EC Market Reacts: Upgraders Rethink Plans as Exempt Projects Get Unexpected Boost

The scrapping of the deferred payment scheme is hitting second-time buyers hardest. Under the old arrangement, EC buyers could pay just 20% upfront and defer the remaining 80% until the project obtained its Temporary Occupation Permit, often three to four years later. This was particularly attractive to HDB upgraders who were still servicing their existing flat loan while waiting for the EC to be completed.

Without deferred payments, upgraders must now make progressive payments as construction milestones are met, effectively servicing two housing commitments simultaneously. Mark Yip, chief executive of Huttons Asia, noted this could dampen demand from HDB upgraders with outstanding loans. At the last two EC launches, Rivelle Tampines and Coastal Cabana in Pasir Ris, more than 75% of buyers had opted for the deferred payment scheme.

Brandon Koh, a 38-year-old software engineer looking to upgrade from a four-room flat in Tampines to an EC in the area, said he will have to rethink his plans. Without deferred payments, he estimated he may need to save for several more years. Andy Lu, a 49-year-old living in a four-room HDB flat in the city fringe, said the scheme removal means he can no longer afford an EC and is now considering a resale condo or centrally located resale flat instead.

Five upcoming EC projects on sites awarded before the announcement will not be subject to the new rules, and analysts say their developers have been handed an unexpected bonus. These projects at Senja Close, Woodlands Drive 17, Sembawang Road, and Miltonia Close are expected to yield about 1,970 units in total, with launches slated for the second half of 2026 to 2027.

City Developments Limited has two projects in the pipeline after clinching the Senja Close and Woodlands sites in August 2025. The Woodlands site was awarded to Sim Lian at a record S$794 psf ppr, while a Sembawang Road plot went to JBE Holdings. Hoi Hup Realty acquired the Miltonia Close parcel last month.

Nicholas Mak, chief research officer at Mogul.sg, expects some of these projects to launch close to a median price of S$2,000 psf. PropNex CEO Kelvin Fong said demand could be strong for all five, as they represent the last chance for buyers to enjoy the five-year MOP, deferred payments, and the more favourable one-month first-timer priority period.

Property analysts expect the new measures to temper developer enthusiasm at future EC land tenders. With a longer 10-year MOP and no deferred payments, developers face a smaller effective buyer pool and potentially slower sales. This reduces the urgency to bid aggressively for EC sites, which could lead to lower land prices and, in turn, more affordable launch prices.

Professor Sing Tien Foo, provost’s chair professor of real estate at NUS Business School, said raising the first-timer quota to 90% means developers will need to price their EC projects to attract buyers who may be financially constrained and less willing to pay premium prices. Huttons’ Yip added that lower participation in GLS tenders and more stable land bids should help stabilise launch prices over time.

The first two sites to come under the new rules will be a Canberra Drive plot to be released for tender in May and a Sembawang Drive site expected in June. Market watchers will be closely monitoring these tenders for early signals of how the new framework is shaping developer appetite.

The longer MOP also has implications for the EC resale market. Based on Realion’s analysis of URA data between 2010 and 2025, about 94.6% of the 8,827 matched new sale-to-resale EC transactions took place within 10 years of reaching TOP. The majority of deals, about 76%, occurred within five to seven years after TOP, or less than two years after the five-year MOP. About a third of owners sold their units immediately after reaching the MOP mark.

With the MOP now doubled to 10 years, owners of new ECs will need to hold significantly longer before they can sell. This could reduce the supply of “younger resale ECs” entering the market and potentially steer some buyers toward private condominiums instead. In 2025, there were 162 EC resale transactions where owners resold after five years, with an average holding period of 9.5 years. The biggest gain was more than S$2 million for a four-bedroom unit in The Tampines Trilliant.

On the flip side, first-time buyers are the clear winners of the policy shift. The first-timer quota jumps from 70% to 90%, and the priority window extends from one month to two years. ERA Singapore CEO Marcus Chu said the higher quota will level the playing field for first-time buyers who lack the financial advantage of second-timers who can tap capital gains from their HDB sale.

A young couple earning S$16,000 a month buying their first home would benefit from more affordable pricing if new EC launch prices moderate as expected. Under the income ceiling of S$16,000, a new 960 sq ft EC unit priced at S$1,800 psf would cost about S$1.73 million, or roughly nine times their annual income. The changes are designed to make this more achievable by bringing prices down over time through lower land bids and reduced speculative demand.