IMPACT OF EXECUTIVE CONDOMINIUM SCHEME ON THE POTENTIAL DEMAND FOR NON-LANDED PRIVATE RESIDENTIAL PROPERTIES

Abstract

Various housing schemes have been adopted by the Singapore government to suit the higher aspirations and stronger purchasing power of Singaporeans. The Executive Condominium scheme, first announced on August 1995, is the latest way to fulfill the aspirations of Singaporeans to own private properties. The "quasi-private" executive condominiums are comparable to private condominiums in terms of design elements, facilities and finishes. The "substitutability" between these two housing sectors implies that there will be an impact of the executive condominiums on private housing market (especially private condominiums and apartments which are the nearest substitutes). Therefore, the aim of this study is to examine how executive condominiums can possibly affect the potential demand for non-landed private residential properties, both in the near future and in the longer term. Results from the study show that majority of the executive condominium applicants are upgraders (i.e. 52%) who are aged between 41 and 50. These people are mostly living in 4-room or 5-room HDB flats and have monthly household income of$8000 and below. The study found out that most of the applicants (i.e. 88% of the 130 applicants) expressed the intention to re-apply for another executive condominium project if their current application is not successful. It shows that there is a permanent demand for executive condominiums and the non-landed private housing market may be affected in the immediate future. The findings also indicate that about half of the applicants (i.e. 52% of the 130 applicants) expressed the intention to re-sell their executive condominiums and upgrade to private properties ultimately. Most of them will do so when they are able to afford private properties. The findings therefore imply that there is still a substantial group of executive condominium buyers who want to own private properties eventually. The executive condominiums will thus serve as an entry point to the private housing market (especially the low-end 99 years condominiums). The executive condominium scheme is therefore also likely to have an impact on the potential demand for non-landed private residential properties in the future.