The HDB is clamping down on unethical practices in the EC segment.
The HDB said developers of executive condominiums (ECs) are not allowed to offer buyers incentives if they have not booked a unit, reported The Business Times.
Developers should also engage independent auditors to look into their sale processes and make sure they fulfil their obligations.
While they may choose the mode of sale and engage marketing agents to handle the process, EC developers must comply with the Conditions of Tender and the Building Agreement in order to conduct the sale of their units transparently and fairly.
“The Ministry of National Development (MND) and the HDB take a serious view of any malpractice by developers. Any feedback on malpractice by EC developers or their marketing agents is fully investigated. The authorities will not hesitate to take action against errant parties,” said an HDB spokeswoman.
These comments follow a recent study by The Business Times of EC projects launched since 2014, which received robust e-application numbers but had poor sales. During their launch weekend, 50 percent of the 14 EC projects failed to achieve even a 20 percent conversion rate (the number of e-applicants who actually purchased a unit). Notably, 20 percent is at the lower end of what is deemed reasonable by most industry players.
Three projects were almost fully subscribed during the e-application stage, while nine others were over-subscribed. Industry players have warned of a potential oversupply of ECs in the short-term, especially for projects launched back to back within the same area. They noted that such projects end up competing for the same pool of buyers and could have overlaps in e-applicants.
However, there have been rumours of e-application numbers being exaggerated to create the impression of high demand. Some developers have allegedly offered agents cash or supermarket vouchers to incentivise e-applications. There is also word of agents signing up relatives or friends as e-applicants, and e-applications for previous ECs being used in later projects.
Under the Executive Condominium Housing Scheme (Eligibility) Regulations, an applicant refers to a person who applies to purchase an EC unit, including e-applicants.” For e-applications, there are built-in checks in the system to ensure that applicants meet the eligibility criteria,” the HDB spokeswoman said.
“While developers are in charge of managing and processing the applications, the HDB also counter-checks the income and supporting documents subsequently submitted by the buyers to verify that they meet the eligibility criteria.”
Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories, email cheryl@propertyguru.com.sg
