The popularity of executive condos in Singapore has grown over the years. These properties offer all the amenities of private condominiums but at a much lower price. This makes them attractive to young Singaporeans who want to own their own property. Although the prices of executive condos have increased in recent years, they remain a popular option for buyers. Furthermore, they qualify for CPF Housing Grants and can be sold after 11 years on the resale market.
ECs are more expensive than HDBs
While ECs are not always in prime locations, they are cheaper than private mass market condos. Recent new launches have averaged around $2,100 psf, far cheaper than the $1,300 psf that HDB flats command. In addition, ECs offer a higher standard of living than HDB flats. However, the demand for executive condominiums outstrips the supply.
Executive condos are generally located in more rural areas away from town centres. This means that you will not be able to find an EC in prime areas. In addition, Singapore is an island, and many ECs are located far from the towns.
They offer a deferred payment scheme
The ECs scheme offers the residents of Singapore the opportunity to buy future private condos at discounted prices. A Singaporean household can qualify for up to $30,000 in subsidies under the scheme. To apply, EC buyers must form a family unit and occupy their units for five years. Furthermore, they cannot sub-sell their booked ECs. This 2007 move was aimed to curb the speculative nature of property investments.
The ECs scheme is available in two different payment schemes. The EC Deferred Payment Scheme (ECDP) does not require buyers to repay their housing loan during the construction period, but requires them to make monthly instalments once TOP is reached. After TOP, buyers must apply for a bank loan for the remaining balance. They must also provide a minimum 25% downpayment or 5% downpayment from their CPF OA savings.
They are not near MRT stations
ECs are increasingly popular among residents of Singapore, partly because they are surrounded by greenery. Many of them are not too far from the MRT stations. In fact, the nearest one is located just a few kilometres away. However, if you don’t want to walk that far, you can opt to buy a condominium in the vicinity. In that case, you will have to pay a premium for the privilege of living in a condominium.
The best way to avoid paying a premium for ECs that aren’t near MRT stations is to look for units in ECs that are closer to MRT stations. ECs are often less expensive than comparable private mass-market properties, primarily because of the lower land cost compared to private properties. Moreover, some of them are backed by government grants.
They appeal to first-time homebuyers
An EC is a subsidised private condominium where a first-time homebuyer may be eligible for a Central Provident Fund family grant of up to S$30,000. In addition, they are exempted from resale levy (which may cost up to S$50,000). For these reasons, ECs are an attractive option for first-time homebuyers in Singapore. These first-timers typically have combined monthly incomes of around S$10,000 and some savings to help cover the cost. In addition, they are exempte from resale levy and other taxes that are associated with second-hand and third-hand properties.
However, there are a few things to consider when buying an EC. First, the price of the property is important. This will determine whether you’ll make a profit or lose money in the future. Some people feel that paying a lower price during the launch period will result in more gains in the long run. The downside of this approach is that your EC must be occupied for at least five years before you can sell it on the open market. Second, you should look for ECs with good transportation connectivity and amenities.
They are eligible for CPF housing grants
CPF housing grants are available to ECs in Singapore who are able to demonstrate that they have the potential to afford a new home. The grant can be up to $25,000 for a two-room resale flat. Those who are unable to meet these requirements may be eligible for the Half-Housing Grant, which is equal to half of the Family Grant.
These housing grants are aimed at helping middle and lower-income Singaporeans afford a home. They do not come in cheque form, but are credited to your CPF Ordinary Account when you book your flat. However, you can only use these grants for the purchase of a flat, and you cannot apply for them for a second home. For those who can prove that they are low to mid-income, ECs are also eligible for HDB housing grants. This grant is based on the average income of the household for the past 12 months.