Executive Condo vs. BTO: Which is the Best Option for You?

As Singaporeans, owning a property is an important milestone in our lives. However, with the abundance of options available, it can be overwhelming to decide which type of property to invest in. Two popular choices amongst Singaporeans are executive condominiums (ECs) and Built-to-Order (BTO) flats. While both may seem similar on the surface, there are significant differences that potential buyers should be aware of before making a decision.

In this blog post, we’ll explore the differences between executive condo vs BTO and help you decide which one is right for you.

Executive Condo vs BTO

In this article, we explore the differences between Executive Condo (EC) and Build-to-Order flats (BTO) when it comes to purchasing affordable housing in Singapore. As mentioned, BTOs have a lower income ceiling and attract families who earn less. ECs, on the other hand, are designed for higher-income earners who can afford more than HDB flats but find private property out of reach. While both options offer great value, understanding the differences between the two can help prospective home buyers make an informed decision. In the next sections, we will compare pricing, eligibility, resale options, financing options, location, and investment potential of ECs and BTOs to provide a comprehensive analysis for readers.

Which is more affordable?

When deciding between Executive Condos (ECs) and Build-To-Order (BTO) flats, price is often a deciding factor. ECs are typically cheaper than private condos by about 20%, but how do they compare to BTOs? BTOs have lower barriers to entry because they are cheaper compared to ECs, with a four-room BTO flat starting as low as $200,000. However, ECs still offer a more affordable option than private condos. The legal fee for BTOs is lower compared to ECs but this is offset by their higher upfront cost. A key difference is that BTOs offer a wider selection of locations, whereas ECs are limited to certain areas. Overall, a BTO might be more affordable in the short-term, but an EC might be worth the added cost for the additional amenities and features they offer. Ultimately, the decision will depend on one’s financial situation, priorities, and eligibility criteria.

Difference between ECs and BTOs

The difference between Executive Condominiums (ECs) and Built-to-Order (BTO) flats is not just in their price range but also in who builds them. While BTOs are constructed by HDB, ECs are built by private developers with all the frills of a private condo. In fact, ECs are a “sandwich class” property, generally costing more than BTOs but not as much as private properties. Moreover, an EC is a full-suite condo that comes with a 99-year leasehold. The land cost for ECs is, therefore, cheaper than freehold properties, resulting in more affordable prices. On the other hand, HDB loan applicants are not eligible to buy an EC, which means taking up a bank loan with a higher downpayment. Therefore, knowing who builds these properties might help homebuyers who are trying to weigh their options.

Features & Amenities

When it comes to features and amenities, Executive Condominiums (ECs) typically offer more luxurious options like swimming pools and gyms in comparison to Build-to-Order flats (BTOs). However, BTOs have their own set of facilities such as communal spaces and playgrounds that can be equally valuable. It’s important to consider which amenities are important to you and your lifestyle before making a decision between ECs and BTOs. Additionally, ECs tend to be more spacious and comfortable than HDB flats, while also being more affordable than private condos. Ultimately, the choice between ECs and BTOs comes down to personal preferences and financial capabilities.

Eligibility Criteria

When it comes to eligibility criteria, there are some differences between ECs and BTOs. For ECs, at least one of the applicants must be a Singapore Citizen, and at least one other applicant can be a Singapore Permanent Resident. Couples who are first-time applicants and apply for an EC can get up to $30,000 worth of CPF housing grants. Additionally, their combined income must not exceed the household income ceiling of $14,000 to $16,000. BTOs, on the other hand, are only available to Singapore Citizens or Permanent Residents, and the combined income ceiling for first-time applicants is $14,000. Both ECs and BTOs have a minimum age requirement of 21 years old, and applicants must not have owned another property before. It’s important to meet the eligibility conditions to buy either an EC or BTO unit from a property developer.

Resale Market

When it comes to the resale market, there are differences between Executive Condos (ECs) and Built-to-Order (BTO) flats. BTO flats have a lower resale price due to their lower entry barrier, which means that they are more affordable than ECs. ECs, on the other hand, have a higher resale price due to their better location and superior features and amenities. Additionally, after their 5-year Minimum Occupation Period (MOP), BTO flats can be sold to anyone, while ECs can only be sold to Singaporeans and Permanent Residents (PRs) until their 10th year. That said, both ECs and BTO flats offer investment potential, with BTOs having the highest potential for appreciation and a higher margin cost. Overall, the resale market offers different options for those looking to invest in property, and it is important to consider one’s eligibility, preferences, and goals before making a choice between ECs and BTOs.

Financing Options

When considering your options for buying a home in Singapore, it’s important to understand the financing options available. For first-time buyers, both Executive Condos (EC) and Built-To-Order (BTO) flats offer CPF Housing Grants to make homeownership more affordable. However, EC buyers have access to both the Family Grant and Half-Housing Grant, while BTO buyers have access to the more modest Family Grant. It’s also important to note that EC buyers are not eligible for HDB loans and must secure financing through a bank loan, which is subject to Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR) regulations. When comparing ECs and BTOs, it’s important to consider both the upfront costs and long-term affordability of each option.

Location

When it comes to location, Executive Condos tend to be located slightly further away from central areas compared to BTOs. However, this doesn’t necessarily mean they’re less accessible or convenient. ECs are often built near MRT stations or major expressways, making it easy for residents to commute to work or school. Plus, they typically offer a range of facilities and amenities within the development, such as shopping malls, food centres, and schools. BTOs, on the other hand, may offer a more central location but may not have as many amenities nearby. Ultimately, the location that’s best for you depends on your lifestyle and priorities. Do you place more importance on proximity to your workplace or amenities? Consider your options carefully before making a decision.

Investment Potential

When it comes to investment potential, both Executive Condos (ECs) and Build-To-Order (BTO) flats have their advantages. However, compared to BTOs, ECs tend to offer a higher potential for appreciation and a higher margin cost.

To put it simply, ECs can offer a better return on investment due to the fact that they can be sold on the open market after the minimum occupancy period has lapsed, making them a more attractive option for those looking to make a profit in the long run. Additionally, the capital appreciation of ECs can be quite significant after the five-year minimum occupation period or upon privatization. Therefore, buyers who are looking to invest in property and make a profit down the line may find that ECs offer better value than BTOs. However, it is important to note that this is just a general guideline and each individual’s investment goals and financial situation will ultimately determine which option is best for them.

Which to choose?

After reviewing the various factors that impact the decision between an Executive Condo and BTO, it ultimately comes down to personal circumstances and preferences. If affordability and flexibility are the priority, then a BTO makes more sense. However, if one is willing to commit financially for the potential of a future high returns and premium lifestyle amenities, an EC may be more suitable. It’s important to weigh up the costs and benefits of both options and seek advice from professionals before making a decision. Nonetheless, with a robust economy and property market in Singapore, both EC and BTO remain attractive options for those looking to own their first home.