SG Property

SG Property: In an interview on a radio talk show, National Development Minister Khaw Boon Wan hinted at a possible raising of the income cap on both ECs and HDBs.

The current household income ceiling of $12,000 for ECs was last raised from $10,000 in 2011, while BTO flats income ceiling was raised from $8,000 to $10,000 during the same period. Any changes are however likely to be announced only in August.

Meanwhile, some analysts highlighted that it would be reasonable to perhaps raise the income ceiling for ECs from $12,000 to $15,000 and for BTOs to $12,000 from $10,000.

Khaw added that the Design, Build, and Sell Scheme (DBSS), which has been suspended since 2011, will not be revived for now, as the current quality of HDBs are of similar standards to that of DBSS.

Overall, Maybank-KE views that a likely increase in income ceiling for ECs will ease the oversupply in the EC market and is positive for developers with large EC exposure. On the other hand, it is likely to reduce the pool of buyers for mass market private condominiums and is negative for developers with exposure to this market segment.

Among the major Singapore-listed developers, HK Land's subsidiary MCL Land has the largest exposure to the EC market with 1,327 units at Sol Acres in Choa Chu Kang. Sim Lian (Not Rated) is second with 1,060 units on its land banks in Sengkang and Choa Chu Kang. City Developments (Buy: TP $11.40) is third with effective stakes in 790 units for its two JV projects in Yishun.

Singapore-listed developers with large exposure to mass market private condominiums include UOL (Riverbank@Fernvale and Botanique at Bartley), Chip Eng Seng (High Park Residences), Roxy Pacific (Trilive) and Wheelock (The Panorama). Maybank-KE do not have ratings on these stocks.