At a glance
Executive Condominiums (ECs) in Singapore present a more affordable housing option than private condominiums, mainly because of their locations and government subsidies. However, affordability extends beyond the purchase price; potential buyers, especially singles who face restrictions on purchasing new ECs, must also consider other costs. The availability of fewer housing grants for ECs compared to HDB flats is another factor. Buyers must assess their financial health comprehensively, including income, loan eligibility, ongoing expenses, and long-term commitments, before purchasing an EC to ensure it is a sustainable investment without compromising other financial goals.
For those yearning for a modern apartment equipped with amenities like a gym or a pool without forking the exorbitant costs of private residences, executive condominiums (ECs) present an ideal option.
ECs stand out as a haven offering balance and a reprieve from the relentless pace of life in Singapore, making them a coveted residential choice.
Ready to call an EC your home? Here’s the comprehensive guide you need to ensure you make a decision that’s both informed and astute.
Understanding what is an executive condo
Executive condominiums strike a unique balance, offering a public-private housing hybrid of HDB flats and private condominiums. These apartments are a sought-after option for the “sandwich class”- those who earn too much to qualify for HDB flats yet are priced out of private condominium markets.
ECs are fashioned by private developers with all the trappings expected of private condos but at more affordable prices due to government subsidies and grants. Many people mistake executive condos for their more expensive private property counterparts.
What’s unique about ECs is that after a decade, their status transforms from public to private housing.
For HDB BTO flats, the current monthly income ceiling stands at $14,000. For ECs, it’s $16,000. This bracket allows those who earn between two thresholds to consider EC or private condos as viable housing options.
Executive condos versus private condominiums.
Initially treated as public housing under HDB’s purview for a decade, ECs are subject to specific regulations for the first ten years. They can only be sold to Singapore citizens or permanent residents from the 6th year onwards. Post the 10-year mark., they become fully private. Therefore, homeowners can sell or rent them to a broader market, including foreigners.
ECs boast amenities similar to conventional condominiums but at significantly lower price points. However, the CPF housing grants become inapplicable once the EC is classified as private property after the 11th year.
So, if you have decided to buy an executive condominium, you need to decide if you want a new EC or a resale flat. Let’s see the difference:
|New Executive Condo (EC)
|Resale Executive Condo (EC)
|More recently launched projects, tighter rules on who can buy
|Completed projects, less restrictions on buyers
|Takes approximately 2-3 years for project completion
|Faster move in time
|5 year Minimum Occupation Period before can sell
|Typically no Minimum Occupation Period requirement
|Full privatization estimated in 10 years
|Nearer to private property status
|CPF housing grants permitted
|No CPF housing grants
|Progressive payment scheme, smaller initial down payment
|Minimum 25% down payment required
Purchasing an EC in Singapore
The first thing to note is that you cannot use an HDB loan to finance your executive condominium. You will need to opt for a bank loan. Although bank loans may start with lower interest rates, they demand a higher down payment – 25% with at least 5% in cash – since the maximum loan-to-value ratio is 75%, compared to HDB’s 90%.
Potential buyers must have an income that not only falls under the $16,000 ceiling but also have sufficient cash or CPF savings for the down payment. The Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing ratio (MSR), which cap the portion of income that can go towards servicing loan repayments, are also crucial considerations.
Other additional costs to prepare include legal fees (approximately $2000), valuation fees (up to $200), and the Buyer Stamp Duty (BSD), which is a percentage of the property price, increasing for properties priced above $1 million.
For new ECs, CPF housing grants can significantly offset costs, but eligibility is capped at $16,000 monthly income.
75% is the maximum amount (Loan to value limit) a person can borrow. So, do consider any existing loans that you may have. When you take out a loan, the bank considers your Total Debt Servicing Ratio (TSDR). This is the total amount from your gross monthly income to pay your debts. There is also the Mortgage Servicing Limit (MSR), which indicates that people can only use up to 30% of their monthly income for their home loan. So, both the TSDR and MSR must be considered.
Criteria for EC eligibility
Here is HDB’s eligibility condition to purchase an EC:
- The applicant has to qualify under these schemes to buy an EC:
- Public Scheme
- Fiance/Fiancee scheme
- Joint Singles scheme
- Orphans scheme
- The applicant has to be 21 years or older. If you purchase with your partner, the co-applicant should be an SC or SPR.
- Single applicants can only buy a resale EC and must be 35 years and older.
- The applicant’s household cannot earn a combined gross monthly income of more than $16,000.
- The applicant cannot own or dispose of any other property in Singapore or overseas within the last 30 months of applying for an EC.
- The applicant has not bought an EC, HDB or DBSS flat and has not received a housing grant before applying to buy an EC.
Additionally, there is a five year minimum occupation period (MOP) of 5 years before the house owner can sell or rent their flat.
EC Income eligibility
To calculate what you need for a 3-bedroom Executive Condo (EC) in Singapore, let’s break down the costs and requirements.
Step 1: Calculate the down payment and loan quantum
Assuming the price of the EC is between $800,00 and $1.2 million, let’s calculate the down payment and loan for the highest and lowest point of the range:
|Executive Condo Price
Step 2: Monthly mortgage payments
To estimate the monthly mortgage payments, we need to consider the loan tenure and the interest rate. Let’s assume a loan tenure of 25 years (typical in Singapore for housing loans) and a conservative interest rate of 1.6% per annum.
|Executive Condo Price
|$2,428 per month
|$3,642 per month
Step 3: Income calculation with the additional MSR rule (within a five-year MOP period)
Your monthly home loan repayments should not exceed 30% of your gross monthly income, according to the Mortgage Servicing Ratio.
|Executive Condo Price
|$2,428 per month
|$8,093 per month
|$3,642 per month
|$12,140 per month
Do note that if you already have an HDB flat and want to upgrade to a condo, you need to take the HDB resale levy into account. This is payable by homeowners who bought a subsidized property, e.g. a BTO, resold it, and later bought another subsidized flat, e.g. an EC. The amount will depend on your previous apartment. Here’s a comparison of the resale levy by housing type:
|1st Subsidized Housing Type
|Resale Levy Amount (Households)
*Table: Resale Levy
Is Investing in an EC a Wise Decision?
Choosing a home in Singapore, whether a BTO, a resale flat, or an EC, hinges on your personal financial goals and your investment strategy in the real estate market.
Under the HDB’s Minimum Occupation Period (MOP) guidelines, owners must occupy their new EC for five years before they can sell or lease the entire unit. After reaching the MOP, the EC can be sold or rented out at a profit, extending eligibility to Singapore Citizens and Permanent Residents (PRs).
ECs tend to appreciate over time. After ten years, an EC is fully privatized, broadening the potential buyer pool to include foreigners, as foreign nationals are permitted to purchase executive condominiums in Singapore once they are privatized.
Buying an EC typically means acquiring a property at a subsidized rate, thanks to HDB policies. This initial lower investment might translate to a significant potential for capital appreciation once the EC transitions to a private property status.
However, when considering an EC as an investment, it’s important to weigh both the advantages and the possible drawbacks. Here are some points to ponder:
|More affordable than private condos
|Bound by HDB rules for a decade
|Qualify for CPF housing grants
|Often in far-flung areas
|Fully privatized after 10 years
|Can't get HDB home loans
|Good for middle-income local families
|Limited number launched yearly
|Income ceiling of $16,000
CPF Housing Grants available for ECs
CPF Housing Grants are different from those available for HDB resale flats. EC buyers typically do not have access to the same range of grants due to the nature of ECs being a hybrid type of housing—a cross between public and private housing. Those interested in resale ECs will not get any housing grants, and these resale flats are also more expensive than new ECs.
The grants available for EC buyers are primarily aimed at first-time purchasers who have not previously owned any property or received housing subsidies. There are two key CPF Housing Grants available for eligible first-time EC buyers:
This grant is available to first-time applicants who are married couples or families. The amount for the Family Grant can vary based on income levels and the number of applicants.
|Average Monthly Gross Income of Applicants/Occupiers
|Singaporean/Permanent Resident household
|$10,000 or lower
|$10,000 to $11,000
|$11,000 to $12,000
|$12,000 to $16,000
If you are applying for an EC with a spouse or fiancé(e) who has previously received a housing subsidy, you may be eligible for the Half-Housing Grant.
As the name suggests, the Half-Housing Grant provides half the amount of what a couple applying for the Family Grant for the first time would receive.
|Average monthly gross income of applicants/occupiers
|$10,000 or lower
|$10,000 to $11,000
|$11,000 to $12,000
|$12,000 to $16,000
Comparing private condo and ECs
Executive Condominiums (ECs) in Singapore offer a unique value proposition that sits between public and private housing, and indeed, they are priced more attractively compared to private condominiums, generally by about 20% to 30%. This price difference can be attributed primarily to two factors:
ECs are typically situated in non-mature estates or in the OCR (Outside Central Region), which are areas further away from the city centre. These locations may be less developed with fewer amenities than more established residential areas, which often means they are less accessible and might be some distance away from conveniences like malls and MRT stations.
The perceived lower desirability of these locations is reflected in the lower price of ECs.
- Subsidized Land Prices
The Singapore government provides subsidies for the land designated for EC developments, which helps to keep the prices lower than those of private condos. These subsidies are part of the government’s effort to make quality housing more affordable for the middle-income group who can afford more than an HDB flat. Still, they might find private condominiums beyond their reach.
The government’s involvement in the planning and pricing of ECs enables these subsidies to be passed on to buyers, resulting in a lower purchase price.
Due to these factors, ECs can be particularly appealing for eligible buyers looking to balance affordability and lifestyle amenities typically associated with private condominiums. They also represent a step up for those looking to upgrade from public housing but are not yet ready or able to afford the full prices of private property in Singapore. The trade-off for the lower price usually comes in location and the waiting time for the EC to be completed and ready for occupation.
|Executive Condominiums (EC)
|Private after 10-years
|Capped at 99-year lease
|9/999-year lease or freehold
|20-30% more affordable than private condominiums
|More expensive versus Executive Condominiums
|Who can buy it?
|Only for Singaporean family units, couples or Singaporean & PR families
|Available to all
|5 year wait period
|Below $16,000 household salary
|No household income limit
|CPF Housing Grants
|Qualify under certain conditions
|Bank financing only; meet MSR & TDSR (before 10-year mark)
|Bank loans only, must meet TDSR
|Often in peripheral or suburban zones
|Mainly close to MRT stations
Other frequently asked questions about ECs
Here are some questions that home buyers ask about ECs:
1. Can singles buy ECs on their own?
- No, singles cannot buy new ECs. They must be part of a family nucleus or join with another single under the Joint Singles Scheme if they are at least 35 years old.
- Singles can buy resale ECs but cannot take any housing grants.
- The Minimum Occupation Period (MOP) of 5 years applies to new ECs before they are sold on the open market.
2. How much do you pay upfront for an EC?
For resale ECs:
- You need a minimum down payment of 25%.
- 5% must be paid in cash
- The remaining 20% can be from CPF savings or a combination of CPF and cash.
For new ECs under construction:
- A 5% cash payment is required when booking the property.
- An additional 15% is payable after typically nine weeks, which can come from CPF savings or a combination of CPF and cash.
3. Can I buy a new EC if I currently own an HDB flat?
You are eligible to purchase a new EC if you have only bought one property previously, which can be either:
- An HDB flat (BTO flat)
- An EC/DBSS flat from a developer or
- A resale HDB flat with the use of a CPF housing grant
You cannot purchase an EC if you have already bought two of the above property types.
Current HDB flat owners must ensure they meet the eligibility criteria and have fulfilled the MOP before applying for a new EC.
Do note property rules and regulations can change, so do check the latest updates from the Housing and Development Board(HDB) or seek advice from a professional before making any decision.
So, should you buy an EC in Singapore?
Determining if you can afford an Executive Condominium (EC) in Singapore involves a holistic look at your finances, not just income but also other financial obligations and future expenses associated with owning an EC.
Here are the main financial considerations:
Income and Loan Eligibility:
Your monthly income and financial obligations will dictate the maximum loan amount you can secure. This, combined with the down payment, will determine if the EC’s price is within your budget.
Costs for renovation can vary greatly depending on the extent of work needed and the quality of materials chosen. Some ECs come with quality finishes that require minimal renovation.
ECs come with various facilities, and the maintenance fees will depend on the number and type of amenities provided. You should factor in these recurring costs when budgeting for an EC.
The Annual Value (AV) of the property is used to calculate property taxes, which are higher for properties with a higher AV. Since ECs often have a higher AV than HDB flats, expect higher property taxes.
Potential Rental Income:
Consider the potential rental income if you plan to rent out the EC after fulfilling the Minimum Occupation Period (MOP). This can help offset some costs but remember to factor in periods when the property is not rented.
The CPF Housing Grants available for ECs are less generous than those for resale HDB flats, so your initial costs might be higher without these subsidies.
Long-term financial planning is essential. Consider other future expenses such as education for children, healthcare, retirement savings, and any other long-term financial goals.
Buying an EC can be a solid investment and an upgrade from public housing for eligible buyers, but it’s important to consider current and future financial capabilities.
If you’re eligible and find that an EC is within your financial means, it’s often a good choice before considering private properties, mainly because of the initial lower cost and potential for appreciation in value. However, it’s crucial to approach this decision with a long-term perspective and not to over-leverage financially just to purchase a more expensive home. The goal is to enjoy your home without it becoming a financial burden.