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EC Singapore: Executive Condo Buyers Guide 2024!

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As the city-state continues to evolve, so does the landscape of its residential options, offering unique opportunities for homeownership. Executive Condominiums (or ECs), standing at the crossroads of luxury and affordability, have emerged as a coveted choice for many.

In 2024, the allure of ECs has never been stronger, thanks to their strategic blend of comfort, style, and financial savvy. With the government’s supportive policies, including attractive subsidies, ECs present an unparalleled opportunity to step into a lifestyle that marries the best of private condominiums with the benefits of public housing.

Whether you’re a first-time homebuyer or looking to upgrade your living situation, our comprehensive guide will walk you through every aspect of buying an EC in Singapore— from understanding eligibility criteria to the salary you need to earn, CPF housing grants and much more.

Contents:

What is an executive condo?

An Executive Condominium or EC is a public-private hybrid between HDB flats and private condos. Executive condos provide an affordable middle-ground between public housing and private condos and are often the go-to choice for the “sandwich class” – Singaporeans whose income exceeds the income ceiling for HDB flats but still can’t quite afford a private condo.

Although developed by private property developers with all the frills of a private condo, ECs are offered at subsidised prices with the scope of certain housing grants. You might have walked past a fancy-looking EC and mistook it for a condominium.

The monthly income ceiling for HDB BTO (Build-To-Order) flats is currently $14,000, while for ECs, it is $16,000. So, those who have a combined household income between $14,000 and $15,999 can get their hands on a new home only by purchasing an EC or a private condo.

Since private units are much more expensive, ECs make an attractive choice for the sandwiched class.

According to property experts, ECs are still a favourite among eligible buyers in 2024 owing to their “relatively more affordable” pricing compared with other private condo projects”. For example, a 3-bedroom unit at a recently launched (27 Jan 2024) EC, Lumina Grand, is priced at $1.34 million while a new launch private property of a similar size would easily go for over $2 million in Singapore. Around 53% of Lumina Grand EC units were sold on launch weekend at average $1,464 psf

But best of all, ECs magically get upgraded to “private” status. Wait, how?

Is an executive condo considered private property?

Executive condos start under the HDB umbrella and are treated as public housing for the first 10 years, bound by HDB rules. From the 6th to 10th year, ECs are sold just like regular resale flats but only to Singapore citizens or permanent residents. Only after the 10th year do they go fully private, and that is when you can sell or rent them out to a bigger pool of buyers including foreigners.

ECs include all the same facilities as full-fledged condos, like gyms, swimming pools, tennis courts, etc., but are priced substantially lower than private condos. But since ECs are officially recognised as private properties from the 11th year, buyers should no longer expect any CPF housing grants.

If you want to own an executive condominium, you must know whether to buy a new EC or a resale EC. What would be a better buy? Let’s compare.

Key differences between a new EC and a resale EC

New ECResale EC
More restrictive eligibility criteriaLess restrictive eligibility criteria
Takes about 2 to 3 years to buildAlready completed
Must fulfil the 5-year MOPGenerally no MOP required
Takes 10 years for full privatisationCloser to full privatisation
CPF housing grants allowedNo CPF housing grants are available
Progressive Payment Scheme, starts with less down paymentMin. 25% down payment

How can I buy an EC in Singapore?

Even though ECs are considered HDB properties in the first 10 years, you are not allowed to take a HDB loan to finance your purchase. Instead, you will have to opt for a bank home loan in Singapore.

With aggressive interest rate hikes by the US Federal Reserve since March 2022, bank loans in Singapore are offering relatively higher interest rates as of now. A bank loan also demands a higher downpayment of 25% – of which 5% must be in cash – as you can only borrow a maximum of 75% versus 80% for HDB loans.

This means, in addition to an above-average income, you should also have amassed sufficient cash/CPF savings to cough up the downpayment – without crossing the income ceiling.

Note that 75% is the maximum amount (Loan-to-Value limit) you can borrow. If you already have an existing car loan, student loan, etc., you might not be able to borrow that much, thanks to TSDR (Total Debt Servicing Ratio). TDSR is the amount used from your gross monthly income to pay for all your debts.

Additionally, there is a 30% MSR (Mortgage Servicing Ratio) limit, which means you can only borrow up to 30% of your monthly income for your home loan. When buying an EC, both TDSR and MSR must apply.

There are some additional costs involved too. Be ready to pay approx. $2,000 in legal fees and up to $200 in valuation fees for a new EC. Buyers will also have to fork out the Buyer Stamp Duty (BSD).

With effect from 15 February 2023, the BSD rates have been revised for higher-value residential and non-residential properties. The portion of a property’s value above $1.5 million and up to $3 million will now be taxed at 5% (up from 4% previously), while those more than $3 million are taxed at 6% (up from 4% previously). Properties below $1 million will be taxed 3% of the property’s purchase price.

A key benefit of buying a new EC over a private condo is the eligibility for certain CPF housing grants. However, you must have a monthly gross income of $16,000 or less to be eligible. We will discuss the types of housing grants available for new ECs in detail in the section below.

Eligibility conditions for purchasing an EC

Before setting your heart on an EC, you must check whether you meet the eligibility conditions to buy an executive condo considering the HDB’s rules.

  • You must qualify under one of these HDB eligibility schemes to purchase an EC:
    • Public Scheme
    • Fiancé/Fiancée Scheme
    • Joint Singles Scheme
    • Orphans Scheme
  • You must be at least 21 years old; the co-applicant should be an SC or SPR. If you are buying alone, you can only purchase a resale EC (without a CPF housing grant). If you are a single SC, the minimum age criteria is 35 years and above.
  • Under the income ceiling rule, your household cannot earn a combined gross monthly income of more than $16,000, no matter what scheme you apply under.
  • To qualify under the property ownership rule, you:
  • should not own or have disposed of any other property in Singapore or overseas within the last 30 months of applying for an EC,
  • haven’t bought an EC, HDB and/or DBSS flat, and
  • haven’t received a housing grant before applying to buy an EC.
  • You must fulfil a Minimum Occupation Period (MOP) of 5 years before selling or renting out your flat.

How much do I need to earn to afford an EC in Singapore?

To derive how much income you need to earn, let’s take the example of a new 3-bedroom EC since it is one of the popular sizes for an average Singaporean household.

Usually, a 3-bedroom new launch EC in 2024 can conservatively cost anywhere between $1.2 million and $1.9 million.

Now let’s get down to the calculations.

Step 1: Calculate the downpayment and loan quantum

Those eligible to buy an EC can borrow up to 75% (maximum LTV) of the EC price from the bank.

EC priceDownpaymentLoan quantum
$1,200,000$300,000$900,000
$1,900,000$475,000$1,425,000

Step 2: Outline your monthly mortgage repayments

Depending on the maximum loan quantum you can borrow, you can compute the estimated monthly instalments based on the available interest rate and loan tenure. Let’s say the interest rate is 3.25% p.a. and the loan tenure is 25 years.

EC priceLoan quantumMonthly instalments
$1,200,000$900,000$4,386 per month
$1,900,000$1,425,000$6,944 per month

Step 3: Consider the additional MSR rule (for ECs still within MOP period)

Mortgages for EC developments which have not yet met the Minimum Occupancy Period (MOP) are subjected to a 30% Mortgage Servicing Ratio (MSR).

EC priceMonthly instalments (at 3.25%, 25 years)Minimum salary required
$1,200,000$4,386 per month$14,620 per month
$1,900,000$6,944 per month$23,147 per month

*Please note that if you are a second-timer who already has an HDB property and now looking to upgrade to an affordable private condo, you must not forget to take the HDB resale levy into account.

This amount is payable by buyers who purchased a subsidised property (like BTO or balance flats) first from a developer, later sold it, and then purchased another subsidised property from HDB, like EC. The resale levy amount depends on your previous subsidised housing type.

Check out the table below for the amount of resale levy a Singaporean household would need to pay depending on their first housing type.

First Subsidised Housing TypeResale Levy Amount (Households)
2-room flat$15,000
3-room flat$30,000
4-room flat$40,000
5-room flat$45,000
Executive flat$50,000
Executive condominium$55,000
Table: Resale Levy for second-timers

Can singles buy EC alone?

Unfortunately, singles are not allowed to buy a new EC alone in Singapore. At least not until the 5-year MOP is fulfilled. You can however apply with your parents or jointly with another single SC (under the Joint Single Scheme) if both of you are at least 35 years old.

Also note that single applicants for EC are not eligible for housing grants. If you (SC or SPR above 21) are planning to buy alone, you can only buy a resale EC.

How much do you pay upfront for EC?

The amount you need to pay upfront will vary based on the type of property you are buying.

For resale ECs, you will take a minimum downpayment of 25%. Moreover, 5% of your property’s payment must be in cash. The remaining 20% can be from your CPF savings.

If you are buying an EC still under construction, a payment of 5% in cash needs to be made while booking a property. Only after 9 weeks, you will need to make an additional 15% payment.

Can I buy a new EC if I currently own an HDB flat?

You are eligible to purchase a new EC if you have bought only one of the following before the application:

  • An HDB flat, such as BTO flat
  • An EC/DBSS flat from a property developer
  • A resale HDB flat using a CPF housing grant (for first-time applicants)

You can buy any 2 of the above property types in total but not the same property type twice. For example, you can buy an HDB flat and an EC but not two HDB flats or two ECs.

If you have purchased two such properties already, you are not entitled to apply for an EC or be listed as an essential occupier in an application.

Is buying an EC a good investment?

When choosing between BTOs, resale flats and ECs, each housing type has its own benefits and drawbacks. It actually depends on your financial goals and your intention of investing in the property market.

According to HDB’s Minimum Occupation Period (MOP) rule, you have to wait 5 years before selling and/or renting out your apartment. Once the property hits the MOP, you can expect to earn a healthy profit. You can sell or rent your EC to Singapore Citizens (SCs) or PRs.

The price or total value of an EC generally appreciates over the years. When an EC gets fully privatised after 10 years, you can sell to anyone, including foreigners. Foreigners are allowed to buy executive condos in Singapore.

An EC that is generally bought at a subsidised price from HDB offers high appreciation potential once it converts into a private condominium.

Let’s take a look at the pros and cons of investing in an executive condominium.

ProsCons
Cheaper than private condosBound by HDB rules for 10 years
Eligible for CPF housing grants (for first-time buyers)Mostly located in ‘ulu’ locations
Become fully privatised after 10 yearsNot eligible for HDB home loans; only bank loans
A good option for middle-income Singaporean familiesOnly a handful of HDB EC launches happen every year
Designed for own-stay purposes (owner-occupiers)Income ceiling up to $16,000; those higher not eligible
Table: Pros & Cons of EC

What are the CPF housing grants available for ECs?

If you pick an executive condo over a resale HDB flat, one thing you are likely to miss is the available CPF housing grants. The maximum value of housing grants you can get for a resale flat is $190,000 – although it varies circumstantially.

For new ECs, the grants are available for first-time buyers who do not own an HDB property and must not have received any other forms of housing subsidy. If you fulfil all other eligibility requirements for buying an executive condo, there are two types of grants available:

Family Grant (goes up to $30,000)

Average monthly gross income of applicants/occupiersSC householdSC/SPR household
$10,000 or lower$30,000$20,000
$10,000 to $11,000$20,000$10,000
$11,000 to $12,000$10,000Nil
$12,001 to $16,000NilNil
SC – Singapore Citizen; SPR – Singapore Permanent Resident

You can apply for a Family Grant at the time of booking the EC.

Half-Housing Grant (goes up to $15,000)

If you are a first-time applicant and your co-applicant has received a housing subsidy before, you can still get ‘half’ of the housing grant by applying for the Half-Housing Grant, which is basically half of the Family Grant.

Average monthly gross income of applicants/occupiersGrant amount
$10,000 or lower$15,000
$10,000 to $11,000$10,000
$11,000 to $12,000$5,000
$12,001 to $16,000Nil

Please note that buyers of resale ECs are not eligible for any housing grants, and resale ECs are comparatively higher in price than new ECs.

Are ECs cheaper than condos?

ECs in Singapore are more attractively priced – 20% to 30% cheaper than private condos. . The affordability of ECs is partly due to government subsidies, which reduce their cost and make them accessible to more buyers. In addition to the lower purchase price, ECs come with facilities and stylish designs typically found in private condos, such as swimming pools, gyms, BBQ pits, tennis courts, function rooms, etc. There are two key reasons behind it:

Location. Mostly, ECs are generally built at less accessible locations, which might be a distance away from existing malls and MRT stations.

Subsidised land prices. Since ECs are generally built in the OCR (Outside Central Region), the land ownership is subsidised by the government.

 Executive condominiums (EC)Private condominiums
Property typeConsidered private after 10 yearsPrivate
LeaseMax. lease of 99 years only9-year, 999-year or even freehold
Price20% to 30% cheaper than private condosRelatively pricier than ECs
Who can buy it?Only SC + SC, or SC + PR householdsAnyone
MOP5 yearsDoesn’t apply
Income ceiling≤ $16,000No income ceiling
CPF housing grantsEligible (for some)Not eligible
MortgageBank loan only; MSR & TDSR apply (if MOP is not reached)Bank loan only, TDSR applies
LocationUsually in the outskirts or suburban areasMostly nearby MRT stations
Table. Executive condo (EC) vs Private condo in Singapore

Considering affordability, the potential for ECs to appreciate in value over time should also be considered, offering buyers a strong investment return.

Can I afford an EC?

Whether or not you can afford an EC depends on several factors apart from the minimum income you must earn.

Renovation costs are situational and sometimes highly subjective. If you are moving to a home that is like a blank canvas, you may not have to spend much on renovations. Depending on the developer of your EC, it might already come equipped with basic fixtures, or you can even expect high-end finishing.

Also, maintenance fees may vary for ECs, depending on the services and amenities available. ECs with more facilities charge higher Service & Conservancy Charges (S&CC), which can be as high as $400.

You must consider your home’s Annual Value (AV), which gives an estimate of how much you can earn from renting your house. Depending on your EC’s AV, you will have to pay property taxes on it. ECs tend to have a higher AV than resale flats. It means while you could earn a higher rental income from renting your EC, you will need to consider this long-term expense while assessing its affordability.

Please note that, as discussed, ECs get fewer housing grants compared to HDB resale flats

Final Thoughts

Buying the least expensive resale EC, a 1-bedroom at $780,000, in 2024 could alternatively secure a 5-bedroom BTO in Singapore’s OCR or RCR areas, highlighting the significant investment decision involved.

The decision on whether or not to buy an EC in Singapore in 2024 should be made only after considering its pros and cons. While the amenities and benefits of an EC make them a go-to choice for Singaporeans, there is no point in having a dream EC home that compels you to cut corners to pay off your home loan mortgage.

If you have any questions about buying an EC, whether it is about finding the most suitable bank loan, applying for a mortgage or CPF grants, or planning your monthly repayments, please don’t hesitate to get in touch with us.

At Dollarback Mortgage, our team is dedicated to ensuring that your next financial purchase is the best decision for you.

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