The Pros and Cons of Buying an Executive Condominium (EC)

Executive Condominiums (ECs) are a popular housing option in Singapore, offering a balance between affordability and private property living. However, they come with both advantages and limitations. If you're considering an EC, here are the key pros and cons to weigh before making your decision.

Pros of Buying an EC

1. MORE AFFORDABLE THAN PRIVATE CONDOMINIUMS

ECs are priced lower than private condominiums because they are subsidized by the government. This makes them an attractive option for middle-income households who do not qualify for Build-To-Order (BTO) flats but find private condos too expensive.

2. ELIGIBILITY FOR CPF HOUSING GRANTS

First-time buyers can enjoy CPF Housing Grants of up to $30,000, making ECs even more affordable compared to private condos, which do not offer such grants.

3. COMPARABLE FACILITIES TO PRIVATE CONDOMINIUMS

ECs come with similar amenities as private condos, such as swimming pools, gyms, function rooms, and security features, providing a comfortable and modern lifestyle.

4. POTENTIAL FOR CAPITAL APPRECIATION

After the 5-year Minimum Occupation Period (MOP), ECs can be sold to Singaporeans and PRs. After 10 years, they are fully privatized and can be sold to foreigners, often leading to significant price appreciation.

5. NO ADDITIONAL BUYER’S STAMP DUTY (ABSD) FOR UPGRADERS

HDB upgraders purchasing an EC don’t need to pay ABSD upfront, unlike those buying private properties while still owning an HDB flat.

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Cons of Buying an EC

1. INCOME CEILING LIMIT

To qualify for an EC, your combined household income cannot exceed $16,000 per month. This limits accessibility for higher-income earners who may have to look at private properties instead. There is room for appeal even if your income exceed $16,000.

2. LONGER WAITING TIME FOR NEW ECS

New ECs take about 3 to 4 years to be built, similar to BTO flats. Buyers who need immediate housing may find this waiting period inconvenient. However during sales, foundation already completed. It would take another ~2.5 years to TOP.

3. MINIMUM OCCUPATION PERIOD (MOP)

ECs have a 5-year MOP, meaning you cannot sell or rent out the entire unit during this period. If you need flexibility, this could be a drawback. Similar to BTO 5 years. For private there is a Seller Stamp Duty (3 years).

4. BANK LOAN REQUIREMENT

Unlike HDB flats, ECs do not qualify for HDB loans. Buyers must take a bank loan, which requires at least 25% down payment (5% cash + 20% CPF or cash), which can be a financial strain for some. EC Deferred payment scheme, allows buyers to take up bridging loan to make up the shortfall. 

5. LESS PRIME LOCATIONS

Most ECs are located in non-mature estates such as Tengah, Sengkang, or Punggol. While these areas are developing, they may not have the same level of convenience and amenities as mature estates. New estates are often more innovative and offer better facilities than mature ones.

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Conclusion

Buying an EC is a great option for those looking for a balance between affordability and private property living. While it offers attractive benefits such as government grants, lower prices, and strong capital appreciation, buyers must also consider factors like income eligibility, loan restrictions, and MOP requirements.

If you're considering an EC, weigh these pros and cons carefully to see if it aligns with your financial situation and long-term goals.