Can Executive Condominium Really Make Money?

Mar 11, 2020

When we talk about hybrid housing, the first thing that comes across our mind will be none other than our local identity ​—​ The Executive Condominium, known as EC to many.

While everyone is looking to break into the world of real estate investment, many people question the potentials of ECs. Are you one of them who wish to find out if EC is a profitable asset? if yes, don’t miss out on this post.

Before we go on with our analysis, here’s what we need to know:

  1. EC follows the rules & regulations of HDB, where owners are required to fulfil 5 years minimum occupation before they can put up their unit for sale.
  2. The 5 years benchmark:​ Sale upon M.O.P
    Owners can sell to Singaporean or Permanent Residents in the resale market.
  3. The 10 years benchmark:​ Sale upon Privatised
    Owners can sell to Singaporeans, PRs or even Foreigners (which has a larger market).

The prices of Executive Condominium does catch up with the Private Condominiums after the initial 5 years M.O.P, and statistically proven to gain further upon fully privatised.

Based on the total of 21 privatised ECs, all developments have received a solid track record on the capital gain. Of which, 10 projects received a profitable gain between 46% to 166% (check out the slides to find out more).

This is largely due to the subsidies and lower prices of an EC compared to a private condo. The initial purchase price of an EC is typically 20% less compared to a private condo. With the gap of the sale price narrowing to 9% and 5% respectively upon M.O.P and privatisation, the strong capital gain is almost a definite win.

And u​nlike the private condo counterpart, the supply of ECs is limited, the only source of new EC sites is from the Government Land Sales Programme, which made it exceptionally in demand.

However, not all ECs are equal. It is highly dependent on the location, available surrounding supply and price, the rate of capital appreciation can differ drastically between projects.

Given the solid track record of existing EC projects in terms of capital appreciation, now it is your turn to decide their worth. Did you miss out on the recent EC launches? Drop me a message or comment below to receive the latest EC launches with up to date information.

My name is Jen Tan, and I hope to share more insights with you. Cheers!