Your search results

Discover 5 Reasons Executive Condominiums Could Prove To Be A Smart Investment Despite Growing Inflation

Posted by Jayson Ang on January 22, 2023

| 0

TLDR

An overview of the article discussing the benefits of Executive Condominiums (ECs) over private condos in the current real estate market, focusing on affordability, less impact from cooling measures, potential appreciation rates, post-MOP attractiveness, and improved accessibility. It also advises on thorough financial analysis and considering family needs when making property investment decisions.

In the last few years, inflation has seen a steady incline; the property market has been most affected, with prices escalating to never-before seen heights. HDB resale prices have been steadily on the rise for the past 23 months, and areas such as Woodlands and Pasir Ris have even seen their first million-dollar flats.

The government has taken steps to battle the climbing property prices, introducing the Prime Location Housing (PLH) model, amongst other policies and criteria. As such, potential buyers must stay alert when selecting their potential home.

Considering this, if you are mulling over the possibility of buying a second residence or upgrading your home, is an EC a better option than a private condo?

Discover How Executive Condominiums (EC) Could Be A Savvy Investment Choice Amidst The High Inflation And Soaring Property Prices

Here are five reasons why an EC may be the better choice.

1. In Comparison To Private Property, They Remain A More Affordable Option

Although inflation and prices in the real estate industry have been increasing, Executive Condominiums (ECs) remain an economical option, often costing up to 20% less than private condominiums. Not only that, but if you choose to buy an EC, you can qualify for government subsidies which can further reduce the cost of your purchase.

If you and your spouse are both Singaporean Citizens and your combined monthly household income is S$10,000 or less, you can get up to S$30,000 through the Family Grant for ECs. Even if one of you is a second-time applicant, you’ll still be eligible for the Half-Housing Grant of S$15,000 with the same household income.

Housing Grant

Given the current state of inflation, which is eroding homebuyers’ buying power, opting for an EC may be the wiser choice when compared to a condo.

2. The Cooling Measures Have Less Of An Effect On EC

In December 2021, the government imposed new cooling measures to combat the ever-rising cost of real estate, including an increased Additional Buyer’s Stamp Duty (ABSD), a stricter Total Debt Servicing Ratio (TDSR) and a reduced Loan To Value (LTV) limit. Fortunately, Executive Condominiums (ECs) have been largely unaffected by the higher ABSD – and here’s why.

If a homebuyer upgrades to a condo, they will be subject to a 17% Additional Buyer’s Stamp Duty (ABSD) on their second property, as opposed to the 12% levied when purchasing a unit before disposing of their HDB flat. Fortunately, CPF reimbursement and ABSD remission are available should they sell their HDB flat within six months, but the stamp duty will need to be paid upfront.

If you opt for a new launch condo, you may be able to take advantage of deducting the ABSD from your CPF rather than shelling out a huge sum in cash. Although it will temporarily use up your CPF funds, the ABSD can still be a significant amount.

On the other hand, an Executive Condominium (EC) does not require an ABSD, but you must sell your existing flat within six months. This makes an EC the more budget-friendly option as it allows you to funnel the money you’d use for the ABSD towards the purchase price.

3. It Is Said That They Appreciate More Rapidly Than Condos Do

It is often said that ECs can appreciate faster than condos due to their lower initial prices and government subsidies that give them potential for growth. However, this is not always the case; it truly depends on the development in question.

Private condos have been known to outperform ECs, and vice versa, making it impossible to guarantee a certain outcome. If you’re looking to turn a profit, it’s key to consider your purchase price, sale price, and the timing of the market.

Despite initial price discrepancies between ECs and private condos, the gap narrows over time, dropping from an average 20% to 9% and 5%, respectively, at the Minimum Occupancy period (MOP) and once fully privatised after the 10th year. Following this, these homes are open for purchase to Singaporeans, Permanent Residents, foreigners and private companies.

4. They Are Usually More Attractive To Buyers Post-Mop Than When Privatised

In the past, investors would opt to sell their Executive Condominiums (ECs) right upon their privatization on the 10th year after purchase. But, with the new cooling measures in effect, investors have come to recognize that a different investment strategy may be in order — holding the property until its Minimum Occupation Period (MOP) have been reached.

Due to the potential of reaching a broader pool of purchasers (including foreign entities and businesses) upon privatisation, Executive Condominiums (ECs) may be less attractive following the increase in Additional Buyer’s Stamp Duty (ABSD) to 30% for the second property and 35% for any subsequent purchases for these entities.

If they are wealthy enough to handle the increase in ABSD and not be too affected, they will be more likely to consider high-end luxury condos.

Furthermore, developers and companies that had previously bought ECs for enbloc may also be less inclined to buy due to their reduced prospects after the ABSD increase.

That is why, the best time to sell could be just after the MOP. However, owning a EC always gives you the option to sell according to market conditions.

5. Their Locations Are Now More Accessible

To create more affordable housing in the suburbs and decentralise key industries away from Singapore’s Central Business District, the Land Transport Master Plan seeks to make 80% of households live within a 10-minute walk of an MRT station by 2030.

Singapore has seen the emergence of a plethora of amenities, from shopping malls, to schools, hospitals and recreational facilities. Most notably, North Gaia, an EC launched in April 2022 in Yishun, is located just beside Khatib Bongsu Nature Park, providing a great opportunity for recreational activities.

The ease of access to such amenities implies that the demand for ECs is sure to stay on an upward trajectory in the coming years, especially when compared to the past.

Final Thoughts

Carry out an in-depth financial analysis to guarantee you are making wise decisions for the near future and can confidently stand behind your decisions.
Also take your timeline and family wishes into account, plan ahead and provide your family with a sense of security so that you can proceed with peace of mind.

If you’re curious about the prospect of relocating to private property and would like expert advice, I’m just a message away!

You May Also Like …

All Buying Tips

Should Foreign Buyers Be Deterred By the 30% ABSD?

Jayson Ang – December 7, 2022 –

TLDR Foreign buyers interested in private residential properties in Singapore is a common sight due to the country's positive reputation...

All Blog Posts Opinion

How Will Singapore’s Development Influence The Real Estate Markets In Bedok, Changi, Pasir Ris, And Tampines : 2023

Jayson Ang – April 5, 2023 –

TLDR You will find detailed insights into upcoming housing developments in the East of Singapore, specifically in areas like Bayshore,...

Mandarin Top 5

Top 5 : Greatest Challenges That Investors Face In Singapore’s Real Estate Market

Jayson Ang – December 23, 2024 –

Singapore's real estate market is a dynamic and attractive investment landscape for both local and international investors. Known for its...

Mandarin Top 5

Top 5 Key Factors that Affect Singapore’s Property Prices?

Jayson Ang – February 9, 2025 –

Singapore's property market has always been a topic of interest for both local and international investors. The city-state's real estate...

Mandarin Top 5

Top 5 : Places to Learn About Singapore’s History

Jayson Ang – February 13, 2025 –

Singapore, a bustling metropolis known for its modernity and multiculturalism, is also a treasure trove of rich history and heritage....

All Blog Posts Buying Tips

6 Essential Factors HDB Upgraders Should Be Aware Of Before Purchasing a Condo in 2023

Jayson Ang – June 12, 2023 –

TLDR When upgrading your property, consider factors like rental rates, Buyer's Stamp Duty adjustments, higher interest rates for bank loans,...

Mandarin Top 5

The Top 5 Factors to Consider When Investing in Industrial Property in Singapore – Expert Insights!

Jayson Ang – September 18, 2024 –

Singapore, a thriving hub of business and commerce in Southeast Asia, offers a robust real estate market with various investment...

Mandarin Top 5

Top 5 : Advantages of Owning a Luxury Condominium in Singapore for Long-Term Investment

Jayson Ang – February 23, 2025 –

Singapore, a thriving global city-state, has become an attractive destination for real estate investors. Among the various property types available,...

All Opinion Selling Tips

The Surprising Truths of Home Ownership: How Health Challenges Led a Homeowner to Relocate

Jayson Ang – July 29, 2025 –

When thinking about staircases, light switch locations, selling our home, and similar topics, many plan for retirement, assuming these issues...

All Buying Tips Opinion Selling Tips

Timing the Market: Lessons from Singapore’s Property Price Fluctuations

Jayson Ang – December 18, 2025 –

TLDR Singapore’s property market has seen price declines during major crises such as the 1985-1989 pre-recession, 1996-1998 Asian Financial Crisis,...

Mandarin Top 5

Top 5 Hawker Centres in Singapore for Local Food

Jayson Ang – February 24, 2024 –

Singapore, a melting pot of diverse cultures and rich culinary heritage, is home to some of the most delectable local...

All Blog Posts Buying Tips

Uncover the Secrets of Buying Older Properties – What They Won’t Tell You!

Jayson Ang – December 30, 2022 –

TLDR When considering the appeal of older properties in hipster neighborhoods in Singapore, it's crucial to understand the benefits and...

Mandarin Top 5

Top 5 Tips: Gain an Edge in the Singapore Property Market: Steps to Boost Your Investment Returns

Jayson Ang – March 26, 2025 –

The Singapore property market has always been a hotbed for investors looking to make substantial returns on their investments. As...

All Buying Tips Opinion

Should You Splash Your Cash on a Condo Despite the Sky-High PSF?

Jayson Ang – December 2, 2023 –

TLDR The blog post discusses various aspects of investing in condos in Singapore, covering topics such as leasehold versus freehold...

Mandarin Top 5

Top 5 : Benefits of Investing in Newer vs. Older Singapore Property Market Condos for International Buyers

Jayson Ang – January 4, 2025 –

Singapore's property market has always been an attractive investment option for international buyers, thanks to its stable economy, strategic location,...