Discover the 7 Unique Attributes of Real Estate Investing
TLDR The post highlights the benefits of investing in real estate, such as high leverage, capital appreciation, income generation, usability,...
Read More
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 …
Top 5 Best Non-Touristy Things to Do in Singapore
Singapore, a vibrant city-state known for its iconic skyline and diverse culture, offers a plethora of experiences for both tourists...
Read More
5 Homeowners Share Their Biggest Regrets Delaying Their Property Purchase in Singapore
In the fast-paced and ever-evolving property market of Singapore, making a timely decision to purchase a property can make all...
Read More
Beyond Buying: Innovative Strategies for Property Investment Success
TLDR The world of property investment and real estate trends offers vast opportunities. Stay informed with effective property investment strategies...
Read More
Top 5 : Most Profitable Neighborhoods To Invest In For Singapore Property Investment 2025
As the global economy continues to recover, the real estate market in Singapore remains a promising investment opportunity for savvy...
Read More
Top 5 Places to Learn About Singapore’s History
Singapore, a thriving metropolis with a rich history and diverse cultural heritage, offers numerous opportunities for visitors and locals alike...
Read More
Travel Without Worry: The 5 Best Telco Companies For International Roaming In Singapore
Travel Without Worry: The 5 Best Telco Companies For International Roaming In Singapore When it comes to choosing a mobile...
Read More
Are We Truly Headed For A Slowdown? How Will This Affect Property Prices?
TLDR The pandemic-induced recession has surprisingly boosted property prices in Singapore, defying conventional economic trends. Factors like cost-push inflation, limited...
Read More
Top 5 : Key Reasons to Invest in Industrial Property in Singapore
Singapore, a small yet densely populated country, has emerged as a significant player in the global industrial property market. Its...
Read More
HDB Market Outlook 2023
TLDR: Understanding the HDB Market Outlook 2023 The HDB resale market showed resilience in 2022, with significant growth in sales...
Read More
The 5 Most Common Mistakes First-Time Buyers Make (And How to Avoid Them)
The 5 Most Common Mistakes First-Time Buyers Make (And How to Avoid Them) Here are the 5 most common mistakes...
Read More
Is Lentor Mansion: The 5th New Lentor Condo in 2 Years Still Worth Your Attention?
TLDR for "Exciting Updates from Lentor Mansion" Lentor Mansion, a new project in the vibrant Lentor region, is set to...
Read More
5 Things to Know About Singapore’s Urban Redevelopment and Landscape Changes
As one of the world's most densely populated cities, Singapore has undergone significant urban redevelopment over the past few decades...
Read More
I Bought a Mega-Home : Hear 7 Homeowners Spill their Heartfelt Remorse
TLDR The article discusses various challenges faced by residents living in massive condo complexes in Singapore. From long elevator wait...
Read More
The Importance of Due Diligence in Property Investing in Singapore
Investing in property can be a lucrative venture, but it also comes with its own set of risks and challenges....
Read More
Top 5 Reasons : Why Does Singapore Have Such Extensive Restrictions On Foreigners Purchasing Residential Property?
Singapore, a thriving city-state in Southeast Asia, is known for its stable political climate, strong economy, and strategic location. As...
Read More
Top 5 Vegetarian Restaurants in Singapore
Singapore, a melting pot of cultures and cuisines, offers a diverse range of dining options for food enthusiasts. For vegetarians,...
Read More
Is it Possible for the Government to Truly “Reclaim Your Home” in Singapore?
The Singaporean government possesses considerable authority to reclaim land, whether freehold or not, in accordance with the Land Acquisition Act....
Read More
Discover the Optimal Timing to Invest in Singapore Real Estate: Unveiling Historical Insights
TLDR When considering the best time to buy or sell a property in Singapore, historical data analysis reveals key insights....
Read More
Singapore Homebuyers: Finding Hidden Value in ‘Undesirable’ Property Traits
TLDR Many perceived drawbacks in Singapore’s property market—such as mortgage lock-ins, leasehold status, west-facing units, nearby construction, inefficient spaces, and...
Read More
