Which Is Better? Executive Condo vs Condo

EC vs Condo - Feature Image

Both executive condominiums (ECs) and private condos are becoming more and more popular in today’s real estate market. With similar offers of luxurious living close to the city, there seems to be little to no difference between both.

From convenient locations to modern amenities, both Singapore executive condos and private condos are highly sought after. But what are the similarities and differences between the two housing options? And which one is better than the other?

Most people don’t actually know the difference between an executive condominium and a private condominium. Most people would say that there’s no difference between the two. Apart from the competitive price and the promise of convenient living, however, there are a few aspects that make condos different from executive condos in Singapore.

For potential home buyers who can afford both housing units, choosing between a private condo and an executive condo in Singapore is a challenging task.

If you find yourself in that situation, it’s important to learn more about what makes these housing options different from each other so you can choose the right property type for your needs. Continue reading to discover their distinct features and characteristics.

Built By Private Developers EC vs Private Condominium - Insights

What Is An Executive Condo?

An executive condominium (EC) is a type of property that is commonly found in Singapore. It is a type of public-private hybrid property that was originally built in Singapore in the 1990s.

It allows you to enjoy all the features and amenities that you would expect to find in a private condo development while benefiting from government subsidies. ECs, however, are governed by rules and regulations set forth by the Singapore government.

Built and sold by private developers, ECs are housing units that have similar amenities but are more affordable than a private condo since their land is partially financed by the government. ECs were targeted at assisting the ever-growing “sandwich class”, with a specific EC income ceiling.

For households that have a combined monthly income of around $12,000 to $14,000, an EC can be a great deal. Prices are more affordable due to subsidies and you are able to enjoy great facilities and amenities similar to those you would expect to find in a modern condo.

On the other hand, a condo is a type of housing tenure whereby specific parts of the property are individually owned. In addition to individually-owned apartment units, the unit owners share certain facilities, such as the lobby, elevator, hallway, and external facilities like a lap pool, garden, gyms, BBQ pits, tennis courts, swimming pools, and more.

Private Condo vs Condo Executive For Assisting Middle-Class Income Ceiling

Are You Eligible To Buy An EC?

Firstly, it is important to note that some of the limitations that come with an EC mean that some people may not be eligible for this kind of flat. So, before you start researching property listings, it is important to find out if a Singapore EC is the right type of housing unit for you in the first place.

You can apply to buy an EC Singapore if you meet the following conditions:

  • Your household income has to be $14,000 or less
  • You must be a Singaporean citizen
  • You must not have owned any kind of private property in Singapore or abroad, in the last 30 months
  • You do not own any kind of property at the moment
  • You have not held one or more EC or DBSS/HDB flat before

Moreover, you must belong to one of these eligibility schemes:

  • Public Scheme: You can apply either with your parents (plus siblings), your spouse (and/or children) or just with your children (provided there are no legal custody issues)
  • Fiancee Scheme: You can apply with your partner/fiance
  • Orphans Scheme: If you’re an orphan, you can apply with your sibling

Other requirements include the following:

  • You must be at least 21 years old if you’re applying under one of the other schemes
  • Both you and spouse must be Singapore citizens if you’re applying under the Joint Singles Scheme
  • If you’re applying under either the Public, Fiancé or Orphan scheme, then at least one co-applicant must be either a Singapore citizen or a Singapore permanent resident

If you’ve met the above conditions, and want to apply for an EC in Singapore, then you can go ahead and check out the new launches and register your interest.

No Restrictions For Private vs Restrictions For EC - 5 Year MOP

What’s Different Between EC And Private Condo?

Housing Grants

For ECs, individuals can use the available CPF housing grant to finance the purchase with a maximum amount of $30,000 in grants. This is because an EC is considered to be a public housing project from the very beginning. Therefore, a prospective home buyer can reduce the price further by taking advantage of the housing grants provided that they are eligible.

Due to the housing grants available and the low costs involved, more and more Singaporeans now choose to purchase an EC instead of a private condo. With private condominiums, there are no grants, but you can still utilize CPF housing grants to finance the property.

Price

Despite the 5-year Minimum Occupancy Period (MOP), executive condominium developments are 25 to 30 per cent more affordable than condos of comparable size and neighborhood. [1] One of the main reasons for the affordability is that the land cost is subsidized by the government.

In fact, the price of off-plan or new launch ECs range from around S$700 – S$900 p.s.f., which translates to around $650,000 for a 2-bedroom unit or S$800,000 for a 3-bedroom unit. On the other hand, a similar 3-bedroom condo can go for over $1 million.

Valuation

Since executive condominiums are situated in prime districts, they tend to perform better than private condos when it comes to valuation and rental income. After 10 years, it commands significant capital gains in comparison to private condominiums.

Although a private condo is more expensive to start with, you can buy a unit without worrying about lease decay. Therefore, a private condo tends to be more stable in terms of market value. This stability coupled with its potential for capital appreciation makes it a great choice for a long-term investment project.

EC vs Condo - Greater Valuation After 10 Years

Payment

For executive condominiums, the deferred payment scheme is still available for certain projects. For private condos, the progressive payment scheme is available.

Occupancy

For executive condos, there’s a 5-year MOP before home owners can sell or rent out their units. For private condos, there is no minimum occupation period required. Also, restrictions on property ownership do not apply.

Home Loan

For executive condominiums, housing loan financing can be taken up with financial institutions like traditional banks. Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) are applicable when applying for a bank loan for home financing.

For a private condo, housing loan financing can be taken up with financial institutions like traditional banks. Total Debt Serving Ratio (TDSR) is applicable when applying for home loan financing.

5 Year Minimum Occupancy Period (MOP) - Affordability Of EC Over Private Property

First-Timers Privileges and Priorities

Many first time home buyers choose an EC over a private condo because of different priority privileges. First-timers enjoy priority privileges when it comes to flat allocation.

Your application will be considered to be a first-timer if you and one of the listed owners and residents meet the following eligibility conditions:

  • Must not own a flat purchased from HDB or a DBSS/EC flat purchased from a private developer
  • Must not have sold an HDB flat or a DBSS/EC flat purchased from a private developer
  • Must not have received any CPF housing grant for financing HDB resale flats
  • Must not have taken any kind of housing subsidy (for example, benefited from HUDC estate privatisation or the Selective En bloc Redevelopment Scheme (SERS)

If you’re a second-timer and your partner/spouse is a first-time buyer, then you’ll be pleased to know that you can enjoy first-timer privileges and priorities as a couple. In comparison, private housing does not come with these privileges and priorities.

Conclusion

Deciding between a Singapore executive condo and a private condo can be a challenging task, and it depends a lot on your purpose of purchasing the property. While both types can make great investment options, one is better than the other in certain circumstances.

If you simply want a place to call home or to raise a family, then an EC can be a great choice. ECs are subsidized by the national government and the majority of them are situated in prime districts. Despite the apparent limitations and Minimum Occupancy Period, ECs are a great choice also because they are initially designed to be considered as housing for citizens rather than for long term investment purposes.

On the other hand, a private condo is an excellent choice if you are looking for a long term investment and you are planning to hold your property for life.

If there is a very small price difference (which sometimes happens once the executive condo Singapore has been privatized, a 5% or even 9% price gap is minor. Moreover, you can sell it on the open market under the right conditions without caring about restrictions.

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