19 Oct 2016
Executive condominiums (ECs) were originally conceived to cater to the aspirations and needs of the so called “sandwiched” class – those whose household income exceed the ceiling for public housing, but not yet able to comfortably afford a private condominium. Currently, the monthly household income ceiling to qualify for an EC purchase is set at $14,000; whilst it is $12,000 for those purchasing the Housing and Development Board’s (HDB) Build-to-Order (BTO) flats.
Besides satisfying the monthly household income criterion of not exceeding $14,000, applicants must purchase an EC either by forming a family nucleus or with other singles if they are at least 35 years old. Only Singaporean couples and Singaporean / SPR couples may purchase an EC unit. Also, buyers have to fulfill a mandatory five-year minimum occupation period (MOP) before they are allowed to rent out the whole unit or sell off the apartment. Despite these restrictions, ECs come with a full suite of condominium facilities and are physically indistinguishable from private condominiums in terms of design and physical outlook.
Typical EC buyers are either first-timers buying their matrimonial home; or families with young or teenage children that are upgrading from HDB flats.
A buyer who is eligible to buy an EC could also choose to stay in public housing, which is more affordable. Alternatively, private housing is also a viable option, albeit a more expensive one which might require taking up more debt for a longer period. ECs are typically priced $750 to $850 per square foot whilst mass market condominiums within the vicinity are likely to be $1,000 to $1,100 per square foot onwards. This puts the EC buyer on the immediate price advantage as he is essentially buying a product that has a similar look and feel of a mass market condominium, but at a cheaper price. Whatever the choice, there is no “correct” housing type to buy. It all depends on the buyer’s preference, financial ability and household needs.
Ultimately, by introducing ECs into the market, the government is providing buyers with another housing option to choose from. With more variety in the market, buyers then can choose the type of housing that best suits their needs, rather than be limited to only public or private housing.
Herein lies the relevance of ECs.
