Know more about Singapore EC!
What is an EC?
Executive Condominiums (EC) is like a hybrid between a HDB and a Private Condominium. Means it is developed and sold by private developers, but restricted by HDB rules and requirements.
When did it started and the purpose?
Executive Condominiums (EC) were introduced in 1997 to cater to Singaporeans, especially young graduates and professionals who can afford more than an HDB flat but find private property to be out of their reach.
Why is EC cheaper?
There are different reasons, just to name a few factors:
- Only Singapore Citizens are eligible
Demand is substantially lower as foreigners are not allowed to apply
- Income Ceiling
With a combined household income not exceeding $14 000, developers have to take into accord and priced it within buyers budget range.
- Lower Land costs
Due to the limitations and developers may not be interested in bidding for it without a decent profit. Hence, Land sales to an EC are cheaper compared to sales to a Private Condominium projects, making EC selling price cheap to buyers as well. And Developer still make a decent profit as private condo.
Why buy EC?
Let us take a quick look at the many benefits of an EC
- Great design (Comparable to private condominiums or even better than some)
- Great lifestyle (Enjoy the same lifestyle and facilities as a private condominiums)
- Possible Grant! ($20 000/$30 000 for CPF Housing Grant for 1st timers)
- Affordable price! (Much lower quantum)
Eg. Comparing an EC to a private condo with similar facilities.
A Parc Centros, 3 bedrooms 1141sq ft selling at $925 psf = $1, 055 000
A Waterbay, 3 bedrooms, 1087 sq ft selling at $770 psf = $836 990
And if buyers are eligible for $30 000 CPF Housing Grant,
Nett purchase would be $806 990 or $742 psf
Difference would be $248 010 or 24% difference in purchase price
- No resale Levy for 2nd timers
- Increase in income ceiling (from previously $10 000 to $12 000 & now $14 000) – More people are eligible to buy
- Strong potential future capital appreciation (highly likely to be sold at a good profit after MOP period).
Can be sold under private property status after 5 years to SC and SPR or even to foreigners after 10 years, hence a larger pools of potential buyers to tap on in future.
- Good rental yield (with design and facilities like a private condo, rental is likely to be good as well).
In today’s market, HDB has reached an all time high, and new EC has tremendous potential in capital appreciation after 5 years. Along with the many benefits, this has resulted many people selling their existing HDB to upgrade to an EC.