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Executive Condominiums in Singapore
What are executive condos?
In Singapore, housing fall under 2 categories, public housing (also known as HDB Flats), or private housing (which includes Apartments, Condominiums, Landed properties etc).
Executive Condominiums (or known to some as HDB EC) fall in the middle and are considered a hybrid of private and public housing.
These developments are meant for the group the Government refers to as ‘the sandwiched class’ as the prices are significantly lower than private condominiums.
Why are HDB ECs considered a good investment ?
Most of these developments have the typical facilities found in a private condominium, i.e. Swimming Pool, Gym Facilities, Security Guards etc, therefore, owners would be getting access to all of this 'cheaper' than a private condo. Further more, the restrictions on these ECs would be lifted after 10 years and it would then be considered private property so owners feel like they are getting a good deal.
Update 26 Feb 2016 : You might want to check out these articles on how ECs are a better long term investment as compared to private properties.
Stats have also shown that these EC's appreciate at a greater rate than Private condos.
The table below show the rate of appreciation of Executive Condos after they are sold on the open market. ( After 10 years)
Source : sgnewlaunchesguru.com
You may also want to watch this video on the benefits of HDB Ecs by PropertyGuru.
EC Eligibility : Who can buy ECs (executive condos)?
These eligibility conditions refer to those who intend to purchase ECs directly from the developer. ECs sold by their current owners are refer to as ECs on the open market. Refer to HDB's website on more details on EC's Eligibility Conditions .
1. Salary / Average Gross Monthly Household Income
Prime Minister Lee Hsien Loong announced on 23 Aug 2015 that the Income ceiling to purchase ECs (i.e. The Total Average Gross Monthly Household Income) has been raised to $14000.
2. Family Nucleus
Applicants need to fall under the following 4 schemes
You can get additional information from HDB's page here.
3. Ownership in Private Properties
You, the applicant, your spouse or any other occupiers (or their spouses) listed in the application form must not own any private property, buildings or land (commercial or residential). If they do, you are only allowed to submit an application after 30 months of selling it off.
You are also not allowed to own or purchase any during the period between the application and the collection of keys or during the Minimum Occupation Period.
These ‘properties’ includes but is not limited to
- HUDC flats (Privatised and Non-Privatised)
- Properties acquired by gift
- Properties inherited as beneficiaries under a will or as a result of the Intestate Succession Act
- Private properties
- Properties owned/acquired/disposed through nominees regardless of properties location
4. Owners / Ex- owners of HDB Flats/DBSS flats/ Ecs
Each eligible Singaporean households can only purchase the following twice.
- A flat direct from HDB ( BTO/ SBF / Walk In Selection etc)
- A resale flat from the open market with the CPF Housing Grant ( *First timers)
- A DBSS flat from the developer
- An EC unit from the developer.
If you have previously purchased 2 of the above units, you will no longer be eligible for another EC direct from the developer.
Are there grants for those who purchase Executive Condos?
There are grants for First-Timers Families (have not used the First Timer Grants when purchasing a resale HDB/ Have not purchased a BTO) under the Public Scheme but the grants depend on your total monthly household income and the eligibility conditions listed below.
(If you already owned a subsidized HDB, either a BTO or a Resale with a grant, you are not eligible for the grant. Instead you should check if you need to pay the resale levy)
However you should also meet the Eligibility Conditions listed here.
Is there a Minimum Occupation Period (MOP) for ECs?
Yes, after the collection of the keys, EC owners are subjected to the following HDB rules for the first 5 years
- EC owners are not allowed to sell their property during the first 5 years
- EC owners are not allowed to rent out their whole units during the first 5 years.
- The Essential Occupiers in the EC application (forming a family nucleus) must continue to be listed for the whole 5 years. They cannot make a separate application or to be listed as occupiers in another application for a HDB or an EC.
However,
- After the minimum occupation period of 5 years, Singaporeans are able to sell their Exec Condo to Singaporeans on the resale market.
- After 10 years, the Executive Condo can be sold to Singaporeans and eligible foreigners, on the open market.
What are resale levies and Are the Resale Levies applicable to ECs?
Resale Levies are payments to HDB when you purchase a second subsidized home. This previously only applied to the purchase of a second HDB BTO/SBF unit and not an EC.
However, it was announced that resale levies are now payable for ECs where the land sale was launched on or after 9 Dec 2013 (From Westwood Residences Onwards)
Which are Executive Condos with No Resale Levy?
Executive Condos (ECs) Not subjected to the resale levy
Available units from the following launches are not subjected to the resale levy.
DEVELOPMENT | ADDRESS | COMPLETION (TOP) |
|---|---|---|
Forestville (D25) | Woodlands Drive 16 | May 2016 |
Twin Fountains (D25) | Woodlands Ave 6 | Oct 2016 |
Sea Horizon (D18) | Pasir Ris Drive 3 | November 2016 |
Lush Acres (D28) | Fernvale Link | November 2016 |
Ecopolitan (D19) | Punggol Walk | Dec 2016 |
Skypark (D27) | Sembawang Crescent | Jan 2017 |
Waterwoods (D19) | Punggol Field Walk | March 2017 |
The Amore (D19) | Edgedale Plains | July 2017 |
Bellewoods (D25) | Woodlands Ave 5 | Nov 2017 |
The Terrace (D19) | Edgefield Plains | Nov 2017 |
BelleWaters (D19) | Anchorvale Crescent | Nov 2017 |
Lakelife (D22) | Tao Ching Road | Dec 2017 |
Which are Executive Condos subjected to the Resale Levy?
Executive Condos (ECs) subjected to the resale levy
These are the upcoming Executive condos launched in 2015 that is subjected to the resale levy.
DEVELOPMENT | ADDRESS | COMPLETION |
|---|---|---|
Signature at Yishun | Yishun St 51 | May 2018 |
Westwood Residences (D22) | 180 Westwood Ave | Aug 2018 |
The Vales (D19) | Woodlands Ave 6 | Aug 2018 |
Parc Life | Sembawang Crescent | Sept 2018 |
The Visionaire (D27) | Canberra Drive | Oct 2018 |
Criterion (D27) | Yishun St 51 | Dec 2018 |
The Brownstone (D27) | Canberra Drive | Jan 2019 |
Wandervale (D23) | Chua Chu Kang Drive | 1st quarter 2019 |
Do First Timer get special priority when purchasing EC’s from developers?
The developer has to ensure that 70% of the units are allocated for first timers during the initial launch period. As indicated above, First Timers are also eligible for grants from HDB.
Can I use HDB Loans to purchase an EC?
No, an EC is considered a semi – private property, so you can only finance it with a bank loan.
How do I calculate the loan for an Executive Condo/ Can I afford an Exec condominium?
To calculate the amount of loan you are eligible for when purchasing an EC, you need to calculate using the MSR (Mortgage Servicing Ratio) instead of the TDSR (Total Debt Servicing Ratio) which the bank uses to calculate loan eligibility for purchasing private property.
According to the MSR your mortgage loan cannot be more than 30% of your total income. According to the TDSR, your total expenses cannot be more than 60% of your total income. Therefore those intending to purchase a private property will be at an advantage if they do not have other liabilities like credit card loans, personal loans etc.
You will notice that the bank will give you a lesser loan amount for an EC as compared to a private property. This is due to the MSR / TDSR calculations regulations that was introduced during the cooling measures.
You may want to estimate your loan at http://www.propertyguru.com.sg/mortgage/affordability-calculator. (Remember to select Executive Condominiums)
Alternatively please call/text us at 96918885 or email us at askus@propertyrocking.com to get an estimation.
Payment Schemes for EC
There are 2 payment schemes offered for ECs i.e. the
- Deferred Payment Scheme (DPS)
- Normal Payment Scheme (NPS)
The deferred payment scheme allows the owners to put off paying their loans until the ECs are ready for occupation (TOP stage). However, if you opt for this, you would need to pay a slightly higher price for the property. Note that you can only qualify for a bridging loan if you opt for the deferred payment scheme ( DPS)
Deferred Payment Scheme (DPS)
This is the payment schedule structure for the Deferred Payment Scheme.
Normal Payment Scheme (Progressive Payment Scheme)
This is the typical payment scheme for Buildings Under construction. You will only be charged ‘progressively’ as the property is being built.
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