Property market trends over the past years have shown executive condominiums (EC) to be among the top-selling projects for a string of consecutive years. In fact, many of the EC launches have seen 50% of its units sold during the launch weekend itself, with some projects even seeing close to 90% unit sales after just two months of their launch period. Projects such as Sea Horizon, Forestville and Ecopolitan have managed to secure buyers for all their units well ahead of their launch promotion.
ECs are considered to be a hybrid between private and public housing that aims to cater to the needs of the “sandwich” class — those who exceed the household income ceiling for public housing of S$10,000 but are not quite financially sound to afford private property in Singapore. In light of this, the Singapore government has launched the EC housing scheme to cater for this group class and has mandated a set of eligibility conditions to ensure affordability for this particular select group. The EC is essentially a private property that is heavily subsidised by the Housing & Development Board (HDB).
As with HDB public housing, applicants of ECs are required to form a family nucleus or, if they are 35 years old and above, to join up with other singles that meet the same minimum age requirement. They should also not exceed the stipulated household income ceiling of S$14,000. In addition, only Singaporean couples and Permanent Resident (Find out about it) couples can purchase an EC unit. Buyers must also be aware that they are required to fulfil the mandatory five-year minimum occupation period (MOP) before they are allowed to rent out or sell off the EC unit.
Despite the strict regulations that are imposed by the Singapore government, ECs are still appealing to the general masses as they typically come with a complete suite of condominium facilities and interior designs comparable to their private development counterparts.
The Likely Buyers
From the market trends gathered over the past couple of years, ECs seem to appeal the most to two main groups of buyers.
The first group consists of first-timers who are planning to tie the knot and settle down in their early 30s. At this point of their lives, these young couples would have a combined monthly income of approximately S$10,000, on top of their own personal savings. This group are also more likely to be financially savvy and are fully aware of their income status and the housing options that are available to them, such as HDB flats, ECs or private condominiums.
Moreover, first-timers are exempted from the resale levy that is imposed for resale units in the property market, which can rise up to as much as S$50,000. Plus, they are also eligible for a Central Provident Fund (CPF) family grant of up to S$30,000. A quick mental calculation will tell you that these first-timers stand to save as much as S$80,000 when purchasing an EC as their first housing property.
The second group of EC buyers consists of the second-timers or the upgraders. This group is typically made up of families with children that are looking to make the transition from public to private housing. At this juncture, it is usually a toss between an EC and a private condominium, with the former edging the latter in price because it is normally sold at a rough discount of approximately 20% as compared to private condominiums when both housing products essentially offer similar quality of living. The only difference between the two is the resale limitations from the fifth to the tenth year as well as the five-year MOP for ECs.
Furthermore, EC developers have been ramping up their efforts and have made EC projects almost, if not completely, indistinguishable from their private development counterparts and have also injected a spectrum of condominium facilities ( think swimming pools, gym and function rooms). In the current competitive property market, some of the EC developers are coming up with different and unique innovative ways to make their projects stand out from the others. For example, The Visionaire at Canberra is the first EC to date to have incorporated smart home technology. On top of that, they are also dishing out more than 25 free lifestyle classes to residents.
In summary, ECs provide buyers with a feasible and practical option for them to consider, regardless of whether it is their first home or as an upgrading option. Having said that, it is important to note that not everyone can purchase an EC. ECs are designed for the group of people who meet the stringent eligibility criteria, such as household income ceiling as well as citizenship or PR status. If you happen to fall within this selected group, you should seriously consider capitalising on this excellent opportunity to land yourself an EC and with it, an entire new lifestyle.