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Why Consider Buy / Upgrade to Executive Condominium?

Updated: Jan 13

Buying EC = Buying Luxury ‘Lexus’ at ‘Corolla’ Price



Executive Condominium (EC) concept was first introduced in the year of 1996 as a public-private housing hybrid to cater to the sandwiched income group with salary ranging from S$12,000 to S$16,000 (income ceiling). ECs are designed and built to look like private condominium by private developers. Despite paying much less premium, EC owners get to enjoy similar lifestyle with condominium facilities such as 50m lap pool, jacuzzi pool, kids pool, aqua pool, tennis court, badminton court, function room, games room, BBQ pits etc. ECs are usually priced in the range of 15% to 25% cheaper than private condominiums as ECs are administered under HDB and ECs are considered subsidized house.


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There are many features and differences between HDB Loan and Bank Loan.

History of Executive Condominium


EC developers were facing oversupply of unsold units in the year 2015 - 2016 due to many new EC projects launched in the same period of time. There was large inventory of unsold EC units in the year 2016. Since then, the government stepped in to reduce the amout of land sites for bidding. While the supply of ECs has been steadily declining, demand for ECs has been increasing gradually.


In July 2017, all units were sold out on the launch day within 7 hours for Hundred Palms EC. This has clearly shown that the demand has outgrown the supply in the market and has shown that there was shortage in the year 2017 to 2019. With the subsequent new EC launches, we saw 70%-80% take up rates.


Mr Khaw Boon Wan (Minister for Transport) once said that EC scheme has given Singaporeans a chance to buy a luxury ‘Lexus’ at ‘Corolla’ Prices. Many are attracted to buy ECs because ECs tends to be priced 20% - 30% lower than private condominium.


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As First Time Home Buyer & If I'm Not Eligible for BTO ... ...


ECs are like BTOs which are highly subsidized by the government. ECs are one of the most highly sought after property. Units are often quickly snapped up due to condo communal facilities, future upside potential and its associated condo status.


Here are some of the ECs that are launched:



Buying Luxury ‘Lexus’ at ‘Corolla’ Price

If I'm HDB Upgrader ... ...


HDB owners may want to consider to upgrade to Executive Condominium upon meeting their Minimum Occupation Period (MOP). Upgrade to EC could be one of the many options they can consider if they are looking for quality lifestyle with condo facilities to enjoy. However, there are some things that HDB owners need to take note of before upgrading to a condo in Singapore.



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Knowledge 1: Not For Everyone, Only For The Selected Groups


ECs are targeted at those who have exceeded the monthly income ceiling for BTO public housing yet do not have the financial means to purchase private property.


There are more restrictions and criteria to be met before one can actually quality to purchase EC. Therefore it is commonly heard that ECs are for privileged ones. For you to be eligible to buy EC, you need to meet requirements on forming family nucleus, nationality, age and income ceiling. All buyers will be buying under 4 schemes with different family structure. If you own any property on hand, there are certain procedure to follow before you can even apply for ECs.



Furthermore, ECs buyers can enjoy CPF Housing Grant ranging from $5000 to $30000. This has made it even more affordable to own EC to enjoy different lifestyle.


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Knowledge 2: Have Condo Facilities & Features Like Private Condominium


There are some people having the thought that ECs are just apartments with security without any facilities. It could be that they mix up with Design, Build and Sell Scheme (DBSS) which was already phased out by HDB. The amenities and facilities in Executive Condominium would have provided an upgrade in lifestyle for your family and yourself. Here are some facilities that you can expect when you live in ECs.



When you get your house key upon TOP, the house would have been equipped with quality fixtures and fittings and some may come with smart home system provided by the private developers. EC owners just need to minimally touch up the home with curtains, lightings and furnitures to move in immediately.


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Option 3: Capital Appreciation After MOP


Executive Condominiums can be sold after meeting the 5-year Minimum Occupation Period (MOP) from the Temporary Occupation Permit (TOP). ECs are semi-privatized after 5 years and can be sold to Singaporeans and Permanent Residents (PRs). Capital appreciation is optimal once ECs hit the 5th year mark. 5-year-old ECs appeal a lot to buyers because there are long balance lease.


When ECs transit to become full fledged condominium after 5 to 10 years (known as privatisation), their value increases. This makes ECs a good choice for HDB owners who are thinking of upgrading to a new home, as they are buying a property that is likely to appreciate in value.


For HDB Upgraders, if you have made a decision to upgrade to EC, then congratulations to you as you are likely sitting on $200,000-$300,000 paper gain now.


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My Executive Condo is reaching MOP soon ... ...


Some EC owners might be considering just sitting on their EC and do nothing since they are very comfortable with their home and do not have the intention to extract the profit. 


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However, if you are the kind who wish to hop to even newer condominiums with better amenities at better locations, your newly MOP house is in its optimum condition to attract premium price from buyers. There are buyers who are looking to buy property without the need to wait for the long construction period. The growth in EC has created this opportunity for you to enhance your assets even further.


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jj wong

Not sure whether to sell your MOP EC and upgrade further?


If you have a plan in mind but not sure if it works well – do share with me or let me know.


I will do my best to assist you to make sure you look at your plan from multiple angles and ensure you have a very clear picture on what’s going on.


Drop me a HI! in whatsapp and share with me your top most concern in the property upgrading journey.



 

JJ Wong is the founder of MOPUpgraders.sg and has been a Property Wealth Planner in the real estate market for the past 6 years. He has helped many clients achieve their aspirations with the right financial planning and sound timeline planning. He is the man behind upgrading case studies of those who are holding on property under 10 years.

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