Why EC?

Why do Executive Condominiums appeal to Buyers?

  • A status of achievement
  • Necessities within arms’ reach
  • Luxurious amenities to enjoy within the development
  • Greater upside for capital appreciation

Why are ECs cheaper than other Mass Market Condominiums?

  • Foreigners are not allowed to buy ECs directly from developers.
  • Income ceiling set at $16,000 and MSR of 30% set by the government. As such, EC developers are mindful of the affordability of the buyers who are eligible to purchase an EC.
  • Lower land costs (compared to mass market land sites). Prices for EC sites seem rather unaffected by the upward spiral of other private residential sites and have risen by a smaller margin. Over the past 2 year, bids have largely been range-bound between $550 and $670 psf per plot ration on average, which translates to an average selling price of between $1100 to $1400 psf (compared to $1,700 to $2,200psf for mass market condominiums new launches).
  • EC lands are mostly bidder by construction firms who are also developer. As such, there is no double layer profit between a developer n da construction firm.

Given these restrictions, ECs are typically priced at a discount compared to nearby private condos. In recent months, the demand of new ECs has, however, reached new highs, with units oversubscribed at launch.

Why are ECs Popular? A more in-depth analysis

  • Additional Buyer’s Stamp Duty (ABSD) is NOT applicable.
  • Seller’s Stamp Duty (SSD) is NOT applicable for EC as owners have to fulfill 5 years minimum occupation period (MOP).
  • Deferred payment is available. 20% down payment, 65% upon TOP and final 15% upon legal completion.
  • There is no restriction to invest in commercial/industrial property as long as there is no residential accommodation component in the commercial unit.
  • Improved design and features. EC developers are now offering more to attract buyers wishing to upgrade to a ‘subsidized’ private residential lifestyle living.
  • Great lifestyle (Enjoy the same lifestyle and facilities as other condominiums).
  • Possible CPF Housing Grant of up to $30,000 for 1st Timers. (Read more from HDB website here https://www.hdb.gov.sg/residential/buying-a-flat/executive-condominium/cpf-housing-grants)
  • Budget-friendly entry price (Lower quantum compared to mass market condominiums new launches).
  • Comparable, or better potential future capital appreciation to condominiums (more likely to be sold at a good profit after MOP).
  • Can be sold under private property status after MOP of 5 years to Singapore Citizens and PRs, and to foreigners after 10 years – hence a larger pool of potential buyers.
  • Good potential rental yield as design and facilities are similar to any private condominiums.

Next Read: Can I afford an EC?