While there is a clear difference between HDBs and private properties, many Singaporeans are confused between the terms Executive Condominiums (ECs) and Condominiums. They both sound similar and their prices are higher than that of HDBs.
The executive condo is a relatively more atas type of housing as compared to HDBs in Singapore.
You might have walked past certain fancy-looking ECs and mistook them for condominiums. They are both equipped with facilities and stylish building designs.
If you’re trying to decide between a HDB and an EC, or a condominium, this executive condo guide is the perfect place to start! It has all the information you need to make an informed decision, from what pros and cons to eligibility conditions, grants, and means to pay for your EC. Plus, our team of experts are always here to help.
What Is An Executive Condo (EC)?
Also called “sandwich flats,” executive condos are a type of housing in Singapore that is popular with young professionals and families. ECs are built and sold by private developers, and they come with a 99-year lease, but the government subsidises them.
That’s why they’re a public-private housing hybrid.
And they reap the best of both worlds.
Unlike public housing, ECs have many of the same amenities as private condominiums, such as swimming pools, gyms, and tennis courts. However, they are typically more affordable than private condominiums.
One way to think of an EC is as a “starter home” for young Singaporeans who want to own their private property but may not yet be able to afford a private condominium. In recent years, the demand for ECs has been high, and prices have increased significantly. However, they remain an attractive option for many buyers.
Pros & Cons Of An EC
When judging an EC’s pros and cons, it’s wise to analyse the matter through the private condo vs executive condo lens.
- ECs are usually smaller than private condos, so if you’re looking for extra room to spread out, you may be disappointed.
- ECs typically have more rules and regulations than private condos, so an executive condo might not be the best fit if you’re someone who likes to live on the wild side.
- ECs tend to be located in suburban areas, far from the business centre and sometimes even far from MRT stations.
Of course, there are also some advantages to living in an executive condo.
For one, they’re usually more affordable than private condos, so an EC might be a good option if you’re on a budget. Additionally, ECs typically have better amenities than private condos, so if you’re looking for things like swimming pools and gyms, an executive condo is likely to have what you’re looking for.
Pros of executive condominiums:
- CPF housing grant eligibility
- Affordable compared to private condos
- Becomes private after the tenth year
Cons of executive condominiums:
- HDB for the first ten years
- Located on the outskirts
- Few launches
- Not covered by the HDB loan scheme
How Much Do ECs Cost In Singapore?
As any savvy property investor knows, location is everything. Is the property located near an MRT station? Do you need to take a long bus ride to get to the Central Business District (CBD)? That often means choosing between a private condo or an executive condominium (EC) in Singapore.
But what’s the difference between a private condo vs executive condo? And more importantly, how much does an EC cost?
In general, ECs are slightly cheaper than private condos, but they have some trade-offs. ECs are only available to Singaporeans and permanent residents, and there are restrictions on resale and rental. But for many people, the lower price tag is worth the compromise.
Prices vary widely depending on the development, but you can expect to pay anywhere from $1 million per unit. Of course, as with any property purchase, it’s essential to do your research before making a decision. But an executive condo may be the way to go if you’re looking for a more affordable option.
You may even get a CPF housing grant for your EC if you’re a first-time buyer (the Family Grant or the Half-Housing Grant).
Are New ECs Eligible for CPF Housing Grants?
Yes, new executive condos are eligible for CPF housing grants.
The executive condo eligibility conditions for the Family Grant are outlined in the table below:
| Applicant’s Incomes per Month | Singapore Citizen | Citizen/PR |
|---|---|---|
| Below $10,000 | $30,000 | $20,000 |
| $10,001-$11,000 | $20,000 | $10,000 |
| $11,001-$12,000 | $10,000 | Not eligible |
| $12,001-$14,000 | Not eligible | Not eligible |
What if one of the spouses has received a housing subsidy before, but the other has not? In this case, the couple may apply for the Half-Housing Grant.
| Average monthly gross income of applicants/occupiers | Half-Housing Grant |
|---|---|
| $10,000 or lower | $15,000 |
| $10,001 to $11,000 | $10,000 |
| $11,001 to $12,000 | $5,000 |
| $12,001 to $14,000 | Not eligible |
Who Can Buy an Executive Condo?
Before buying an executive condo in Singapore, consider the requirements below:
Eligibility Schemes
First, you’ll have to be in one of the executive condo eligibility schemes below:
- Public Scheme: Buying with your immediate family (spouse, children, parents, or siblings)
- Fiancé/Fiancée Scheme: Buying with your future spouse
- Orphans Scheme: Orphaned people with no spouses
- Joint Singles Scheme: Up to four single Singapore citizens above the age of 35 applying together
Warning: if you’re planning to purchase an executive condo by yourself, you won’t be eligible for a new one or a housing grant.
Age
The minimum age requirement is 21, except for the Joint Singles Scheme addressing people at least 35 years old.
Income
The maximum income cap is $16,000 per household per month.
Property Ownership
You can only apply for an executive condo in Singapore if you don’t own another property in Singapore and abroad. If you did own another residence, you should dispose of it at least 30 months before your application.
Gifts, inheritances, and transfers are all included.
How to Buy Executive Condo in Singapore?
After reviewing the executive condo eligibility conditions above, you’re ready for the following steps:
Step 1: Understand Your Budget
- Get an Approval-in-Principle from your bank. This letter outlines the amount your bank will lend you, up to 75% of the property’s value. That means your minimum downpayment is 25%, while the cash downpayment is 5% of the property’s value.
- Consider other fees: Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), Option fee: 5% from the purchase cost and non-refundable, Legal fees, Fire insurance, Resale levy
- Mortgage servicing ratio (MSR). MSR defines the percentage of your gross monthly income that goes toward repaying all your property loans. In Singapore, MSR is capped at 30%.
- Total debt servicing ratio (TDSR). TDSR refers to the percentage of your gross monthly income that goes toward repaying all loans (not just property-related ones). The maximum TDSR in Singapore is 55%.
Picking an Executive Condo Project
There are few EC projects in Singapore – that’s both good and bad news. While you can’t be too picky, you’ll also have less research to do.
Yes, that’s how you pick an executive condo:
You visit the units. Afterwards, register online with all the right paperwork to connect with the developers.
Step 2: Submit an Application
Once the developers start accepting applications, send yours. After the developers check your eligibility, they will assign you a ballot number with your appointment’s details.
Next, book your executive condo appointment. During the appointment, you will visit the place and choose a condo. If the EC you want isn’t available, you’re not obligated to go further with the purchase.
But if you stick to the process, you’ll have to pay a 5% booking fee in cash. After paying it, you’ll receive a document with all the property’s details and sign the contract.
You’re not out of the woods yet.
HDB still has to review your request, and it may take up to a month before receiving their approval.
Pro tip: if you plan on using your CPF account, including the CPF Housing Grant, fill in the CPF Withdrawal Form RPS/1A.
Step 3: Get Your Bank Loan
There’s no need to waste time until you hear back from the HDB. Instead, research different loan providers to get the best loan for your needs. The bank you’ll work with will give you a Letter of Offer.
Don’t sign this document until you receive the HDB approval. If the HDB rejects your application, you’ll lose the cancellation charges.
Sign the S&P Documents and Pay the Other Charges
If the HDB approves your request, you will receive the S&P documents. You have three weeks to sign them if you still want to purchase the executive condo.
If you do, you’ll need to have:
- The remaining 20% of your downpayment (you can use your CPF account for that)
- Cash for stamp duty when you sign the documents or within the next two weeks
What happens if you changed your mind? If you’ve changed your mind and won’t purchase that executive condo, you’ll lose 25% of the booking fee.
Pay for Your Executive Condo
There are two ways to pay for the condo:
- The Normal Payment Scheme (NPS) is also called the Progressive Payment Scheme. This option assumes you’ll pay a percentage of the condo’s price at each significant milestone. For example, you’ll have to fork out 10% after the foundation is completed, 10% after the reinforced concrete framework is completed and so forth.
- The Deferred Payment Scheme means waiting until the project receives its TOP before paying the cost. This alternative is better if you have other outstanding mortgage loans because deferring the payment means more time until you get the EC loan. As such, you can repay your past mortgages and obtain a larger loan for your executive condo.
Step 4: Get Your Keys
The last step of the process is getting your keys once the project receives that expected TOP.
Where Are ECs Commonly Located At?
Unfortunately, executive condos in Singapore don’t have desirable locations. The projects are usually located on the island’s outskirts to keep the prices competitive. Otherwise, more people would purchase private condos situated in the centre of Singapore.
Therefore, you can expect your executive condo in areas like:
- Sengkang
- Punggol
- Woodlands
- Choa Chu Kang
- Sembawang
These areas are further from town or the CBD. However, if you’re working in the west or at the far north, these locations work well for you!
Choosing the Right Home
So, there you have it: a breakdown of what you need to know about down payments when buying an executive condo.
Remember that this is just a general guide – always consult with your mortgage broker or lender to get the most accurate information for your specific situation.
And, if you ever have any questions, especially financial inquiries, our team is here to help! Credit 21 is the number 1 licensed moneylender in Singapore, and we always strive to serve our customers to the best of our abilities! Click here to find out more.
