Purchasing a property is one of the biggest decisions in most people’s lives. In Singapore, the options of purchasing are HDB housing, Executive Condominium, Private Condominium, and Landed Housing. Most people would be able to share the reasons to pick between HDB, Condominiums and Landed Property. When it comes to the difference between Executive Condominiums and Private Condominiums, many would say it is the same. Executive Condominiums and Private Condominiums do share many similarities, there are significant differences too. Before we go in to the similarities and differences, it is important to differentiate between Executive Condominiums bought directly from the developer, Executive Condominiums bought in the private market between 5 to 10 years after the TOP, and Executive Condominiums bought in the private market 10 years after TOP.
Ownership restrictions
Executive Condominiums bought directly from the developer have the most restrictions on them. These are:
Eligibility Condition | Eligibility Condition explained |
Family Nucleus | One of four Family Nucleus Conditions must be met: 1. Public Scheme 2. Fiancé/Fiancée Scheme 3. Orphans Scheme 4. Joint Singles Scheme These are explained here: Family Nucleus Conditions for Executive Condominium purchase explained |
Citizenship | · If applying under the Public Scheme, Fiancé/Fiancée Scheme or Orphans Scheme, the main applicant must be a Singapore Citizen and at least one other applicant must be a Singapore Citizen or Singapore Permanent resident · If applying under the Joint Singles Scheme, all applicants must be Singapore Citizens |
Age | · If applying under the Public Scheme, Fiancé/Fiancée Scheme or Orphans Scheme, the main applicant must be at least 21 years old · If applying under the Joint Singles Scheme, all applicants must be at least 35 years |
Income ceiling | Household income must not exceed $16,000 (increased from $14,000 in September 2019) |
Property ownership | · Applicants may have enjoyed government subsidised housing (either through a buying a HDB/DBSS/EC directly from the government or receiving a CPF Housing Grant for a resale flat) a maximum of one time · Excluding a HDB property, you do not own any property locally or overseas and have not disposed of any property (excluding a HDB property, but including ECs, which are not considered as HDB properties) within the last 30 months Do note that once you receive the keys of your EC, you will have to dispose of your HDB property within 6 months |
Executive Condominiums bought directly from the developer must also fulfil a 5 year Minimum Occupation Period (MOP) before the owner is allowed to sell or rent it.
Once the 5 year MOP is met, the only restriction placed is that the EC may be sold to Singapore Citizens and Singapore Permanent Residents (PRs) only. After a subsequent 5 years (10 years in total), the unit is fully privatised (i.e. becomes a private condominium) and may be sold to anyone (Singaporean, PR, foreigners).
Grants available for purchase/Levy payable on purchase
When making a purchase with a price tag as high as a condominium in Singapore, every little bit helps. Grants are only available for Executive Condominiums bought directly from developers. A CPF housing grant of up to SGD 30,000 may be obtained for an EC for first timer applicants only. Full details of the grants can be seen on the HDB website here: CPF Housing Grants for ECs
Other grants e.g. Proximity Housing Grant, is not applicable for EC purchase.
Like everything in life, there are 2 sides to the Grants coin too. This is the resale levy. A resale levy is payable if a subsidised HDB flat was disposed by the EC buyers. The details of the resale levy too may be seen on the HDB website: Resale Levy on purchase of EC
Pricing
One of the main reasons that the Singapore government started building Executive Condominiums was to help the “sandwiched” class of Singaporeans who aspire to a Condominium lifestyle, however find the price tag of Private Condominiums out of their reach. The Singapore Government sells the land that ECs are meant to be built on at a lower price to developers, who in turn pass this lower cost to the buyers, which results in ECs having a lower psf cost that the surrounding condominiums on launch by usually between 10% to 20%.
Another reason that developers have to keep the pricing of ECs low is that ECs purchased from developers are subjected to both MSR and TDSR requirements. ECs bought privately (i.e. after the first owner has fulfilled MOP) as well as private condominiums are subjected to the TDSR requirement alone. Under TDSR, the percentage of the borrowers’ monthly income that goes towards repaying all his/her debt obligations cannot exceed 60%. All the borrower’s debts (e.g. credit card bill, car loan repayments) are taken in to account when calculating the TDSR. MSR rules are slightly different, and they indicate the percentage of the borrower’s monthly income that goes towards repaying all his/her property loan obligations alone, cannot exceed 30% of the borrowers’ monthly income. Adding this to the income ceiling for EC purchases, and developers have to keep the overall price of ECs down, in order for the target market to be able to afford it.
Once the ECs have fulfilled MOP, prices are market dictated, and are subjected to TDSR requirements only.
Location, location, location
A handy map of all the ECs in Singapore is below
Legend:
Blue: Past 10 year mark
Green: Between 5 and 10 years
Orange: Yet to MOP
As you can see, not all districts and locations have ECs being developed, so if you’d like to purchase an EC, the locations that you’d be able to get are limited to what is available.
Private Condominiums, in contrast, are located all across Singapore so the location that you can buy in is much less constrained.
So, Executive Condominium or Private Condominium?
After all the above, should buyers purchase an Executive Condominium, or a Private Condominium? While there isn’t a one size fits all answer, people who are looking for just a comfortable place to call home at the most cost efficient price who can meet the requirements to buy an EC can consider an EC as it will provide them with what they need. On the other hand, for investors who would like to retain maximum flexibility in their investments or for people who do not meet the requirements to buy an EC can consider private property investment as the way to go.