Singapore -- (ReleaseWire) -- 11/08/2012 -- Executive Condominiums (ECs) were first introduced more than 10 years ago by the government to cater to the needs of the “sandwiched class” of Singaporeans who could not qualify for cheap new HDB flats but cannot afford to buy a private condo. ECs filled the gap by providing apartments with condo facilities but at 20-30% discount compared to nearby private properties.
However, the price benefit does come with some caveats. New units come with ownership and resale restrictions such as the household income for applicants must not exceed $12,000 per month and buyers must fulfil a Minimum Occupation Period (MOP) of 5 years. During the 6th to 10th year, units can be sold to Singaporeans or Permanent Residents (PRs) with no family nucleus requirements. After 10 years, ECs become fully privatised and all restrictions are lifted.
Nevertheless, ECs remain an affordable and attractive form of housing for genuine owner-occupied buyers since they are eligible for CPF grants and there is a strong potential for capital appreciation. While we mentioned earlier that there is a price discount of 20-30%, the difference tends to narrow as the EC gets fully privatised. Therefore, buyers can generally expect to be reaping profits in 10 years’ time.
As our housing needs change, ECs have also evolved to cater to the different types of homebuyers. Traditional condominiums built in the nineties will usually consist of two, three and four bedroom units but nowadays, more buyers opting for dual-key units for investment purposes, or to live with their extended family while retaining some privacy. ECs such as The Topiary in Sengkang recognizes such demand and will be introducing three and four bedroom dual-key units which are expected to be highly popular. Waterbay and Heronbay are also the first two ECs in Singapore to offer five-bedroom units to tailor towards bigger families.
A recent report by The Straits Times (“More new ECs top $1m mark”) notes that there have been more than 340 ECs sold at over $1 million each since the relaunch of this housing category in late 2010. This shows that there is an increasing number of young, affluent buyers snagging up bigger and more lavish penthouses. The average prices of all new ECs have also reached a historical high of $731psf in the third quarter but buyers seem unfazed and are seen snapping up units fast at the latest Waterbay launch.
With the improvement in innovation, design and facilities, one can now enjoy luxurious living at ECs without breaking the bank. It is no wonder ECs continue to stay as one of the hottest market segments in Singapore’s property industry.
Janice is the author of CondoLaunchGuru. To find out more about The Topiary, be sure to visit the website.
Name: Janice Kong
Company: ERA Realty Pte Ltd
450 Lor 6 Toa Payoh, #03-00
ERA Centre, Singapore 319394