When buying a house, most of us would know to consider three main types: HDB, Executive Condominiums (ECs), and Condominiums. Many of us would say “ECs are the cheaper version of Condominiums leh, good to buy meh?”.
Indeed, some of you that can afford both ECs and also stretch a little more for a private condominium may wonder if you should forgo one for another. The million-dollar question arises: which one is more worth it?
As many of you might expect, the differences between ECs and Condos go beyond the price disparity - there are implicit costs to consider, differences in design and facilities, grant restrictions and many more. In this article, we go into detail the differences between ECs and Condos so that you can have a better idea of which is more suitable for you!
First of all: What is an Executive Condominium?
Executive Condominiums (ECs) have been available since the early 90s after the government recognised the need for there to be a more catered housing option for the sandwich class, in a bid to encourage homeownership in Singapore. With the increasingly affluent population that are looking for better housing options, ECs has progressively grown in popularity among Singaporeans.
Essentially, an EC is a public-private hybrid accommodation that consists of certain facilities, security and other advantages that comes with a private condominium, but also with the public nature of HDB flats (e.g. the eligibility requirements). As such, its price is ranged to be more luxurious than HDB flats but also more affordable than private condominiums.
Then: What is a Condo?
A condominium is a private property where the land and project is bidded by various developers, which will also determine the price point of the property. Since each condo is developed by different developers, they will include unique designs and common facilities depending on the trend (e.g. increasing affinity to nature) or the designer they are collaborating with. You would expect a more artistic approach when it comes to condo designs, which is the reason why condos are generally more expensive.
Now that we have gotten that out of the way, here are a few key differences between ECs and Condos for you to consider:
#1 Grants Available
Since ECs are still part of the government’s initiatives, they will enjoy CPF Housing Grants from developers, namely the Family Grant and the Half Housing Grant. You can apply for the CPF Housing Grant when booking your EC with the developer.
Unfortunately, Condos will not be able to enjoy these CPF Housing Grants (or any kind of Grants, for the matter) since they are considered private properties and will not be subsidized or supported by the Government.
#2 Facilities - are they really different?
Overtime, to increase the competitiveness of ECs, they are increasingly similar to private condominiums by sharing some of the same facilities, including the coveted swimming pool, garden lawns, tennis courts, and even gyms or for some, dedicated areas for themed gardens and alcoves.
Take for example the recent EC OLA, the site plan here shows how it also has an amazing selection of common facilities, not losing out to its fellow condo counterparts.
However, if I were to really point out the difference - it would be the design and perhaps the quality of equipment within the units itself. Condos would usually use high-quality cooking and bathroom equipment that exudes class and sophistication. They value design as much as functionality, which is usually why Condos are much more expensive.
#3 Occupancy Restrictions - Investment or Own Use?
A key difference would be the restrictions surrounding ECs that bar it from being utilized as an investment tool: The Minimum Occupation Period (MOP). Afterall, the ECs were designed for living specifically for the sandwich class - that means that there are regulations put in place against buying and selling at a fast pace for a quick buck.
In this aspect, anyone buying ECs will need to know that you have to stay in it for at least 5 years before you can sell it to another party. In addition, to prevent foreign investment from taking place, it can only be sold to Singapore citizens or Singapore Permanent Residents (PRs). However, foreigners will be able to purchase the EC once a full 10 years have passed - that is to say that after a decade of EC ownership, it will be open to sale in the free market. This may, to a certain extent, limit your ability to leverage on market prices and profit extensively from the sale of your EC.
This would not be a problem if you are a first-time home buyer and want to buy the EC for you and your family to live in. However, if you are using it as an investment tool, these restrictions might prevent you from earning the best prices if it falls within the MOP. For this aspect, you would then want to consider a Condo as an investment instead (or an EC that is already in the market for > 10 years).
#4 Eligibility - Are You eligible for ECs?
Given that ECs are popular due to the facilities it provides and the attractive price tag it comes with, there are numerous eligibility requirements that come along with the purchase of ECs. For one, there are the following criteria to look into:
You or your spouse is a Singapore Citizen
Your household income must not be above $16,000 (revised)
You have not owned any property, locally or overseas, in the last 30 months and you do not own any property now
You have not owned > 1 HDB/DBSS or EC flat previously
In addition to that, you will need to fulfill one of the following schemes:
Public Scheme: you form a family nucleus with either your spouse (and children, if any), your parents (and siblings, if any), or solely with your children (granted that you have legal custody).
Fiance scheme: you are applying with your fiance / spouse-to-be.
Orphan scheme: you are an orphan and you are applying with a sibling.
Joint Singles Scheme: You and up to 3 other co-applicants apply together, provided that all of you are single (unmarried, divorced or widowed) and are Singapore citizens of at least 35 years old.
Finally, do note that applicants for an EC will be required to be at least 21 years old and the CPF Housing Grant for singles is not available when buying an EC.
Conversely, since Condos are private property, there are no restrictions in your single or married status. While this means you have to forgo the grants available, many affluent individuals would prefer Condos since it doesn’t restrict them from needing a significant other to buy a unit together.
The decision: Key attractive points
However, other than the attractive price tag that is friendly towards any first timers, ECs generally see a prospective capital gain once the decade is over. As previously mentioned, once the decade’s worth of minimum occupation period is over, ECs will have their restrictions lifted and essentially bear the same nature as that of a private condominium. Given that ECs have a much lower price tag when bought during the ownership period, it also stands to gain much more when being sold in the free market. Therefore, think of it as a lucrative and worthwhile investment, but the gains only to be realised after 10 years or so.
However, non-first timers may also expand their options to consider private properties like Condos since they offer much more investment flexibility and less restrictions. Affluent individuals that value design and living space would also consider private condos as well.
Conclusion: The Decision is Yours!
Therefore, it really comes down to what you value and what are the risks you are willing to take to make up for your preferences. It also depends on what your purpose is, which could very much change your decisions.
If you require more property information and targeted analysis, feel free to reach out for the most up to date and reliable advice.