ECs are similar to private condos in many ways, yet have some distinct characteristics that set them apart. Notably, they typically feature shorter lease agreements and restrictions on reselling or renting. Furthermore, they tend to be less costly.
First-time home buyers with limited financial means who cannot afford a private condo should consider choosing a shared ownership community as an affordable housing solution, provided they meet eligibility conditions for mortgage approval.
ECs are a good choice for first-time home buyers
ECs provide affordable homes located close to amenities, and have potential capital appreciation potential. They’re a good option for first-time homebuyers who cannot afford private condos; their subsidies allow for lower sales prices than private condominiums; though this price gap has gradually closed over time.
Current estimated pricing for Executive Condos ranges between $700-$900psf, making them more cost-effective than mass-market condos. Furthermore, owners may qualify for CPF housing grants that can significantly lower mortgage fees.
ECs were designed by the government to address the needs of what’s referred to as the “sandwich class”, households with income exceeding BTO eligibility limits yet under that for private condominiums. Buyers usually need to fulfill certain criteria such as being Singapore citizens or permanent residents without owning other properties (locally or overseas) – something which might make it challenging for some first-time buyers.
They are a good investment
Many people desire the security of a home but the cost can be out of reach for struggling individuals. Executive condos provide luxurious living spaces while still being affordable enough for struggling buyers to purchase. Furthermore, these properties boast excellent resale values with substantial capital appreciation potential.
These hybrid forms of housing, constructed by private developers and sold at subsidised prices, have become increasingly popular with Singaporeans looking for upgrades from HDB flats. ECs tend to be located near social amenities and city hubs – plus, they tend to be significantly less costly than resale HDB flats.
But, if you are considering purchasing an EC, be aware that its mortgage financing rules may impose restrictions to prevent over borrowing that may lead to financial difficulty for owners of such properties. Furthermore, only five-year minimum occupation period properties can be sold after this minimum occupation period has passed.
They are a good choice for second-time home buyers
ECs offer second-time home buyers an ideal solution, as they offer a host of amenities ranging from swimming pools and clubhouses to lower prices compared to private condos. Furthermore, these residences tend to be conveniently situated near public transportation links for easier accessibility from the CBD.
Before purchasing an EC, it is vital to ascertain your bank loan eligibility in order to assess affordability. DBS MyHome Planner can be an invaluable tool in doing just this and will enable you to narrow down your options and make an informed decision.
ECs begin as public housing and are subject to HDB rules for the first 10 years, before becoming fully privatised and sold off to Singapore citizens or permanent residents who can get better returns and access government grants for buying them. Furthermore, investors may rent them out to multiple tenants making them even more appealing as investments.
They are a good choice for investors
Geylang is an attractive investment destination due to its excellent transport links and ongoing transformation, along with offering investors potential capital appreciation due to being relatively affordable area. Unfortunately, though, its reputation may deter some potential investors.
ECs offer superior value than private condos for investors, as their land prices are subsidised by the government and prices are more reasonable – plus HDB grants make ECs even more desirable as investments.
Investors must keep in mind that European Co-op regulations prohibit them from renting out their units during the initial five years after MOP registration, which may impede their ability to offset mortgage payments with rental income and should plan their finances accordingly. Furthermore, investors should anticipate having higher maintenance fees compared to private condominiums but should not let this deter them – the long-term benefits far outweigh such expenses.