One of the most exciting housing that’s give every home hunter a big dilemma. Executive Condominium / Executive Condo / EC is a hybrid home introduced in 1994 built by private developers but adhering to HDB guidelines. Prices are more affordable than private condo project due to its subsidy from Government and EC eligibility fulfillment. Note that buyers can also take CPF grants, which acts as a sweetener.
However, the last executive condo, La Casa in Woodlands (launched in 1994), was ceased in 2005 when the Government realised that private housing prices were declining significantly due to their attractive pricing. Executive Condos for sale resumed only in the last quarter of 2010 after overall housing market had peaked and stabilized. Ever since, EC in Singapore has become one of the most looked at developments.
Let’s take a look at the drawbacks and attraction:
All ECs are on 99-year lease; so if you are only to buy freehold housings, please move on. Unlike Private housings, only Singapore citizens (SC) or Singapore Citizens (SC) with a Singapore Permanent Resident (SPR) are eligible to buy new ECs. Average monthly HOUSEHOLD Income ceiling of $14,000, non-private property ownership during the last 30 months from application date, and must form a family nucleus to apply. See various schemes illustrated below:
Similar to HDB flats, ECs have a Minimum Occupation Period (MOP) of 5 years, during which the property cannot be sold nor subletting of the entire unit and barred from buying a private property. Once the 5-year period has lapsed, a remaining rule dictates that ECs can only be sold to Singapore citizens and Permanent Residents; only ECs that have crossed the 10-year mark are then considered as private housing and can then be sold to foreigners.
These new ECs show a smaller price differential with private housing. Therefore, after factoring in the CPF housing grants and relatively lower price tag, the capital gains to be made from ECs can be substantial ‘if’ you can hold on past the 10-year period. Though Buyers of ECs are bounded by these rulings, buyers purchasing ECs from the developer, similar to the purchase of HDB flats, are eligible for a type of CPF housing grant. Visit HDB, “CPF Housing Grant for Family EC”, for the details of the grant quantum, which is based on household income and citizenship status.
Unlike purchasing HDB, ECs cannot be financed with a HDB loan. The down payment of 5% has to be financed in cash. But since ECs from developers are usually priced at 20-30% below private condominiums, this makes it easier for young buyers to save for it. However the contradicting part is financing as ECs are governed by MSR compared to TDSR for a private property.
So if you are considering purchasing an EC, please consult the learned people to save you time and also being mis-informed.
However, if you are not eligible to purchase an executive condominium,you can find out more information on the new Seaside Residences in Siglap.