The Ultimate Guide On Buying An Executive Condo In Singapore

An Executive Condo is a cross between private and public housing where you can purchase a property with amenities from luxury properties without paying a hefty price tag.

ECs cater to the needs of Singapore permanent residents or citizens who fall into the middle-income category.

In short, an Executive Condo is perfect for those who do not want to consider an expensive option, such as a private condominium.

But how are ECs different from private condominiums?

Although a private property developer develops and sells Executive Condos, these units come under government subsidy, making them cheaper than private condominiums.

In short, you can have all the facilities of a private condo like swimming pools, clubhouse, and gyms without paying a premium property price, unlike a mature and non-mature estate.

However, you will have to abide by the HDB’s eligibility guidelines, like the minimum occupancy period and the resale condo timeline.

Thankfully, these restrictions stay in effect for 10 years after you purchase an EC, which means you can sell your Executive Condo on the 11th year without any restrictions.

For instance, you can sell your Executive Condo to anyone, including a foreigner, provided he is eligible under the rules laid down by the Singapore Land Authority.

Furthermore, the 11th year also marks that your Executive Condominium becomes private property, meaning you can charge a private condo price if you want to resale your EC.

Although ECs offer various advantages, there are also disadvantages associated with them. To help you decide, we have listed the pros and cons of an Executive Condominium.

Pros

CPF housing grants

One of the most significant advantages of purchasing an Executive Condo is the ability to use CPF housing grants.

You can either get a half-housing grant or a family grant to purchase a new EC.

However, you have to ensure that you are a first-time buyer, and your gross monthly income must be under or equal to $14,000.

Additionally, first-timers can also apply an enhanced option (family grant enhanced CPF housing grant) to get more benefits on new purchases.

Furthermore, if the co-applicant has already benefitted from a housing subsidy, he or she must fulfill the housing status and citizenship guidelines to become eligible for the CPF housing grants.

Affordable than private condominiums

Since ECs come with government subsidies, they are more affordable than private condominiums.

This cheaper price tag means that you get more facilities without shelling out a premium price.

Furthermore, the ability to use CPF housing grants for ECs is an effective cost breakdown method, which further aids a buyer while purchasing an Executive Condo.

Ability to turn private

Although ECs abide by HDB housing rules, you will reap benefits once you complete the 5-year MOP.

For instance, after you complete the Minimum Occupancy Period, you can rent your property or sell it to Singapore permanent residents or citizens.

Furthermore, your Executive Condo will become private once it enters its 11th year, which means you can sell it to anyone without any special permission.

Besides, your EC’s value will also increase by the time it becomes privatized, offering more profits if you list it with a property agency under the resale ECs category.

Variety in locations

Unlike HDB flats, where you have limited options, ECs offer more choices with a wide range of locations.

This regional variety makes ECs one of the best properties for first-time buyers who don’t want an expensive option like a private condominium.

On the flip side, you will not find ECs located near MRT stations or prime locations in Singapore.

More value for owner-occupiers

ECs offer more value for owner-occupiers as middle-income Singaporeans can benefit from all the facilities and frills of a private condo without paying a hefty price.

Executive Condos generally have a 3-bedroom configuration, which is undoubtedly better than a more expensive 2-bedroom private condo.

Furthermore, ECs are typically bigger and often located in an area suited for families.

Cons

HDB rules

Unlike private properties that give you unlimited freedom from the onset, you will have to follow HDB rules and regulations for Executive Condos.

For instance, you will have to complete the 5-year MOP timeframe to rent or sell your unit or wait till the 11th year to sell it on a bigger pool.

Furthermore, you will also have to meet the other eligibility criteria like the income cap, paperwork for property ownership, and resale levy rules.

Not eligible for HDB loans

HDB housing grants or loans are not viable for ECs, which means you will have to apply for loans from financial institutions or banks to fuel your purchase.

You can borrow up to 75% of your property’s price or valuation as your maximum loan amount.

In short, you will have to pay the remaining 25% down payment with a combination of cash and CPF.

However, you will have to make a 5% (option fee) payment in cash, while you can use your CPF or cash for the down payment for the remaining 20%.

Not located in prime locations

Since ECs have lower prices than private condos, developers often select city outskirts for their projects.

As land prices are low, housing developers can offer better facilities without increasing the price.

In short, you will have to adjust to the location while buying an Executive Condominium.

Limited options

Since ECs are less lucrative for property developers, you may have limited options each year.

For instance, property developers invest more in private properties, so it might take time for ECs to become fully developed.

Furthermore, ECs are always in demand, which means you may have to wait in a queue to get your Executive Condominium.

No CPF for resale ECs

Unlike an HDB resale flat, the CPF housing grant is not available for a resale EC as it becomes privatized after completing 10 years.

In short, you will have to buy a resale EC with cash to obtain legal custody.

Although ECs and Condos share some similarities in terms of amenities and facilities, you can find a lot of differences between these properties.

Here are the differences between an EC and Condo.

Pricing

One of the most significant reasons why people prefer ECs is because of their lower prices.

For instance, you can get an EC at a lower cost than a private condo, especially if you buy a unit on the city outskirts.

On the other hand, private condos are expensive and cost several million depending on the location.

Eligibility

Since ECs come under HDB, you will have to meet various eligibility conditions like income assessment, MOP, and other requirements to buy one.

On the other hand, private condos do not have eligibility requirements, and anyone can participate in a condo sale.

Resale restrictions

After completing the MOP, you can sell your EC only to a Singapore citizen or permanent resident.

Although you can sell your Executive Condo to foreign buyers as well, you will have to wait till the 11th year to do so.

On the contrary, you can sell your private condo to anyone by yourself or by employing a professional property agent.

Property size

Since ECs are often family-oriented, you will find a larger floor area than private condos.

Although private condos also offer ample space for their occupants, they often fail to compete with Executive Condominiums in property size.

Minimum Occupancy Period

Since ECs have to abide by HDB housing rules, you have to complete the Minimum Occupancy Period of 5 years before you can sell your EC.

Furthermore, after completing the MOP, you can only sell your EC to a Singapore citizen or permanent resident.

On the other hand, private condos do not have MOPs, so selling your property is more straightforward and convenient.

Ownership

Singaporeans can purchase only two subsidized ECs, while you can buy multiple private condos.

Furthermore, ECs become privatized only after 10 years, whereas private condos do not comply with this regulation.

Additionally, you can use your CPF to fuel your private condo or flat purchase without bothering about any flat eligibility guidelines.

Since ECs come under HDB for the first 10 years, they are cheaper than private condos.

However, there are some conditions that you need to adhere to, especially when you plan for a bank loan.

ECs are different from HDB flats as you have to pay 25% of the down payment to purchase an EC, which means you will need more cash and CPF requirements.

So, evaluating the total purchase price and sticking to a realistic value will help you get better results while searching for an EC.

Meanwhile, a bank loan can fuel your purchase, provided you ensure that you procure a loan within the MAS limits.

For instance, the Monetary Authority of Singapore (MAS) has certain limitations on home loans where homeowners cannot exceed their combined monthly income by 30%.

This calculation means that your monthly cost for repaying your home loan should not exceed 30%.

Furthermore, you will also have to pay additional charges, including valuation and legal services fees for your new Executive Condominium.

Before you proceed with your property purchase, you should first chart a plan to ensure that everything runs smooth.

Here are the steps you need to follow to buy an EC in Singapore.

1. Check eligibility

ECs in Singapore have various restrictions, with one being that one of the applicants must be a Singapore citizen.

Although ECs are generally family-oriented, singles can also purchase an EC under the Joint Singles Scheme.

HDB also runs other schemes like Orphans Scheme, Public Scheme, and HDB 2-room Flexi flats scheme for different requirements.

These schemes are different from other HDB schemes like the Sale of Balance Flats (SBF) scheme.

However, if you already own a subsidized unit, you will have to complete the MOP for your previous flat.

In short, you must first check your eligibility before applying for an Executive Condominium.

2. Prepare your finances

After checking your eligibility, the second step is to organize your finances.

In short, you have to understand whether you can actually afford an EC, including other fees like property tax.

Since HDB loans are out of the question, you can approach a private bank loan and get your Approval-in-Principle.

After the bank approves your AIP, you can determine how much loan you will get.

Furthermore, you need to check your CPF funds and consider legal fees like BSD and additional resale levies if you’ve previously used the funds.

3. Choose your EC

ECs have limited options, so you must ensure that you get the best one quickly.

The best approach would be to shortlist your desired ECs, contact the developer, and gather as much information before submitting your application.

4. Submit the application

Once you’ve shortlisted your choices, you can submit your application to the developer.

Since ECs are rare than private condos, submitting your application at the earliest will increase your chances of booking a unit among other flat applications.

Once HDB approves your application, you can finalize the loan, sign the agreement, and make the payment.

In short, you should get your keys once the developer completes the unit.

An Executive Condo is a perfect property for the sandwiched class as it offers more value and convenience than private condos.

However, if you do not have any boundaries for your finances, the decision of choosing between an EC and a private condo can be challenging.

Here is a comparison table that will help you decide better.

The above table clearly indicates that both properties have their advantages and disadvantages.

So, if you don’t want to go for an expensive option, you can purchase an Executive Condominium.

On the other hand, if money is not a constraint, a private condo will allow you to reap benefits from the onset.

Singapore Executive Condo Vs HDB

Executive Condos in Singapore are under the HDB rules and regulations for the first 10 years, which means all the rules applicable for an HDB flat apply to an EC.

For instance, you have to complete a mandatory 5-year MOP period before renting or selling your EC, which is identical to the requirements laid for HDB units.

However, ECs are more luxurious than HDB flats as they come with various amenities like swimming pools and gyms.

Furthermore, cash over valuation is more evident in ECs as they become fully privatized after they enter the 11th year.

In short, if you are eligible to purchase an EC and have the necessary funds, it would be best to opt for an EC over HDB flat or cluster houses.

If you have a current HDB property, you have to ensure that the MOP period for your current property is complete.

In short, you can purchase an Executive Condo in Singapore, provided you have completed the MOP period of your existing property.

Unlike private properties that are open to everyone, you need to fulfill certain conditions to become eligible for an EC in Singapore.

Here are the eligibility criteria to buy an EC in Singapore.

• You have to be a Singapore permanent resident or citizen.
• The income of applicants must not exceed a certain limit.
• You will have to purchase the EC using one of HDB’s schemes.
• The applicant’s age should not be less than 21 years (35 years for the Joint Singles scheme).
• You have to complete the MOP period if you have an existing property.
• You must ensure that you don’t have any other property or have sold one in the past 2 and half years.
• A divorced applicant with his ex-spouse owning an existing property will have to wait for a 3-year period before purchasing a new EC.
• You must not have more than two subsidized houses.

Here are the reasons why you should consider an EC in Singapore.

• You can use your CPF housing grants to fuel the purchase.
• ECs are cheaper than private condos without compromising much on amenities.
• You can gain excellent rental benefits once you complete the MOP period.
• You can sell your EC to anyone after you complete 10 years of ownership.
• ECs are perfect for middle-income category Singaporeans.

Since ECs do not qualify for HDB loans, you will have to make your 1st home loan attempt from a bank or financial institution.