Buying An Executive Condominium
type of residential property is probably the most expensive ticket item in our lifetime.
Besides the primary needs of 'Owning a place called home' , the nagging questions
that are probably in the back of one's mind
1. Should I buy a BTO, EC or private condomimum
Should I Buy an EC Now?
3. Will the new upcoming launches be more
expensive than exsiting one?
Below are my personal humble
opinion. Read on and decide for yourself if you share my thoughts and whether it is the right
time to consider buying one now.
1. Should I Buy a BTO, EC or Private
First thing first, we need to
look at the factors that could limit or determine your choice.
Eligibility. As BTO and EC are meant for owners' occupation, you must
formed a family nucleus and meet the eligibility criteria before you can buy a BTO or EC unit. The
eligibility conditions for BTO and EC are quite similar except for the difference in household income
level ($14,000 vs $16,000). The other difference is the housing scheme for single. While a
single SC above 35 years of age, earning up to $6,000 per month can opt for a 2 room BTO unit in
non-mature estate, you need another SC single (also above 35 years of age) to buy under the Joint
Singles scheme for an EC unit, So if you are a single below 35 years of age, your choice is only
limited to the private condominium or the resale market.
For private condominum, there is no eligibility condition, it is open to anyone who
has the means to purchase.
Income Level. Next, your home options may be
limited by the total gross income. If your monthly total household income
* below $14,000, all 3 options (BTO, EC, private condo) are
* $14,000 - $16,000, you can only buy an EC or
* above $16,000, your only option is private condo.
Location. This is probably the most crucial
consideration for home stay buyer.
However, location suitability may varies from buyer to buyer. Some may look at
surrounding amenities for transport and/or convenience, while others may consider being near to a
table-topping school as important. So if you like a
particular location very much, whether it is a BTO or EC or private condo project, you
are likely to go for it (subject to your above eligibilty and income level
Budget. Another limiting and determining factor would be your budget. It
is prudent not to overstretch yourself in purchasing a property. Having
a budget in mind can help narrrow your options (BTO, EC or Condo) and/or the type of unit
choices (1, 2, 3, 4 or 5 bedrooms). In today market, while a $800,000 budget will
enable you to get a good 5 Room BTO unit, you will be stretched to find a good 3 Bedroom EC unit
to your liking and be limited to a 1 Bedroom shoebox unit for private
Going further, if you still
have 2 or more options open after considering all the above qualifying factors, you may want to weigh the
below pro and cons to help determine the right type of home that best meet your needs.
To sum up, in my humble opinion, if
you have to choose between a BTO and EC, it depend on your comfort zone. For some, the
appeal of higher potential capital gain associated with EC is compelling enough to stretch their
budget. For others, the BTO option, being 'easier on the pocket' make
It is probably easier to decide between an EC
and private condo. The chart above show a comparison of resale transactions in Punggol
for recent EC (MOP met) vs Private Residentials (TOP in 2010s). It showed the
average profit for EC being higher than private residential projects. So unless you aspire
to own a portfolio of properties as investment within the next 5 years, the choice should
be obvious. The 'subsidised housing cherry' is there for you to pick. If you don't pick it
now, you may not have another chance if your household income exceed the ceiling
threshold. Besides, once you own a private property, coming back to public housing is
difficult because even if you are still eligibile and had sold off your private property,
there is time bar of 30 months before you can apply to buy a new unit from
2. Should I buy an EC
To buy an EC now or later depend primarily on individual
a. If you need a roof and/or to start your family asap, you should start looking now
Project completion date will be high on your priority list; the earlier you decide the more choices of units
b. If the current launches are not in the locality of your choice and you can wait for another
couple of years, keep an eye on upcoming launches and Government Land Sales sites for
EC. (Text me if you need any help in monitoring and/or the probability of an EC sites
in your desired locality)
c. If you are waitng for an EC next to MRT, the
chances are slim as prime land are normally reserved for private residential. The
upcoming EC project, Tenet is within walking distnace to a MRT (Tampines North MRT), and OLA is the
nearest to a LRT.
d. If you are concern on market trend and pricing, read on to the next question
In my opinion, it is better to buy now than later. The main reasons
being an unexpected promotion/salary increment may result in the household
income exceeding the threshold. Besides regulatory guidelines may change at short notices
which may impact your affordability to buy an EC unit. Buying later may make sense in a softtening
market situation or for a 2nd timer who can wait out and is on a lookout for their 'perfect'
3. Will the new upcoming launches
be more expensive than exsiting one?
Your guess is as good as
mine. We can only crystal ball the future pricing trend. However, we do know that market
Demand and Supply will deterrmine pricing trend and for certainty, that there are only 3 ways prices can go
in the future:
Up North. On a macro
level, with inflation driving up land and construction cost, it is not
wrong to assume pricing will edge up steadily over time. On a micro level, with locality
that has better amenities commanding better price, there is a
positive correlation between the land price with unit selling price. So knowing the
land bid price can help to determine whether the next upcoming launch in the locality will be cheaper or
For illustration, let's look at
the Sengkang area where there has been a number of EC launches spread almost evenly over the past 10
years. From the chart below, there is a corresponding price dip in average selling
price for Treasure Crest where the land bid was lower than The Vales. Over a period of 10
years, the average selling price for new EC launches at Sengkang locality has crept up from
$750 psf (Treasure Crest) to $1135 psf (OLA).
With the latest land bid
for the Tengah Garden Walk EC site ($605 psf ppr) smashing the previous record ($580 psf ppr)
for Piermont Grand you can probably do an educated guess where the pricing trend is
b. Flat. In a Supply exceed Demand situation and/or weak
economy, prices will likely to stay flat. Also the Singapore Government has been known to use cooling
measure to flatten the rate of price increase. The TDSR/MSR ruling in 2013 was probably the
most effective measure that casues prices to flatten out after a sharp rise in early
2010s. The last flattening of EC prices was during the
period 2013 to 2015 (see above Sengakng EC chart) where demand was impacted by the TDSR/MSR ruling, and
there are around 10 EC projects in the market resulting in The Vales being launched at the flatten
market price despite its higher land cost.
Since the COVID pandemic in
early 2020, home pricing has risen over the past year. The probability is high that we may see
another round of Goverment cooling measure and subsequent flatening of prices as in the mid
2010s. The lingering unknown is
"Will the new pricepoint after
flatening be higher than current price?"
c. Down South. Price will likely head south if there is
an internal/external shock to the market and/or a prolong recession. This last "Down South" situation for
EC was in the early 2000s where the economy is fragile after the 911 attack and SARS.
Going forward, in
event that EC prices do actually head south, there is actually less to fear in buying an EC unit as
compared to a private condominium. The
There is already a pricing
differential buffer of about 15 – 30% compared to similar private condominium around the
vicinity. The pricing buffer is higher
for applicants who are eligible for the CPF housing
EC are meant for owner occupation and
any pricing dip would not be as great as in private condo. In addition, the
minimum occupation period of 5 years is actually a blessing in disguise. It effectively helps to ensure
no similar unit from the same project will be in the resale market during the construction plus
MOP period (8 years), lowering the risk of margin calls from the bank.
On the other side of the scale, the Singapore Government also has an interest to
ensure pricing do not fall steeply. In the early 2000s "Down South" situation, the Executive
Condo Housing Scheme program (ECHS) was suspended in 2003 and revived later in 2010 when
prices start to surge after the sub-prime crisis. In today situation, the Government
may turn 1 or more of its cooling measures into 'stimulating measures' to moderate any prices
Like stock market, what goes down will
eventually comes back. It is just a matter of time before prices turns upward.
The upturn may happen by the time your unit is fully privatised. Looking back at history, those who bought
EC around the late 1990s' peak and holding it through the early 2000s'
bottom is now laughing to the bank. Their privatised unit can now be sold at a healthy
In summary, property is
a long term investment. In land scare Singapore. If buying an EC unit is within your means, the
downside is minimial and you should book a unit that best meet your needs as soon as
possible. The earlier you decide, the better will be your chance to find a choice unit
and called it 'home'.
Take the first step towards buying an Executive Condo unit
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(or sms/call 91861688 for showflat appoitment)
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