For Singaporeans, the Executive Condominium (EC) presents an opportunity to enjoy all the benefits of a private property: owners get to enjoy all of the prestige, privacy, and facilities associated with a typical condo, but at a more accessible price point

The EC housing concept is unique to Singapore, and was introduced in 1995, to “satisfy the demands of those who aspire to own private property but cannot afford to do so”. This enables ‘sandwich-class’ Singaporeans to achieve their aspiration of owning a private home. To balance cost and affordability, many new EC projects are located in young housing estates.

That said, there are several catches. EC buyers are subject to a monthly household income cap of $16,000 and a mandatory Minimum Occupation Period (MOP) of 5 years. Even so, after fulfilling the MOP, owners can only sell their EC to Singaporeans and Singapore Permanent Residents.

ECs can eventually be sold to foreigners, but only after they become fully privatised after a 10-year period. This degree of resale flexibility is a significant reason why ECs are such a useful asset and a fantastic choice for a first home.

Given the higher price point compared to HDB flats, most EC purchasers fall within the monthly household income bracket of between $14,000 and $16,000. This group of buyers does not qualify for Build-to-Order (BTO) flats, and has to either explore resale HDB flats or private homes as alternatives.

Naturally, this makes ECs an attractive option, which may prove to be a wise move for both asset appreciation and overall liveability. For first-time HDB homebuyers, purchasing an EC also grants them greater ease of securing a unit due to priority allocation.

Given their more attractive price point compared to private homes, many EC projects witnessed a strong sales rate during their debut. Recent EC launches, such as Altura and Lumina Grand, achieved 61% and 53% sales respectively over their launch weekends.

Previous EC owners have benefited from the capital appreciation, but the landscape is changing

Over the years, EC owners have continued to reap handsome profits, benefiting from rising home prices. For EC projects completed in 2013, owners who sold after 5 years achieved a median profit of $142,000. In contrast, owners of EC projects completed in 2019 who sold at the 5-year mark saw a remarkable median profit exceeding half a million dollars. While past EC owners have clearly benefited from significant capital appreciation, the landscape is changing.

Table 1: Median EC Gross Profitability Comparison by Year of Completion and Holding Period

Source: URA, ERA Research and Market Intelligence *Grey cells indicate less than 30 transactions recorded.

Rising Land Cost and EC prices – Does buying an EC still make economic sense?

Amid rising land costs for ECs, driven by both their popularity and limited land sales where only two to three plots are released each year, developers are presented with a unique challenge.

And that is to price their offerings within an affordable range for EC’s buyers whose mortgage loan eligibility are capped by the 30% Mortgage Servicing Ratio (MSR) framework and income ceilings. When combined, both these frameworks will limit buyers’ affordability due to the caps placed on loan quantum, and subsequently, the maximum property value that buyers can finance.  

Chart 1: Land Cost vs Median Sale Prices of ECs (by launch year) since 2022

Source: URA REALIS as of 25 Oct 2024, HDB, ERA Research and Market Intelligence

EC Is Still More Attractive Amid Widening Price Gap with OCR New Homes

Even as EC prices continue to climb, the price gap between ECs and new non-landed private homes in the Outside Central Region (OCR) has been steadily widening over the last three years, as the latter record a faster rate of appreciation. In 4Q 2021, the price gap between a new EC and an OCR new home was $388 psf. As of 3Q 2024, this difference has soared to $710 psf.

Chart 2: Median EC and OCR new home prices

Source: URA, HDB, ERA Research and Market Intelligence

Keeping EC price quantum palatable for first timers

To keep the price quantum within an accessible range, developers have focused on offering more flexible and efficient layouts that allow homebuyers to enjoy the best use of their space. By doing so, this allows developers to keep the price quantum palatable for most buyers.

For instance, first-time buyers, who are typically young couples prefer compact unit layouts that make daily maintenance more manageable, particularly for two working adults. At the same time, they want the flexibility of space to accommodate gatherings at home. For these buyers, the trade-off of a lower price quantum for a smaller unit is often seen as worthwhile.

New ECs Make Upgrading Effortless for Second-Timers

Separately, for HDB upgraders, or second-timers, there are even more compelling reasons to consider a new EC. Firstly, upgraders are exempted from having to pay the Additional Buyer’s Stamp Duty (ABSD), since they will need to dispose of their HDB flat within six months of receiving the keys to their new EC.

Next, second-timers can also take advantage of the Deferred Payment Scheme (DPS), which, although costing 2-3% more, allows them to defer the balance of 65% until the EC achieves the Temporary Occupation Permit (TOP). The final 15% will then be payable upon the Certification of Statutory Completion. This scheme helps second-timers avoid maintaining two mortgages while waiting for the completion of the new EC.

With the ability to plough their sale proceeds from their HDB flats, second-timers are more likely to be going for the larger 4- or 5-bedroom units.

Developing Townships Provide Valuable Exit Strategies for EC Homeowners

As mentioned, ECs are usually built within developing townships, providing prospective homeowners with a viable exit strategy should they ever plan to relocate after fulfilling the MOP.

To put things into perspective, there have been five ECs launches in the Tengah and Bukit Batok planning areas, with the most recent being Novo Place. These EC projects are located in close proximity to the Jurong Lake District, which is set to transform to the largest business district outside the Central Business District over the next decade. Buyers will stand to gain a first-mover advantage benefit from growth, better connectivity and more amenities in the future.

Additionally, since these ECs are located near the new Tengah estates, there is a large captive pool of HDB upgraders once they complete their MOP.

New ECs offer affordability and deferred payment schemes, which are especially appealing for first-timers and upgraders looking to maximise space and value. However, many of these projects are locate in up and coming estates, which tend to be on the outskirts of Singapore.

So, for homebuyers who place a premium on prime locations and central convenience, resale HDB flats—despite their rising price tags—can often be the more attractive choice. This brings us to the key question: Should you opt for a million-dollar HDB flat instead of new ECs?

New EC or Million-Dollar Resale HDB: Which Is the Better Choice?

To put it simply, location is the answer. The largest advantage of resale HDB flats, and the reason that people are willing to spend upwards of a million dollars on them is due to the ability to purchase an HDB flat in centrally located areas.

Moreover, they are able to purchase larger units in these areas (5-room or executive apartments) for a similar price quantum as the typical entry price for an EC. This is a core reason why we see so many million-dollar flat transactions in city fringe areas.

On the other hand, ECs are found in locations further from Central Singapore, typically in up-and-coming housing estates. Despite so, these ECs are often located within walking distance to MRT stations and will benefit as the neighbourhood infrastructure grows and mature.

Another important consideration will be that resale flats come with shorter lease tenures that could limit the loan-to-value limits and loan tenures, whereas new ECs come with a fresh 99-year lease. Buying older flats may also come with other hidden costs from hefty renovation cost to poorly maintain external facades which are difficult and near-impossible to rectify. 

So, Is Buying a New EC the Right Move?

To sum it up: ECs are a flexible private property that both the Singaporean first-time buyer and second-time upgrader should strongly consider if they meet the financial requirements.

They feature functional layouts for a variety of family sizes, are growing increasingly more convenient in location, and provide a family with privacy, exclusivity, and access to condominium facilities.

Furthermore, with many ECs situated in up-and-coming housing estates near areas poised for significant transformation, homeowners could benefit from a viable exit strategy should they need to shift in the future to match their families’ changing housing needs. Given their many positives, buying an EC is undoubtedly the right move for any savvy Singaporean property buyer.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval. 

Given their on-site facilities, like swimming pools and gyms, as well as the “condominium” label, it’s not hard to see why Executive Condominiums (EC) are an attractive option for homebuyers in Singapore.

Besides offering similar value propositions as regular condominiums, such as the privacy and security of a gated compound, ECs also possess a comparable sense of exclusivity. However, if you were to examine ECs in greater detail, you’ll notice several unique characteristics.

For instance, while new ECs are constructed by private developers, they are subject to similar rules and regulations as public housing (read: HDB flats). This applies to important concerns, including but not limited to, purchase eligibility, Minimum Occupation Period (MOP), and property rental.

So, where exactly do the similarities end and the differences begin for ECs? And more importantly, are they worth buying? For answers, and more, keep scrolling!

What is an Executive Condominium?

In a nutshell, ECs can be viewed as affordable alternatives to conventional non-landed private housing, albeit with key differences in buyer eligibility, as well as selling and renting restrictions.

For instance, ECs are subject to the same MOP as HDB flats, meaning that owners are prohibited from selling or renting out the entire unit during the holding period, which lasts five years from the date of obtaining the Temporary Occupation Permit.

Upon completion of the five-year MOP, these resale and rental restrictions are loosened, allowing EC owners to sell their home – but only to Singaporeans and Permanent Residents – as well as to rent them out entirely as a unit.

After a further five years from the end of an EC’s MOP, it’ll will achieve full privatisation, making it legally-purchasable by foreigners.

Also, in case you are wondering how ECs came to be as a ‘middle ground’ between HDB flats and private condos, their origins can be traced way back to the nineties.

In 1995, then Prime Minister Goh Chok Tong announced the introduction of a new housing concept to “satisfy the demands of those who aspire to own private property but cannot afford to do so”.

The end result is as we know it – strata-titled residences offering the best of both worlds, in terms of affordability and exclusivity.

How are Executive Condominiums different from private condos?

Besides being subject to the abovementioned regulations by HDB, there are several other notable ways that ECs differ from private condos:

However, if we were to set everything else aside, perhaps the most significant difference (for homebuyers) is the comparatively lower price tag of ECs.

Table 1a: Median psf prices for Executive Condominiums in District 23

Table 1b: Median psf prices for private condominiums in District 23

A quick glance at recent EC and new private condo launches in the same locality lends credibility to this observation.

Units at Altura and Lumina Grand, both ECs, have median prices of $1,479 and $1,525 respectively, whereas homes at their new private condo counterparts in District 23 command median prices of $1,799 and upwards.

Generally, this gap in prices between ECs and private condos can be chalked up to the substantial subsidies provided by the Singapore government, which may amount to as much as $30,000 for eligible first-time EC buyers.

Location, or more specifically, lower land costs associated with quieter sections of Singapore, likely play a contributing role in the greater affordability of ECs as well. And that is because ECs are typically built in up-and-coming areas, away from bustling mature towns where human activity, and also, land prices are higher.

What is the buying journey for a new Executive Condominium like?

Step 1: Find out about your desired EC and eligibility

For buyers in Singapore, the journey of purchasing a brand-new EC begins from the point that a developer announces the launch of a new EC project; this typically takes place 15 months after an EC site has been tendered during a Government Land Sales exercise.

But aside from visiting an EC showroom, buyers will also want to find out if they are eligible to purchase an EC at this stage.

This can be done by checking against the EC applicant eligibility conditions listed on the official HDB website, but generally, these criteria include:

Step 2: Submitting an application to the EC’s developer and waiting for balloting outcome

After completing the initial homework, the next step for buyers would be to apply for a developer’s balloting exercise; this process can be completed online via an e-application or in-person.

At this stage, buyers will also likely be required to provide copies of their identity, income, and marriage documents. So, keep them handy!

Step 3: Unit booking and receiving an Option to Purchase

Following the ballot, successful buyers will be informed and they can schedule an appointment to book their desired unit.

Once done, buyers will then have to pay an Option Fee amounting to 5% of the EC unit’s purchase price – do take note that this amount has to be paid in cash. In exchange, buyers will receive an Option to Purchase (OTP) from the EC’s developer, which is a legal document that grants a buyer the choice to purchase a property within a set option period.

In addition, buyers who wish to utilise their CPF Housing Grant and/or CPF savings will need to apply to the CPF Board at this stage too. Doing so will allow them to use said CPF monies for their downpayment as well.

Step 4: Hire a solicitor and finalise housing loan arrangements 

By this point, buyers will want to engage a solicitor (a.k.a. a lawyer) to handle the conveyancing process, which will involve lodging a caveat. Doing so ensures that no other interested buyers will be able to purchase their chosen property during the caveat’s validity (i.e., this is the legal equivalent of declaring: “I chope this unit.”).

This is also the stage where buyers should finalise their housing loan arrangements. As ECs cannot be financed using an HDB loan, buyers will have to search for a suitable mortgage package from a bank.

Step 5: Sign the Sales & Purchase Agreement and make stamp duty payments

The Sales & Purchase Agreement is a binding legal contract that documents the intentions and terms of a home purchase, and it will be provided by the EC’s developer when HDB approves a successful application.

Upon receiving a Sales & Purchase Agreement, the next steps for buyers would be to sign it and exercise the OTP. This step will require buyers to pay for the following:

• Booking Fee (5% of the EC’s price)
• Downpayment (15% of the EC’s price)
• Stamp duties (payable where relevant, e.g., Buyer’s Stamp Duty)

Once done, all that is left is waiting for the keys to a brand-new EC home!

How much can you borrow for an Executive Condominium purchase?  

If you are taking up a mortgage to pay for an EC purchase, the maximum amount that you can borrow is determined by the Loan-to-Value (LTV) limit.

Presently, the maximum LTV borrowing limit for an EC purchase is 75% for first-timer buyers who do not have an outstanding housing loan. This is also provided that the loan tenure is limited to 25 years, and does not extend beyond the age of 65 for the borrower.

Additionally, EC buyers who are taking up a bank loan are also subject to Mortgage Servicing Ratio (MSR) and the Total Debt Servicing Ratio (TDSR). These thresholds respectively determine how much of a borrower’s gross monthly income can be used to pay off a property loan (MSR of 30%) and all debt obligations (TSDR of 55%).

So, for instance, a family with a total household income of $16,000 and no outstanding loans will…

• Have a monthly housing loan eligibility of $16,000 x 30% = $4,800 based on the current MSR limit.
• Be able to allocate up to $16,000 x 55% = $8,800 for all loan repayments based on the current TDSR limit.
• Be able to borrow up to $1,005,000 for an EC on a 30-year bank loan, based on the maximum applicable LTV of 75% and a stress test rate of 4%.

How can you pay for an Executive Condominium?

Broadly, there are two ways that EC buyers can pay for their new home purchase: 1) the Progressive Payment Scheme (PPS) and the 2) Deferred Payment Scheme (DPS).

The PPS, also sometimes referred to as the Normal Payment Scheme, is a progress-based system where instalments are paid only when certain construction milestones are reached. For instance, when an EC attains its Temporary Occupation Period (TOP), a buyer will be required to make a payment amounting to 30% of a property’s value.

As for the DPS, it essentially allows buyers to push back the bulk of their repayments (usually 80% of the property’s value) until their EC achieves its TOP.

Table 2: Difference in payment between PPS and DPS for a $1.5m EC, assuming 75% of the loan is paid

While this approach typically results in the total repayment being 2 to 3% higher than the PPS, the DPS could prove valuable for buyers who wish to shore up their cash savings.

The same applies for parties with an existing home loan as the DPS will enable them to service one mortgage at a time, instead of juggling two.

What housing grants are available for Executive Condominiums?

Although EC purchases aren’t eligible for CPF/HDB Housing Loans, it’s still possible for buyers to qualify for the CPF Housing Grant – provided they satisfy the eligibility conditions.

There are two types of CPF Housing Grants available for EC buyers, the Family Grant and Half-Housing Grant.

The Family Grant is applicable to Singapore Citizen (SC) households as well as joint SC and Permanent Resident households, whereas the Half-Housing Grant is applicable for couples consisting of a first-timer (who hasn’t taken any housing subsidies) and a second-timer.

The average gross monthly household income (HHI) stipulated for different tiers of the Family Grant and Half-Housing Grant are summarised as follows:

Table 3a: Family Grant tiers based on average gross monthly HHI 

Table 3b: Half-Housing Grant tiers based on average gross monthly HHI 

So, should you buy an Executive Condominium? What are your options?

Between their attractive price points, comprehensive facilities, and eventual privatisation, ECs have plenty going for them! So, if you are a buyer who is in the market for a new home, these affordably-priced properties should most definitely be on your radar.

At present, there are not one, but three EC developments that buyers can take their pick from. These include:

Picture this: You end a long day of work, and step foot into the mega-development you call home. You are immediately greeted by the familiar sights and sounds of children frolicking about, enjoying their playtime in the estate gardens and the splash pools as the sun sets.

Their parents, who are watching closely, are chatting among themselves. Meanwhile, other residents are seated in an airy alfresco pavilion, catching up with their friendly neighbours over a delicious potluck dinner.

Not everyone may find such a view welcoming – but if you are drawn to the dynamic and vibrant nature of large, urban communities – life in a mega-development may just be the thing for you.

What is a mega-development condominium?

Mega-developments are condominiums that house 800 or more units. A prime example of a mega-development is the Treasure @ Tampines, home to an astounding 2,203 units. 

Mega-developments are generally seen as a fantastic option for owner-occupation properties. The expansive land area permits upscale amenities, while the significant number of units maintains a lower maintenance cost.

There are two current mega-developments available, located in District 15. Furthermore, 2024 will see a further three expected mega-development launches. These include a project in the Rest of Central Region (RCR) and two in the Outside Central Region (OCR). All three developments have 99-year tenures.

Table 1: Current and upcoming Mega-developments launching (2024)

Today, we explore the pros and cons behind living in a mega-development, and who are the buyers that will find value staying in one. 

Mega-developments offer more facilities – at a lower maintenance cost

There is an age-old saying: “The bigger, the better.” To a certain extent, this is true for large-scale residential projects in Singapore, particularly mega-developments.

Mega-developments occupy large sites, allowing for more common facilities. To illustrate, the Treasure @ Tampines houses 128 facilities, including an aqua aerobic pool and a trampoline courtyard. By contrast, the Alps Residences, another project within the same district (D18), has only 31 facilities.

Even though residents of mega-developments get to enjoy a wider selection of facilities, the maintenance fees payable tend to be on the lower end, as they benefit from economies of scale, with more residents contributing to maintenance fees. 

We conducted a study comparing the maintenance fees payable for three notable mega-developments to another three mid-sized developments within the same districts. Firstly, the three mega-developments offer up to an impressive 128 facilities. Secondly, residents of mega-developments could pay between 7% – 26% lower maintenance fees than mid-sized developments.

Table 2: Comparison of maintenance fee and number of facilities 

Mega-developments offer a vibrant and dynamic environment

Life in a mega-development is always vibrant and lively – there is never a dull moment as there is always something going on in the estate!

Mega-development condominiums offer a wide range of amenities. From common amenities such as swimming pools and exercise areas to unique offerings like jamming studios and virtual golf rooms, mega-developments have something for everyone.

This creates opportunities for interaction among community members. Young children will have no shortage of peers to socialise with at the many playgrounds and child play areas. Adults can enjoy the many fitness facilities and communal areas for work-from-home arrangements. Seniors in particular benefit from the vibrant community and activities to keep themselves active and occupied. This makes mega-developments a fantastic choice for multi-generational families.

Mega-developments are a fantastic property choice for people who enjoy hosting. From barbecue pits to tennis courts, the countless facilities found in a mega-development are sure to make guests of all ages feel welcome and entertained. 

There are also regular events and activities organized by the management corporation of these large developments. Fancy joining a Easter egg hunts or a Mid-Autumn Festival walk around the development and bonding with your neighbours at the same time? One can expect higher participation rate than in a regular condominium. This will provide management with more resources to plan these events, resulting in more frequent and larger scale events that provide fun and enrichment for residents.

Mega-developments make a worthwhile investment property

Mega-developments typically see a high number of transactions. This is due to the sheer number of units of various sizes and configurations available.

Given the size of these mega-developments, the likelihood of a transaction happening in the development is higher, as there are more units available. With higher sales frequency, we can expect healthier price growth.

Comparing our three earlier examples of mega-developments and smaller developments in the same district, we can conclude that mega-developments generally see better price growth.

Table 3: Comparison of Price Performance

A deeper dive comparing the two District 19 projects, The Gardens Residences and The Florence Residences (mega-development) further illustrates this. We can observe how the sheer number of units and transactions a mega-development can contribute to a healthy price growth.

Chart 1: Example of Mega-developments vs a smaller development in District 19

While mega-developments offer many upsides, there are a few cons that might make them unsuitable for some property buyers.

Privacy-conscious homebuyers may find mega-developments unsuitable

The first and most obvious drawback is the lack of exclusivity. Mega-developments may not be for you if you prefer a more private and quieter environment, as there is an almost perpetual state of activity going on, with people walking around, children playing, and noise being made.

There is also a higher likelihood of units being bought and sold within mega-developments. This leads to people constantly shifting in and out, and regular renovations, which might feel disruptive for residents. 

Buyers that idealise a private and quiet atmosphere would find something like a boutique development, which has less than 100 units more desirable to live in, as compared to the sprawling size of a mega-development.

Facilities might end up under-utilised or under-maintained

While mega-developments pride themselves on the large number of facilities they have to offer, they are not always in use by residents. This is especially true for less-used facilities (such as virtual golf rooms, or jamming studios), which often find themselves under-utilised and under maintained.

Popular facilities such as swimming pools or children’s playgrounds that see regular usage are also likely to degrade faster, requiring more frequent upkeep.

Due to the large size of these projects, it is not uncommon to see run-down areas, a side-effect of the struggle to keep such a large estate in good condition. This is especially true the older these developments get.

Mega developments are crowded and sometimes inconvenient

The larger number of people that stay in mega-developments results in more competition to use popular facilities. Tennis courts and function rooms often have to be booked in advance through an online process with limited slots. Free-use facilities such as lap pools and gyms are often be packed, especially during peak hours.

Residents might have to find themselves visiting these facilities at weird timings just to avoid the crowd, which takes away the convenience factor of having in-house facilities.

This aforementioned waiting time caused by crowds also spills into other common areas, notably lifts and parking areas. Lifts in mega developments are often slow, due to the sheer number of people that use them. Bear in mind that with more residents comes more food delivery riders, couriers, and movers, who all share the use of the same lifts.

Those who drive to work also feel the brunt of the crowd when leaving the compound in the morning. With a large number of people trying to leave the condo through the same egress points, residents are bound to run into ‘traffic congestion’ even before exiting the premises.

Is a Mega-Development Right for Me?

Based off these aforementioned factors, we can conclude that mega-developments are fantastic, value-for-money properties, both for owner-occupancy and as an investment property.

They make an excellent choice for families with children, as they have the most to benefit from the diverse range of facilities available right at their doorstep. Fancy the idea of an entire day of entertainment – without the need to leave the front gate!

The lively atmosphere inside these mega-developments also make them a fantastic option for older folks who are downgrading. Chock full of activities and amenities, they provide seniors with the activity level, friends and community needed to keep them engaged and to prevent them from feeling lonely.

These facilities have proven to evolve along with the needs of its many residents. A fantastic example of this are newer developments creating communal spaces that are conducive towards and can function as co-working spaces for people with remote working arrangements – a trend that is common these days.

Facility bookings are often done via smartphone apps nowadays, which adds to the ease of access and convenience that residents of these mega-developments can enjoy.

Offering a fantastic value proposition alongside a multitude of lifestyle factors built into the property itself, it is no wonder why mega-developments are on the rise, and why you should strongly consider one as your next property purchase.

To find out more about the upcoming mega-development launches, speak to an ERA Trusted Adviser today.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.