Are you considering to buy a New Executive Condominium? In this article, we will be walking through some of the potentials in buying a new executive condominium, or commonly known as ECs in short.
To cater for the sandwich class, government had introduced a property type, an executive condominium, which lets buyers enjoy subsidies from government whilst at the same time enjoy a condominium living lifestyle. A new executive condominium fulfils their Minimum Occupation Period (MOP) after 5 years and fully privatised after 10 years, meaning it will be considered a private condominum after which.
Awsome right?! But is it available for everyone? The answer is no. As it is a “subsidised condominium”, a new executive condominium is subjected to certain regulations and buyers must be eligible before they can purchase.
Am I Eligible to Buy a New Executive Condominium?
The next question asked, is if you are eligible? Prior to purchase, it is important to find out on your eligibility to buy new launch executive condominium before making your way to the showflat. You wouldn’t want to go through the hassle to find out that you can’t actually purchase right? Here are the EC eligibility conditions you need to know:
For couples –
- Only Singaporean nucleus or Singaporean + Permanent Resident nucleus are eligible.
- Buyers are at least 21 years of age.
- You are eligible to purchase under either the Public Scheme or the Fiance / Fiancee Scheme.
- Average gross total monthly income must not exceed $16,000.
- Buyers must not have own any property locally or overseas, or dispose of any private property within the past 30 months.
For Singles –
- Only Singaporean nucleus is eligible.
- Buyers are at least 35 years of age.
- You are eligible to purchase under either the Orphan Scheme or the Joint Singles Scheme.
- Average gross total monthly income must not exceed $16,000.
- Buyers must not have own any property locally or overseas, or dispose of any private property within the past 30 months.
For a faster and easier way to assess your eligibility, you can make use of our EC Eligibility Check form.
Advantages and Potential When You Buy a New Executive Condominium:-
Additional subsidies (if applicable)
For those who are eligible, you can enjoy up to $30,000 CPF housing grant. The grant amounts are derived from buyers’ income, nucleus as well as their purchase scheme. You may refer to the table below to have a grasp of how much grant you can get.
No ABSD is Required (For Upgraders)
For Singaporeans looking at upgrading from a HDB to a new launch or resale condominium, without yet selling your place, Additional Buyer Stamp Duty (ABSD) of 12% is still applicable and is payable 2 weeks upon the execution of the Option To Purchase or Sales & Purchase Agreement. At the point of purchase, the private property is considered as a 2nd property even though you have the plan to sell your current property later.
Although, you can apply for ABSD remission, it is still a huge amount to pay initially. Not forgetting the stress that you will be juggling with if you can’t sell your place and apply for the remission within the stipulated 6 months from:
- Date of Acceptance of the Option to purchase for Resale Private Property
- The issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC), whichever is earlier, for uncompleted property
So what if you sell your place first? Then you may face an interim period without a place to stay and the alternative options will be to either bunk in with your relatives /families or to rent a place during this transition. It is especially so if your next purchase is a new launch condominium where you may need to wait up to 4 years before key collection.
By upgrading to a new EC, these issues will solved. You will not be required to pay for ABSD even if you have not sell your current property.
However, if you are a 2nd timer who have enjoyed the subsidies before, resale levy applies.
Favourable Entry Price Point
Generally, EC prices range from about 15% to 20% lower than that of a private condominium around the same area. What does it mean for you?
With the subsidies as well as the grant (if eligible), jumping in to a condo living lifestyle is made much more affordable now!
Advantageous Pricing Position and an Optimal Buyers’ Demand
Let us look at this scenario. IF we have an EC and a private condominium launched side by side with the same percentage of price appreciation over time, which will you buy?
As a smart buyer yourself, which one will you go for if you are looking to buy a condominium around the vicinity? The answer is pretty obvious right? If both projects are similar, most of the buyers will indefinitely go for the more affordable ones. This gives EC owners a competitive edge without compromising their capital gains.
Price Appreciation
Now, let us looks at figures of how some most recent past ECs are performing.
Esparina Residences
Prive
Twin Waterfall
Tampines Trilliant
In today’s market context, together with historical data and figures, a brand new EC seems inevitably definite on their price appreciation.
Downside When Buying New Executive Condominium
Of course, to have a better chain of thought process, you may want to take the cons of getting a new EC into consideration too.
- Longer holding period before reselling in the market, at minimal a 5 years from Temporary Occupation Permit (TOP) or approximately 8 to 9 years from launch.
- Loan capacity is assessed with MSR (30%) taken into consideration. This means that total loan capacity for an EC is halve of that of a private condominium.
- Land location may not be ideal.
Final Thoughts
Ultimately, buying a new launched Executive Condominium will be more incline towards home stay purpose with an “affordable condo living lifestyle” approach capitalising on your eligibility to purchase. If you are looking at it as an investment channel, ROI may take up to 8 years depending on your point of entry. If you are looking at property investments with shorter holding period, you may like to consider resale or new launches condominium instead.
