Executive Condo: Guide to Buying ECs in Singapore (2024)

Buying an Executive Condo (EC) in Singapore can be a great real estate investment opportunity for those looking to own a property with full condo facilities at an affordable price. ECs offer a range of benefits including potential for capital appreciation and access to various amenities. However, there are important considerations to keep in mind such as the location, developer’s track record, and financing options.

As property owners, we want to get the best investment for our long-term goals. This could be as simple as living closer to our parents or looking for a location more suitable for commuting to work.

As real estate investors, we want our properties to beat the average growth of the Singapore property market. That’s why we spend time researching and analyzing the future growth of certain areas in Singapore. Property like Sol Acres is a good example of good returns for investors where the average earnings come in more than 40% in just 5 years.

Committing to an EC isn’t a small decision either, the lowest-priced EC available in the market right now is a 1-bedder going at $780,000 (resale). With that amount, buyers could easily afford a 5-bed BTO within the OCR (Outside Central Region) and RCR (Rest of Central Region) in Singapore.

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Aaron Oon is a Senior Associate Director at Propnex and Founder of Real Estate Insider. A consistent Top Producer in the competitive world of real estate, Armed with a Finance degree from NUS, Aaron is more than just a real estate agent; he’s a strategic thinker and a creative problem solver.

If you are looking to invest in a property here in Singapore or would like to know more about Singapore’s property market. Be sure to reach out through the Calendy video link below:

Key Takeaways

• ECs offer a more affordable option compared to private condos.
• EC buyers have access to full condo facilities.
• There is potential for capital appreciation with ECs.
• Location and accessibility are important factors to consider when buying an EC.
• It is crucial to research and consider the developer’s track record before purchasing an EC.

What is an Executive Condo?

EC is a type of housing in Singapore that combines elements of public and private housing, offering a middle-ground option for certain homebuyers. For example, Lumina Grand; an EC that recently launched is selling at an estimated $1.38 million for 3 bedder while a similar size new launch private property would easily go for over $2 million.

What is the difference between a Private condo and an eC?

A question first-time homeowner typically asks: “Is EC under HDB?”

The answer: “Yes!”

EC is a unique type of housing in Singapore that blends the characteristics of public and private housing. It is designed by private developers but comes with certain restrictions similar to those of public housing during its initial years. After 5 years, known as the Minimum Occupation Period (MOP), the EC becomes privatized and can be sold to Singaporeans and Permanent Residents. After 10 years, it can be sold to foreigners, making it fully private.

Eligibility to purchase an EC is a key aspect that sets it apart from other housing types. To qualify, buyers must form a family nucleus and meet criteria such as citizenship, age, and income ceiling. Here’s a quick overview of the eligibility conditions:

• At least one applicant must be a Singapore Citizen.
• The family nucleus must include at least another Singapore Citizen or Singapore Permanent Resident.
• All applicants must be at least 21 years old (35 if applying under the Joint Singles Scheme).
• The combined household income must not exceed the prevailing income ceiling.

Tip: Before setting your heart on an EC, ensure that your family nucleus and income fall within the stipulated eligibility brackets to avoid disappointment during the application process.

Eligibility Criteria for EC Buyers

To be eligible to purchase an EC in Singapore, there are certain criteria that buyers must meet:

Requirement	Criteria
Citizenship	Buyers must be Singapore Citizens
Family Nucleus	Buyers must form a family nucleus with at least one other Singapore Citizen or Singapore Permanent Resident
Income Ceiling	The combined monthly household income of buyers must not exceed the $16,000 income ceiling
Ownership of Property	Buyers must not own any other property locally or overseas, and must not have disposed of any within the last 30 months

Tip: It is important to carefully review and understand the eligibility criteria before considering the purchase of an EC.

Benefits of Buying an EC

One of the key reasons for the affordability of ECs is the government subsidy provided to EC buyers. This subsidy helps to lower the overall cost of the EC units, making them more accessible to a wider range of buyers.

In addition to the lower purchase price, EC buyers also enjoy the same range of facilities and amenities as private condo residents. This means that EC owners can still enjoy a comfortable and luxurious living environment despite the lower cost.

Table: Price Comparison between ECs and Private Condos

Property Type	Average Price (per square foot)
EC	$XXX
Private Condo	$XXX

Note: The prices mentioned above are for illustrative purposes only and may vary depending on the location and other factors.

Tip: When considering affordability, it’s important to also take into account the potential for capital appreciation. ECs have the potential to increase in value over time, providing buyers with a good return on investment.

Access to Full Condo Facilities

When you buy an EC, you not only get a spacious and well-designed living space, but you also gain access to a wide range of full condo facilities. These facilities are similar to those found in private condominiums and can include amenities such as swimming pools, gyms, BBQ pits, function rooms, and more.

Having access to these facilities allows you to enjoy a luxurious lifestyle without the high price tag of a private condo. You can relax by the pool, work out at the gym, or host gatherings with friends and family in the function rooms.

Table: Comparison of Condo Facilities

Facility	ECs	Private Condo
Swimming Pool	Yes	Yes
Gym	Yes	Yes
BBQ Pits	Yes	Yes
Function Rooms	Yes	Yes

Note: The availability and quality of facilities may vary between different EC developments.

Tip: Make sure to check the list of facilities provided by the EC development you are interested in to ensure they meet your lifestyle preferences and needs.

Potential for Capital Appreciation (100% Make Money?)

When considering the purchase of an EC, one of the key factors to take into account is the potential for capital appreciation. ECs are known to have the potential for significant price growth over time, especially after the Minimum Occupation Period (MOP) has been fulfilled and when it can be sold to foreigners 10 years later.

Here are some factors that contribute to the potential for capital appreciation:

• Location: ECs located in prime areas or near upcoming developments tend to experience higher appreciation in value.
• Government Initiatives: Government initiatives, such as the development of nearby infrastructure or improvement in transportation connectivity, can positively impact the value of ECs.
• Supply and Demand: Limited supply of EC units and strong demand from eligible buyers can drive up prices.

It is important to note that while capital appreciation is a potential benefit of buying an EC, it is subject to market conditions and various other factors. It is advisable to conduct thorough research and seek professional advice before making any investment decisions.

Key Considerations when Buying an EC

Location and Accessibility

When considering the location of an EC, it is important to look for areas that offer convenient access to amenities and transportation. Proximity to schools, shopping malls, and public transportation hubs can greatly enhance the convenience and quality of life for EC residents.

In terms of accessibility, it is beneficial to choose an EC that is well-connected to major roads and expressways. This allows for easy commuting to different parts of Singapore, whether it is for work or leisure activities.

Additionally, it is worth considering the future development plans in the surrounding area. Upcoming infrastructure projects, such as new MRT lines or commercial developments, can potentially increase the value of the EC in the long run.

To summarize, when evaluating the location and accessibility of an EC, factors such as proximity to amenities, transportation options, and future development plans should be taken into account.

Developer’s Track Record

When considering buying an EC, it is crucial to research and evaluate the developer’s track record. The developer’s track record is an important factor to consider as it provides insights into their experience, reputation, and the quality of their past projects.

Here are some key points to consider when assessing the developer’s track record:

• Look at the developer’s portfolio of past projects and their success in delivering quality developments.
• Research the developer’s reputation in the industry and their track record of completing projects on time.
• Consider the developer’s financial stability and their ability to secure financing for the project.

By thoroughly evaluating the developer’s track record, you can gain confidence in their ability to deliver a well-built and reliable EC.

EC Financing Options

When it comes to financing your EC purchase, there are several options available to you. Bank loans are a common choice for many buyers, offering competitive interest rates and flexible repayment terms. Another option is to utilize your Central Provident Fund (CPF) savings, which can be used for the down payment and monthly mortgage payments. It’s important to note that there are certain restrictions and limits on CPF usage for EC purchases.

If you’re considering financing your EC purchase with a bank loan, it’s advisable to shop around and compare different banks’ offerings. Look for banks that offer favorable interest rates and repayment terms that suit your financial situation. Additionally, consider engaging the services of a mortgage broker who can help you navigate the loan application process and find the best loan package for your needs.

Remember, it’s crucial to carefully consider your financing options and choose the one that aligns with your financial goals and capabilities.

The EC Buying Process

Buying an EC can be complicated especially since there are more restriction and criteria before Singaporean are able to buy them. Here are some key details to take note of:

Application and Eligibility Check

Before applying for an EC, it is important to undergo an eligibility check to ensure that you meet the criteria set by the Housing and Development Board (HDB). The eligibility criteria include factors such as citizenship, age, family nucleus, and income ceiling. Note that unfortunately, singles are not allowed to buy an EC alone until after the 5 year MOP.

To facilitate the application process, you will need to prepare the following documents:

• NRIC or passport
• Income documents
• Marriage certificate (if applicable)

Once you have gathered all the necessary documents, you can proceed with the application for an EC. It is advisable to double-check the eligibility criteria and ensure that all the required documents are in order to avoid any delays or complications.

Tip: It is recommended to consult with a qualified real estate agent or financial advisor to guide you through the application and eligibility check process.

Balloting and Booking of Unit

After the eligibility check, the next step in the EC buying process is the balloting and booking of the unit. During the balloting process, buyers will be assigned a queue number, and units will be allocated based on the order of the queue. It is important to note that the balloting process is random and fair, ensuring equal opportunities for all buyers.

Once a unit has been allocated, buyers will need to proceed with the booking by signing the Sales & Purchase Agreement (SPA) and paying the necessary booking fee. The booking fee is typically 5% of the purchase price and is payable in cash or CPF funds.

Table: EC Balloting and Booking Process

Step	Description
1	Eligibility check
2	Balloting process
3	Unit allocation
4	Booking and payment

Tip: It is advisable to have all necessary documents and financing arrangements in place before the balloting and booking process to ensure a smooth transaction.

Payment and Financing

When it comes to payment and financing for an EC, there are a few important considerations to keep in mind:

1. Progressive Payment Scheme: EC buyers typically follow a progressive payment scheme, where payments are made in stages as the construction progresses. This helps to manage the financial commitment and ensures that buyers only pay for completed work.
2. Mortgage Financing: EC buyers can finance their purchase through a bank loan or a Housing and Development Board (HDB) loan. It is important to compare the interest rates and terms offered by different banks or HDB to find the most suitable financing option.
3. CPF Usage: Buyers can use their Central Provident Fund (CPF) savings to pay for the down payment and monthly installments of the EC. However, there are certain limits and restrictions on the amount that can be used.
4. Additional Buyer’s Stamp Duty (ABSD): EC buyers who are not Singapore citizens or permanent residents are subject to ABSD. The ABSD rates vary depending on the buyer’s residency status.

Considering these factors will help EC buyers make informed decisions when it comes to payment and financing.

Important Documents and Regulations

Sales & Purchase Agreement

The Sales & Purchase Agreement (SPA) is a legally binding contract between the buyer and the developer. It outlines the terms and conditions of the purchase, including the price, payment schedule, and completion date.

Important clauses to look out for in the SPA include:

1. Defects Liability Period: This specifies the period during which the developer is responsible for rectifying any defects in the unit.
2. Cancellation and Refund Policy: It is important to understand the conditions under which the buyer can cancel the purchase and the refund policy.
3. Restrictions on Resale: The SPA may include restrictions on selling the unit within a certain period of time.

Tip: Before signing the SPA, it is advisable to engage a lawyer to review the agreement and ensure that your interests are protected.

For a complete understanding of the SPA, it is recommended to carefully read and seek professional advice if needed.

Housing Loan Eligibility

When applying for a housing loan for an Executive Condo (EC), it is important to meet the eligibility criteria set by the financial institution. These criteria may include factors such as income, credit score, and existing debts. It is advisable to check with multiple banks or lenders to compare the loan terms and interest rates they offer.

To increase your chances of loan approval, it is recommended to maintain a good credit score and keep your debt-to-income ratio within a manageable range. This can be achieved by paying bills on time and reducing outstanding debts.

Table: Housing Loan Eligibility Criteria

Eligibility Criteria	Minimum Requirement
Income	$X,XXX per month
Credit Score	XXX and above
Debt-to-Income Ratio	X% or lower

Tip: It is advisable to consult a financial advisor or mortgage broker to understand the loan eligibility criteria and options available to you.

CPF Usage and Withdrawal

When purchasing an EC, buyers can utilize their Central Provident Fund (CPF) savings for the down payment and monthly mortgage payments. The CPF can be used for up to 15% of the purchase price of the EC. However, it is important to note that there are certain restrictions and limitations on the usage of CPF funds for ECs.

Here are some key points to consider regarding CPF usage and withdrawal for ECs:

• CPF funds can only be used for ECs that are fully paid for and have obtained the Temporary Occupation Permit (TOP).
• The CPF Board will assess the eligibility of the EC project for CPF usage.
• Buyers must have sufficient CPF savings in their Ordinary Account to cover the down payment and monthly mortgage payments.
• The CPF withdrawal limit for ECs is based on the Valuation Limit, which is the lower of the purchase price or the market value at the time of purchase.

It is advisable for buyers to consult with the CPF Board or a financial advisor to understand the specific CPF rules and regulations for purchasing an EC.

Should you buy an executive condo?

With its unique combination of affordability, amenities, and potential for appreciation, ECs offer a compelling option for those looking to own a quality home. However, it is important to carefully consider the eligibility criteria, financial commitments, and long-term plans before making a decision.

By doing thorough research and seeking professional advice, prospective buyers can navigate the EC market with confidence and make an informed choice. Remember, buying an EC is not just about finding a place to live, but also about securing your financial future.

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Aaron Oon is a Senior Associate Director at Propnex and Founder of Real Estate Insider. A consistent Top Producer in the competitive world of real estate, Armed with a Finance degree from NUS, Aaron is more than just a real estate agent; he’s a strategic thinker and a creative problem solver.

If you are looking to invest in a property here in Singapore or would like to know more about Singapore’s property market. Be sure to reach out through the Calendy video link below:

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