Why You Should Buy Executive Condo
Wah! Simi lai eh? (What is this?)
You are probably looking at this topic because your household income ceiling has reached the maximum criteria to apply for BTO which is $14,000. But you want a new flat and a private condo is a stretch at this point of time.
What other options do you have?
Executive condo lor! This is a type of public housing, hybrid of public and private housing. It comes with common facilities like security, gym, clubhouse, swimming pool, playgrounds, etc like a private condo. It is developed by private developers but tied some HDB rules and regulation, such as a 5-year MOP like HDB and an income ceiling of maximum $16,000.
But don’t be put off, coming under the umbrella of HDB means it is affordable and you get to enjoy up to $30,000 grant depending on your household income.
Let’s discuss why you should really consider executive condo!
Why EC (executive condo) ?
Yes, you are entitled to grants for condo, but only for executive condo hor!
So, how much will you receive?
|Average monthly household income housing grant *||SC/SC||SC/PR||Half|
|$10,000 or lower||$30,000||$20,000||$15,000|
|$10,001 to $11,000||$20,000||$10,000||$10,000|
|$11,001 to $12,000||$10,000||NIL||$5,000|
|$12,001 to $16,000||NIL||NIL||NIL|
Other than the monthly household income and citizenship, you also has to fulfill the following
- All applicants and occupiers do not own other property overseas or locally
- All applicants and occupiers have not disposed of any private property within the last 30 months
- All applicants and occupiers cannot invest in private residential property from the date of application till after the 5-year MOP
- All applicants and occupiers must not be buying an HDB resale flat that has been announced for SERS
As EC comes under the umbrella of HDB and HDB is committed to offering affordable housing to Singaporeans, hence the prices are generally 25% to 30% cheaper than private condo of similar size and location. Reason being the government subsidizes the land cost for executive condo.
In short, it is like buying a Mercedes at Toyota price!
It becomes private condo after 10 years
The biggest advantage of executive condo is, it becomes a private condo after 10 years, meaning you are no longer tied by HDB restrictions on selling. You can now sell to anybody and buyers do not have to be subjected to HDB restrictions.
But that doesn’t mean you die die can only sell after 10 years!
You are still able to sell once you reach the MOP, but you can only sell to Singaporeans and PRs between 5-10 years.
You will also be able to rent out your executive condo once you have reached the MOP.
You get to enjoy the perks of living in a condominium, such as exclusive facilities and beautifully landscaped grounds. Take for example, Rivercove Residences EC in Sengkang has not one but three separate swimming pools, two clubhouses, lounges and lawns for just about any kind of entertainment or relaxation.
For busy young couples, convenience might just be the ultimate luxury. Imagine working out, playing your favorite sports, yoga and gatherings with friends or family, all without having to leave your home.
Many new ECs are now equipped with smart home capabilities which is commonly available in private condo, so that household chores can be done almost at the touch of a button (or even remotely!). You can also enjoy instant access to a range of service providers from caterers to plumbers to tennis coaches.
Most executive condo buyers are probably young families and you find yourselves having playmates for the kids easily since all are likely to gather at the play zone or swimming pool!
As the selling price of the executive condo is generally lower compared to private condo, the room for capital appreciation is higher. Research has shown that the price gap between executive condo and private condo narrows when it reaches its MOP.
70% of the homes are catered for first-timers during the developer’s launch period so you do stand a good chance to choose the unit you want.
In private condo, no group of buyers are given priority.
Deferred Payment Schemes
As the name suggests, the DPS allows buyers to push back the timing of the payments. Instead of making small payments every few months, DPS buyers need only pay 20 percent of the purchase price at the outset, while the remaining 80 percent is paid once the project is completed (about 3 years after).
So meaning, if you are still holding a HDB for example, you just need to pay 25% down payment, the balance to be paid upon TOP. So, you do not have to finance your current HDB and the new executive condo at the same time.
So, what are the disadvantages like? Will it put you off?
Singles cannot buy
Sorry, I understand it will be a strain to afford a private condo so executive condo price tag will be nice unless you are buying together with 3 other singles who are divorced or widowed.
As Executive Condo comes under HDB’s umbrella, you will have to be either one of the following to qualify.
You must be a family nucleus with a spouse, children, parents, siblings or children under your legal custody, care and control (if you are divorced).
You can be applying for executive condo under fiancé/fiancee scheme. However, you will have to be married upon collecting keys if you had applied for housing grant. If you did not apply for housing grant, you will have to be married 3 months upon collecting of keys
Under this scheme, you and your siblings who are applying, will have to be orphans and single (meaning they are unmarried, divorced or widowed) and at least 1 of the deceased parents must have had to be a Singapore Citizen or Singapore Permanent Resident.
Joint Singles Scheme
You can apply for an EC under this scheme with 3 other co-applicants. To be eligible, all 4 applicants have to be single, (unmarried, divorced or widowed), Singapore citizens, at least 35 years old and apply jointly as co-applicants.
No CPF housing grant is available under this category.
5 years MOP
Basically, much like buying a HDB, you are not allowed to rent out or sell the unit in the open market, neither are you allowed to buy another property locally or overseas.
To conclude, I strongly recommends executive condo as is a better choice for HDB upgraders or first timer who has the income below $16,000 as it is subsidized by the government.
Why worry about the restrictions and MOP because this is a home that is meant for a long term stay, to build that memories with your children without that stretch in finance!
Past transactions have shown that executive condo prices narrows, and are almost on par with private condo after 10 years. At the end of the day, an executive condo is a private condo after 10 years!
Let’s do some simple calculation as to how much you will to buy a unit!
Say if you are looking at a property of $1.2M, you will need
|Booking fee (cash)||5%||$ 60,000|
|Downpayment (cash/CPF)||20%||$ 240,000|
|Stamp duty||$ 32,600|
|Loan amount||75%||$ 900,000|
I hope this will give you a clearer picture of how much you will need to proceed that purchase!
Time to go shopping for one? Call us, let us help to choose the right one!
Still confused? Call us, we will be more than happy to sit down to clear your doubts over a cup of coffee!
Having been in the industry for 15 years, I have helped many clients to rent, buy or sell their properties, be it residential, commercial or industrial. I take each and every case seriously and this has earned referrals clients to me. Many clients are my friends now, my expat tenants jio me for coffee when they are in tI want to be your third pair of eyes to point out blind spots which may cost you money to rectify or worse, hard to sell because of that obstacle.
I take pride in what I do, which involve constantly reading up and updating myself with latest news and regulation changes, so to give my clients advices they deserve.