In Singapore’s property market, executive condominiums (ECs) have always been seen as being the best of both worlds of public and private housing. Whether you’re a newlywed thinking of applying for an EC for your first home, or a current homeowner looking to upgrade to one, here’s everything you need to know about living in an EC; the good and the bad, as told by a first-time homeowner (me!) who has lived in an EC for close to 5 years now.
Make no mistake: ECs are almost just as popular as private condos, if not more so. This is because they somewhat encompass the best of both worlds: the affordability of public housing, and the luxuriousness of private housing.
Hundred Palm Residences over in Yio Chu Kang, which sold out in 7 hours on opening launch day.
Image from: Hundred Palm Residences
If past sales data is anything to go by, ECs have seen their fair share of overwhelming interest from Singaporeans. For instance, the Hundred Palms Residences EC along Yio Chu Kang Road was completely sold out within 7 hours on opening day back in July 2017. According to reports, it attracted over 2,700 applications for its 531 units, making it the most oversubscribed EC in Singapore’s history.
One of main draws of an EC is that if you’re a first-time homeowner, you’ll be entitled to some CPF Housing Grants for Executive Condominiums. On the other hand, private condos won’t have such grants available. As such, ECs offer that value proposition in having all the features of a private condo, but priced slightly cheaper and also having the availability of grants to lower its selling price further.
Take note that the maximum grant amount you can possibly get for an EC is $30,000. This is a far cry from the total possible amount you can get for a new BTO ($80,000), but it’s definitely better than nothing.
Image credit: HDB
Of course, going for an EC for your first home isn’t an option for everyone. They are, after all, priced significantly higher than an equivalent BTO, and so you’ll have to take into account your ability to finance your housing loan for the foreseeable future.
To give you an idea of the differences in prices, I purchased a 4-bedroom EC in Canberra for over $800,000; a relatively similar 5-room HDB BTO in the vicinity would cost just upwards of $350,000. The reason why we chose an EC was because we wanted a home that was spacious enough to accommodate any kids we might have in the future, while also having the potential to sell it for a modest profit in the future.
The decision was also compounded by the fact that we were pretty bummed about not scoring a BTO after 3 tries. And why Canberra you might ask? Mainly because it was conveniently located close to where our parents live, but also because we were attracted to how the estate would be developed and transformed over the next few years.
So who should consider an EC for their first home? Well for one, if you and your partner are high earners, then an EC might just be the only option for you. Families with a monthly household income of over $14,000 are not eligible for a BTO, and so an EC would be the next best option if you’re gunning for a new development. That being said, the income ceiling for an EC is $16,000, so if you earn too much, your only options are either a resale flat or private property.
Potential for capital appreciation
Another positive of ECs is that they are good investment vehicles in the long run. This was certainly a point that I factored in while deciding to apply for my EC.
In case you’re unfamiliar with the rules, ECs have the same 5-year Minimum Occupation Period (MOP) as a normal BTO, and so can only be sold after that to Singaporeans and permanent residents(PR) only. Once your EC hits 10 years it becomes fully privatised, and you’ll be able to sell it to foreigners in the open market. Comparatively, private condos have no such restriction.
A study by the URA and OrangeTee Research revealed that the difference in prices between a private condo and an EC is about 20%, which can largely be attributed to the sales restrictions imposed for ECs.
However, after MOP the price gap narrows to just around 9%, and gets lower upon privatisation. So, you can almost think of ECs as being a discounted private condo, which means more room for profits in the long run.
So what makes ECs great investment options? For one, the MOP means that there is a healthy amount of time for the property’s value to appreciate. ECs are also generally built in areas scheduled for redevelopment by the URA, and so the surrounding estate’s transformation would generally result in an overall increase in property value in the vicinity. Coupled with the limited supply of EC units in the market – and the more plentiful supply of HDB units – ECs would typically see a modest appreciation in value over time compared to HDB BTOs.
Facilities like gym and pool
Naturally, the main selling point of condos has to be the variety of facilities within the estate that residents can enjoy. Most, if not all, of the condos will have the usual swimming pool, tennis court, gym, function rooms and BBQ pits.
In addition, some condos may have slightly more unique features; for instance, my EC has an actual KTV room equipped with a sound system, allowing us to have a Teo Heng session right at our doorstep. I’ve also seen other condos with slightly more uncommon facilities like a basketball court or even a steam room.
Image credit: Michael De Roza
In my opinion, it would be a waste if you don’t plan to use these facilities at all, and in that case, you’d be better off purchasing a HDB with such amenities nearby. This is because you’ll be indirectly paying for the maintenance of these facilities through your monthly condo fee – the EC equivalent of your HDB Service & Conservancy Charges – and so it can be pretty pointless if you’re paying for these facilities but not actually using them.
How much you’re expected to pay for your EC’s monthly maintenance fee largely depends on a couple of factors such as your condo’s management and sinking fund, the size of your unit (larger units pay more), and the overall land space of your condo.
For reference, I’m paying about $325/month for my 1,140sqft home, which works out to be around $3,900/year. Fortunately, I use the swimming pool and gym quite often, and so I’m getting the best bang for my buck.
Collective decision making by residents
Fortunately – or unfortunately, decisions about the condo are collectively made by the residents, led by the Management Corporation Strata Title, or MCST. The MCST consists of an elected committee formed by residents, and they’ll work with a professional company whose main job is to run the daily affairs of the condo.
There’ll also be things like an Annual General Meeting where residents are expected to vote on several matters, like the election of the next council and important resolutions to be passed. I guess you can think of it as a mini country?
Image credit: TheSmartLocal
Because residents all have a say in the management of the condo, there can be a good amount of arguments and bickering over certain issues and facilities, some of which can turn rather nasty, especially on social media. Having been elected into my EC’s MCST for almost a year now, here are some of the issues that we’ve experienced people arguing about:
- Complaints about dogs pooping/peeing on the grass, and how their owners should be fined for their pets doing so
- How many parking lots a unit entitled to, and if residents should pay to be entitled to a second lot
- How long are people allowed to use the car washing bay for (one resident even claimed he washes his car 4 times a week!)
- For residents who don’t use facilities like the gym/swimming pool or even own a car, if they should have lower monthly fees because it wouldn’t be fair to them
- If there should be a ban on playing mahjong after a certain time
- How the splashes of someone swimming are “excessively noisy”
Image credit: Marcus Sia
From my experience, there’s also a fair amount of politicking that can happen, simply due to the nature of how the leadership of the condo is decided through elections, and also because condo residents would tend to see and interact with each other more than, say, residents in a typical HDB block.
Depending on current dynamics, it’s not uncommon to hear of ‘challengers’ criticising the incumbent incessantly, or the formation of ‘parties’ amongst residents to campaign and rally for votes come election time. It hasn’t happened to my condo yet, but I’ve even heard of no confidence motions being tabled for existing management councils in other condos. Pretty nasty business, if you ask me.
Personally, while I’m not too fazed by such disputes, if left unresolved I would imagine it could have more serious implications in the long run. For one, the level of distrust or animosity will certainly ruin the overall mood within the condo, and if word spreads to potential homebuyers, it could also affect the value of the condo.
A flea sale run by kids in the condo.
Image credit: Kelvid Pang
On the whole, you would want harmonious living with your fellow residents, rather than a constant state of unease and unhappiness.
The 5-year MOP and 10-year privatisation of ECs can also be somewhat of a hindrance. After all, you’re essentially locking yourself in for at least 5 years, and so you won’t have the flexibility to move around in the event of lifestyle changes, such as finances or new additions to the family. Those looking to invest will also have to contend with owning the property for 5 years, which won’t be a problem for private condos as they can easily sell it whenever they want.
Image credit: TheSmartLocal
Another unfortunate situation to consider is if couples divorce before MOP. While they can still jointly own the property, I’d reasonably assume most would want to let go of the property just for finalisation and closure over the divorce.
Assuming neither party is eligible for full ownership of the unit, they can appeal to the HDB to sell it before MOP, but these requests are assessed on a case-by-case basis, and there is certainly no guarantee.
What’s it’s been like living in an EC for 5 years
Having lived in my EC for close to 5 years, I’d say it’s been an overall positive experience for my wife and I. Admittedly, the purchase price of our home was relatively steep, considering we’d only been working for four years when we signed the papers.
However, we’re extremely thankful to be quite comfortable in our financing of the mortgage, and are definitely appreciative of the modest profit we’ll get when we eventually sell our home.
If you’ve read through this and you’re more or less set on purchasing an EC, there’s some good news: apart from the already launched North Gaia, there are 3 other ECs scheduled to be launched this year, in Tengah, Tampines North and Bukit Batok. Be sure to do your homework – especially regarding finances!
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Cover image credit: Hundred Palm Residences, TheSmartLocal