidies that EC buyers receive from the Government compared to the subsidies for those who buy HDB flats.

Referring to the qualifying income ceiling for ECs, Mr Khaw said: “Hence, there is a sense of inequity here. The lower-income groups are getting less subsidies than somebody who is earning S$12,000. So, something is wrong somewhere. Therefore, we cannot carry on the ECs with these current rules.”

Between December last year and January, the sales of some super-sized ECs, including one which breached the S$2-million mark, made headlines, prompting the Government to implement several measures such as capping the maximum size of EC units at 160 sq m.

During a Parliamentary debate in January, in response to calls from several Members of Parliament to scrap the scheme, Mr Khaw defended the “very good” scheme as relevant as it “protects middle-income Singaporeans from competition” while ensuring “a market-friendly way of allowing them to buy condominiums at very affordable prices”.

He had added: “If I can give you an analogy, it’s like offering you a Lexus at the price of a Corolla, but only Singaporeans have this privilege ... And they know, in due course, the price will go up above the level of a Lexus.”

Nevertheless, he said the Ministry of National Development would stay vigilant to any abuse of the scheme and would move to further address the issue if the abuse persists.

On Mr Khaw’s latest comments, Bishan-Toa Payoh GRC MP Hri Kumar Nair, who wants the EC scheme to be scrapped, said he did not think that there was a shift in the minister’s position on the issue. He said: “I would not describe it as a change as I recall that (Mr Khaw) did acknowledge the issue and said that he was reviewing it.”

Nevertheless, Chua Chu Kang GRC MP Zaqy Mohamad felt that Mr Khaw could now turn his attention to tweaking the EC scheme as the supply of Built-To-Order flats for first-timers has “mostly been sorted out”.

A recent report by real estate consultancy Jones Lang Lasalle found that resale prices of ECs are rising in tandem with — and in some cases, even surpassing — prices of similar private condominiums.

For example, the median price of The Dew — an EC in Bukit Batok — increased by 31.6 per cent between end-2010 to the first quarter of this year, compared to an increase of 27.2 per cent at Guilin View, a private condo in the same vicinity.

Mr Hri Kumar reiterated that, under the EC scheme, Government subsidies are “going to those who are not intended to benefit from them” and that the HDB should go back to its fundamentals of providing quality public housing to Singaporeans.

He added that the private-public arrangement of ECs are confusing for buyers who “are subjected to HDB rules in some aspects, but free-market rules in others”.

He said: “I understand the HDB wants to meet the aspirations of Singaporeans who want to upgrade from public housing. That is a noble cause. But we need to settle and agree on the fundamental principles first so that the HDB’s mission remains clear to everyone.”

While Mr Zaqy agreed the scheme should be tweaked, he also urged Mr Khaw to “spare a thought” for the sandwich class who do not qualify for BTO flats but whose financial commitments could price them out of buying private condos.

Some property analysts felt that the Government should not tweak the EC scheme further.

Noting that the authorities had already introduced measures recently, SLP International Head of Research and Consultancy Nicholas Mak said: “It’s almost like saying that children of millionaires are not allowed to go to government-funded school. Where do you draw the line?”

DWG Senior Manager for Training, Research and Consultancy Lee Sze Teck said the “positive aspects” of the EC scheme “still outweighs the negative aspects”.

But Chris International Director Chris Koh felt changes are needed. He suggested having guidelines for developers to introduce “no-frills” ECs which are more affordable. He said: “If you add waterfalls, that costs money, for example. So keep it simple ... and prices will not go up so high.”