What are executive condominium?

Executive Condominiums (ECs) are a hybrid form of Singapore property development where it is a private condo but purchaser have to follow HDB rules and regulations for the first 10 years. EC are developed and sold by private developers. A 5-year Minimum Occupation Period (MOP) of the unit prevents an EC owner from leasing or selling during that time. After the MOP period, this unit becomes privatised and can be sold back to Singaporeans or PRs as a resale unit, and an EC project is only fully privatised after 10 years – meaning that they will be open for all buyers after that. ECs were first introduced in the 1990s and the aim of EC’s is to provide housing for middle-to-high income earners, but not the very wealthy. Affordability is the key reason for buying an executive condo as they are are much cheaper than private condos because as a public-private housing hybrid, ECs are heavily subsidised by the government. There will always be robust demand for them whenever a new EC projects hits the market. Some newly launched ECs are also near to shopping malls and near MRT station.

Eligibility to buy

Executive Condos in Singapore are property that are restricted to certain households with at least one member of which is a Singaporean. These properties which are built by private developers are authorized under the EXECUTIVE CONDOMINIUM HOUSING SCHEME ACT with several EC eligibility criteria. that’s why there is a saying that EC buyers are for the privileged few as not many people are eligible to purchase them. Buying a resale EC after the 5 years MOP does not have this restrictions.

The 6 main eligibility criteria for purchaser when buying executive condo:

• Age of applicant: At least 21 years old⦁ At least 35 years old for Joint Single Scheme
• Minimum occupation Period (MOP): 5-year MOP
• Citizenship: Singapore citizen with another Singapore citizen or permanent resident (SPR). Singles applying under the Joint Singles Scheme must be a Singapore citizen.
• Family Nucleus Available: Public Scheme, Fiancé/Fiancée Scheme, Orphans Scheme, Joint Singles Scheme
• Income Ceiling: Have a gross household income of not exceeding $16,000
• Property ownership: You do not own other property overseas or locally, or have not disposed of any type of property within the last 30 months. You have not bought a new HDB/ DBSS subsidised flat, resale flat with grant or EC, or received a CPF Housing Grant before (1st-Timer); or, have only previously bought 1 of these properties/ received 1 CPF Housing Grant thus far (2nd-Timer).

Affordability of EC

If you’re looking into private property instead of public property for your next move, an executive condominium from a developer could be the perfect choice for you in 2022. With the Singapore’s housing market on the rise, new launch EC are becoming more and more of a hot topic. Today’s private property entry prices have risen significantly in recent years making it increasingly difficult for young Singaporeans or HDB upgrader to purchase a private property. As former National Development Minister Khaw Boon Wan aptly put it back in 2013 – “buying an executive condominiums in Singapore is like buying a Lexus at the price of a Corolla”. Depends on income level, Singaporeans get government subsidies of up to $30,000 just like a HDB resale unit when they purchase a EC, buying private condominiums does not have this benefit. You have to take bank loan instead of HDB loan for EC as it is not public housing compared to private housing. For 2nd timer, you also have to sell your existing flat within 6 months from your new EC TOP date.

Data showed that ECs are 39% cheaper than newly launched non-landed private homes in the Outside Central Region (OCR) than mass market condos in 2020. Even though the prices of ECs started to climb from 2017, due to higher land costs, they are still considerably more affordable than private condos. Currently, EC prices typically trend slightly above the $1,100 psf plus level.

Deferred Payment

Deferred Payment Scheme (DPS) is a special payment scheme available for all EC, this is something you will not see in the private property market. DPS enable the buyer to pay just 20% in down payment and pay the rest upon receiving Notice of Vacant Procession (TOP). This is a great help for HDB upgrader to minimise their initial outlay when purchasing EC.

The Singapore condominium dream

Many Singaporeans use ECs as an alternative to condo living in order not exhaust themselves financially and those upgrading from HDB flats do not have to pay the hefty additional buyer’s stamp duty (ABSD), when they buy an EC. Do note that resale levy is payable for EC if you have bought a new HDB/DBSS flat or EC before. Buyer may feel that purchasing an EC gives them additional investment opportunities and a greater peace of mind in the long term. They also have the opportunity to put the property up for en bloc sale when the property becomes too old or when the lease starts to run down.

You can view what are the new and available units for ECs on the market VIA THIS LINK.