5 Tips To Spot Winning Investment Properties In Singapore
Investing in real estate is an exciting and potentially lucrative venture. In Singapore, a thriving property market attracts both local...
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 …
3 Steps to Protect Yourself from Real Estate Scams in Singapore
Lately, there has been an increase in scams related to real estate. Scammers are pretending to be real estate agents...
Read More
Should Buying A Low Lease Project Be A Viable Option?
TLDR When considering low lease projects in Singapore, it's crucial to evaluate your individual needs, financial standing, and future plans....
Read More
Find Your Dream Home: Top 5 Property Investments for Families in Singapore
As one of the most prosperous countries in the world, Singapore is an attractive destination for families looking to invest...
Read More
Top 5 Romantic Date Spots in Singapore
Singapore, known for its stunning skyline and diverse culture, is a melting pot of romantic opportunities just waiting to be...
Read More
When Should You Consider a Shorter/Longer Home Tenure?
TLDR Understanding the benefits of long-term home loans is crucial for financially conservative individuals in Singapore. Opting for a longer...
Read More
Should I Move to a Private Property?
TLDR When considering an upgrade from HDB to private property in Singapore, it's essential to understand the differences and implications....
Read More
5 Reasons Why Timing the Singapore Property Market is a Risk You Shouldn’t Take
5 Reasons Why Timing the Singapore Property Market is a Risk You Shouldn't Take Entering the Singapore property market can...
Read More
Top 5 : Potential Risks Should Be Considered When Investing Property Within Singapore’s Competitive Real Estate Markets
Singapore, a bustling financial hub in Southeast Asia, has seen its real estate market flourish over the years. The city-state's...
Read More
Discover 5 Reasons Executive Condominiums Could Prove To Be A Smart Investment Despite Growing Inflation
TLDR An overview of the article discussing the benefits of Executive Condominiums (ECs) over private condos in the current real...
Read More
What’s Needed For Singapore To Lift Those Cooling Measures?
TLDR The blog post discusses the recent relaxation of real estate restrictions in Hong Kong, contrasting with Singapore's stricter regulations....
Read More
The High Price of Picking the Wrong Property in Singapore in 2025
The Steep Price Of Making A Mistake When Buying Property In Singapore Are you yearning for a condo, but the...
Read More
Will Your HDB Flat Provide For Your Retirement?
TLDR Singapore's property market presents challenges with high prices, particularly in private housing, while public housing remains relatively more affordable....
Read More
Finding the Perfect Match: Top 20 : A Guide to Choosing the Best Property Agent in Singapore
TLDR When it comes to buying or selling real estate in Singapore, having a professional and knowledgeable property agent is...
Read More
Discover 7 Reasons to Sell and Right-Size Your Property
TLDR The increasing trend of right-sizing properties in Singapore is driven by various factors such as lifestyle changes, financial gains,...
Read More
Tips for Young Adults to Begin Saving for Their Future Home
TLDR When aiming to purchase a home, it is crucial to gain knowledge about the buying process and track your...
Read More
How to Avoid Forfeiting Your Security Deposit: A Guide to Your Rental Property
TLDR When bidding farewell to your rented property, ensure the safe return of your security deposit by: Regular Aircon Servicing:...
Read More
Top 5 Factors to Consider When Choosing a Property in Singapore
The top 5 factors to consider when choosing a property in Singapore. Whether you're a seasoned investor or a first-time...
Read More
Beware! Spot These Warning Signs Before Making a Home Purchase!
TLDR When purchasing a property in Singapore, it is crucial to thoroughly assess various aspects of the home to avoid...
Read More
Craving Dream Homes in the Urban Jungle: The Singaporean Dilemma Unveiled
TLDR The housing landscape in Singapore reflects evolving aspirations and desires, especially among the younger generation. Owning private property is...
Read More
