Commentary

Is The $16k EC Income Ceiling Too Low? A Look At How New EC Prices Have Risen And Why It Should Be Raised

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Ryan J

A seasoned content strategist with over 17 years in the real estate and financial journalism sectors, Ryan has built a reputation for transforming complex industry jargon into accessible knowledge. With a track record of writing and editing for leading financial platforms and publications, Ryan’s expertise has been recognised across various media outlets. His role as a former content editor for 99.co and a co-host for CNA 938’s Open House programme underscores his commitment to providing valuable insights into the property market.

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Kent
Kent
11 months ago

Raising income ceiling or any relaxation of loan rules just allows the developers to price the ECs higher. It does absolutely nothing for the buyers. The article seems to be coming more from the developer’s point of view, ending with a veiled threat to the government.

Ben
Ben
11 months ago
Reply to  Kent

Considering the income ceiling’s high level and the substantial buyer pool in comparison to the available executive condominiums (ECs), it’s worth examining the challenges faced by most potential buyers who might not reach the income ceiling. Factors like rising interest rates and inflation would require significant effort to pay off, raising concerns about the author’s assumption that couples’ income equals the income ceiling. In reality, this assumption might not hold true for many buyers.

Saywai
Saywai
11 months ago

Even at the current income ceiling, EC showrooms are packed. Why would the gov increase it and fuel the property market even further?

Stacked Homes
Admin
11 months ago
Reply to  Saywai

That’s one argument not to increase the ceiling. An income ceiling is supposed to provide a cap at how much a developer can price an EC and also define a segment of buyers that qualifies for subsidised housing, but it seems buyers have been able to pay. This results in an even greater segmentation of buyers here – those who either do really well in saving up, or those born in well-to-do families who can support them. Imagine having the cash to make hefty downpayments for your home, yet still being able to benefit the lower price due to subsidies.

Stacked Homes
Admin
11 months ago
Reply to  Saywai

It’s a lot more complicated than it is given how nuanced the market is. Imagine without an increase in the ceiling – buyers who don’t have the downpayment necessary but bust the ceiling would go to the resale market instead. They would compete in the HDB market with buyers who earn a lot less. Raising the ceiling would allow these buyers to qualify and allows them to compete in a market that doesn’t influence HDB prices as much.

Ben
Ben
11 months ago
Reply to  Saywai

Considering the income ceiling’s high level and the substantial buyer pool in comparison to the available executive condominiums (ECs), it’s worth examining the challenges faced by most potential buyers who might not reach the income ceiling. Factors like rising interest rates and inflation would require significant effort to pay off, raising concerns about the author’s assumption that couples’ income equals the income ceiling. In reality, this assumption might not hold true for many buyers.

Kkkk
Kkkk
11 months ago

How can 16k cap be low when ECs after ECs have no problem selling more than half on launch day (would be higher if there is no 30% cap for second timers). Just look at Altura that launched today, most stacks sold mid floors to top floors, while low floors unsold. This shows that people can definitely afford paying higher psf and ECs have no problems selling.

Stacked Homes
Admin
11 months ago
Reply to  Kkkk

One concern we have is just how equitable this income ceiling is. Given where it is today, buyers who have the cash from either many years of savings or help from parents can afford to buy. Those who don’t have much savings or parental help but bust the ceiling would compete in the resale HDB market. This is a segment where affordability is a very sensitive issue, and the spillover of the sandwiched class into the HDB market may not bode well for most of us. Raising the ceiling would help shift them away from the resale HDB market.

Ben
Ben
11 months ago

Considering the income ceiling’s high level and the substantial buyer pool in comparison to the available executive condominiums (ECs), it’s worth examining the challenges faced by most potential buyers who might not reach the income ceiling. Factors like rising interest rates and inflation would require significant effort to pay off, raising concerns about the author’s assumption that couples’ income equals the income ceiling. In reality, this assumption might not hold true for many buyers.

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