MND, HDB and URA have just announced new cooling measures for the EC market. The deferred payment scheme (DPS) will be removed, while the minimum occupation period (MOP) will be lengthened to 10 years. Moreover, 90 per cent of units will be allocated to first-timers.  

 

Among the three policy changes, the removal of DPS is likely to have the greatest impact on the market. 

The removal of DPS is likely to have a significant impact on the market as over 50 per cent of current EC buyers take up the DPS. In some projects, the percentage of buyers taking up the DPS can reach 60 to 70 per cent.

The DPS is a popular scheme among both first-time and second-time buyers, as it allows them to make only a 20 per cent down payment and defer the remaining 80 per cent of their mortgage payments until the project receives its Temporary Occupation Permit (TOP). This arrangement is beneficial for HDB upgraders, as they can avoid servicing two loans simultaneously (their existing flat loan and the EC loan). For young buyers, the DPS enables them to delay most of the payment until after TOP, by which time, their salaries will likely have increased and are comparatively better able to service the mortgage.

The removal of DPS may be a prudent decision, given the growing trend of affluent parents paying the down payment for their children, who may still be studying or have just started their careers when the EC was purchased. This practice can be deemed speculative, as the children responsible for servicing the remaining loan may not be gainfully employed or have sufficient income after the project obtains TOP. This risk may be magnified should the economy worsen or unemployment rates rise.

Moreover, the removal of DPS will better align with the same policy applied to other property segments. For instance, the DPS was removed for the sale of uncompleted private homes, commercial and industrial properties from 26 October 2007 to instil greater financial prudence and curb excessive property speculation during periods of strong economic growth. https://www.ura.gov.sg/Corporate/Media-Room/Media-Releases/pr07-120

Consequently, the new policy changes to the EC market will further strengthen stability and foster greater financial prudence within the entire property market.  However, second-timers will face the challenge of servicing both HDB and EC loans simultaneously, which may strain some families' finances.  

The MOP will be extended to 10 years, and the rationale could be similar to imposing a 10-year MOP on Prime and Plus Flats. The lengthening of MOP to 10 years for EC reinforces the intent of subsidised private housing as a home for long-term owner-occupation rather than an investment tool.

As ECs are purchased at much lower prices than other new private properties, many EC buyers have been reaping substantial gains by selling their properties shortly after TOP.  

According to our data analysis, which involves matching URA caveat data of ECs bought and sold between 2010 and 2025, about 94.6 per cent of the 8,827 matched new sales-to-resale transactions occurred within 10 years of TOP. The majority (76.4 per cent) of transactions took place within five to seven years of TOP, which is less than two years after owners fulfilled the five-year MOP. In fact, the highest number of transactions occurred during the fifth year after TOP, with 33.1 per cent selling their units immediately upon reaching the five-year MOP, indicating that a third of buyers did not stay long-term in their EC.  

Nevertheless, lengthening the MOP may not discourage all potential buyers especially if the EC site is appealing. This has been observed at some Prime and Plus BTO flat locations that continue to draw high application rates as buyers believe the good locations justify the lengthy 10-year MOP. However, concerns may arise if the EC site is viewed as less favourable than Prime and Plus locations. Some EC buyers may feel constrained by the extended 10-year MOP, particularly if their lifestyle needs change over time and they wish to move to a home with more amenities.

 

Second-time applicants may now find it less attractive to buy an EC, as they have a lower probability of securing one. Subsequently, they may shift their buying interest to resale condos or to buy a bigger resale flat.

Besides instilling greater financial prudence and fostering the mindset that homes are for long-term ownership, the policy changes could also moderate the pace of EC price growth. This is beneficial for buyers, as prices of new ECs have risen faster than new private properties in other market segments over the past decade.

 

According to URA, the median unit price of new ECs grew faster at 134.8 per cent from S$782 psf in 2016 to S$1,836 psf in Jan-21 April 2026. This outpaced the growth in new non-landed homes, where median unit prices rose by 92.2 per cent from S$1,384 psf to S$2,659 psf over the same period. The price growth of new ECs were also faster than that of new non-landed homes in all three market segments, RCR (73.7 per cent), OCR (97.4 per cent) and CCR (38.1 per cent) over the same period.