When it comes to buying a home in Singapore, there are two main options: a condominium or an executive condominium (EC). While both types of properties share some similarities, there are also key differences that buyers should be aware of before making a decision.
One of the primary differences between a condo and an EC is the eligibility requirements. Condos are available to anyone who can afford them, regardless of income level. In contrast, ECs are designed specifically for middle-income families who may not be able to afford a private property but exceed the income ceiling for public housing. There are also restrictions on who can purchase an EC, with buyers required to meet certain criteria related to citizenship, family nucleus, and income.
Another key difference between condos and ECs is the pricing. Generally, ECs are priced lower than private condos, making them a more affordable option for many buyers. However, ECs also come with certain restrictions, such as a minimum occupancy period and resale levy, that buyers should be aware of before making a purchase.
Difference Between Condo and Executive Condo?
In Singapore, the distinction between a condo and an executive condo (EC) lies in the eligibility criteria and the minimum occupation period (MOP). Condos are exclusive private properties, whereas ECs are hybrid dwellings developed and marketed by private developers but governed by HDB regulations for the initial ten years of ownership. The objective of ECs is to accommodate the “sandwiched class” of Singaporeans who earn too much to qualify for public housing but not enough to purchase private property.
To procure an EC, buyers must satisfy certain income and citizenship requirements. Furthermore, ECs have a 5-year MOP, during which the owners cannot sell or lease out their units, whereas private condos have no minimum occupation period. Following the MOP, ECs can be sold to Singaporeans and permanent residents, and foreigners may purchase them after 10 years.
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What is a Condo?
A condominium, or condo for short, is a type of housing that is similar to an apartment but is individually owned. In a condo development, each unit is owned by an individual, while the common areas, such as the swimming pool or gym, are jointly owned by all the unit owners. Condos can be found in both private and public schemes.
A private condo is a type of housing that is privately owned and managed. It is usually more luxurious and expensive than public housing. Private condos can be freehold or leasehold, and are often found in prime districts of Singapore. They are usually sold at a competitive price, and can provide rental income for the owner.
A public condo is a type of housing that is subsidized by the government. It is similar to private condos in terms of facilities and amenities, but the selling price is lower. Public condos are usually sold under a public scheme, such as the Executive Condominium (EC) scheme, and are subject to a Minimum Occupancy Period (MOP) of 5 years. After the MOP, the condo can be fully privatised and sold on the resale market.
Types of Condos
There are different types of condos available in Singapore:
- Private Condominium – privately owned and managed
- Public Condominium – subsidized by government
- Executive Condominium – hybrid between public and private housing, subject to MOP
There are also different payment schemes available for buying a condo:
- Progressive Payment Scheme – payment made in stages as construction progresses
- Deferred Payment Scheme – payment made in full after a certain period of time
When buying a resale condo, there may be additional costs such as a resale levy, which is a fee paid to the government when buying a second subsidized housing unit. Joint Singles Scheme is available for singles who wish to buy a condo together.
Overall, condos provide a luxurious living experience with access to facilities and amenities. They can be a good investment for those looking for rental income or resale property.
What is an Executive Condo?
An Executive Condominium (EC) is a type of public-private housing hybrid in Singapore that is designed to cater to the sandwiched middle class. ECs are built and sold by private developers, but the land is initially sold by the government at a subsidized rate. This means that ECs are more affordable than private condominiums, but more luxurious than HDB flats.
ECs are unique to Singapore and were introduced in 1994 to cater to the housing needs of the sandwiched class – households that earn too much to qualify for HDB flats but cannot afford private condominiums. ECs are built and sold by private developers, but the land is initially sold by the government at a subsidized rate. This means that ECs are more affordable than private condominiums, but more luxurious than HDB flats.
To be eligible to purchase an EC, you must be a Singapore citizen or a Singapore Permanent Resident (PR) who forms a family nucleus with at least one other Singapore citizen or PR. The combined gross monthly household income must not exceed S$16,000, and you must not own any private property in the past 30 months.
Types of Executive Condos
There are several types of ECs available in Singapore, such as Piermont Grand and Parc Canberra. ECs come with a range of facilities, such as swimming pools, gyms, and function rooms. They are usually located near MRT stations and other amenities for convenient living.
ECs also come with a Minimum Occupation Period (MOP) of five years, during which owners cannot sell or rent out the whole unit. However, owners can rent out individual rooms, subject to HDB’s rules and regulations. After the MOP, owners can sell their ECs on the open market to Singaporeans and PRs, or to foreigners after a 10-year period.
ECs are an affordable housing option for first-time homebuyers, as they are eligible for CPF Housing Grants and HDB loans. However, buyers should also consider the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) when financing their EC purchase.
What are the Differences Between Condo and Executive Condo?
Condominiums are private residences that can be owned by individuals, families, or corporations. Executive Condominiums (ECs) are a type of public housing that is subsidized by the government and can only be owned by Singaporean citizens or Permanent Residents (PRs) who meet specific eligibility criteria.
To be eligible to purchase an EC, the buyer must be a Singaporean citizen or PR, have a household income of no more than S$16,000 per month, and have not owned any private property in the past 30 months. There are no such restrictions for purchasing a condo.
ECs are generally priced 20-30% lower than comparable condos due to the government subsidy on land costs. However, ECs also come with a Minimum Occupancy Period (MOP) of 5 years during which the unit cannot be sold or rented out. After the MOP, the unit can be sold to Singaporeans or PRs only and a Resale Levy must be paid to the government. Condos do not have a MOP or Resale Levy.
Both condos and ECs offer a range of facilities such as swimming pools, gyms, and playgrounds. However, condos may have more extensive and luxurious facilities due to higher maintenance fees paid by residents.
Mortgage and Financing
Buyers of both condos and ECs can obtain financing from banks or financial institutions. However, the loan-to-value (LTV) ratio for ECs is lower than that for condos, meaning that buyers of ECs may need to make a larger down payment.
Minimum Occupancy Period and Resale Levy
As mentioned earlier, ECs have a MOP of 5 years and a Resale Levy must be paid when the unit is sold to Singaporeans or PRs. Condos do not have a MOP or Resale Levy.
Which One Should You Choose?
Choosing between a condo and an executive condo can be a difficult decision. To help make the decision easier, there are a few factors to consider:
Factors to Consider
One of the most important factors to consider is affordability. Executive condos are generally more affordable than private condos, but they come with certain restrictions, such as a minimum occupancy period and income eligibility requirements. Private condos, on the other hand, have no restrictions, but they are generally more expensive.
Another factor to consider is location. Private condos are often located in prime areas, close to amenities and transportation, while executive condos are usually located in less central areas.
Lastly, it is important to consider the long-term value of the property. Private condos tend to appreciate in value over time, while executive condos may not appreciate as much due to the restrictions on resale.
Personal preferences also play a role in the decision-making process. For example, some people may prefer the amenities and facilities offered by private condos, while others may prefer the sense of community and security offered by executive condos.
It is also important to consider lifestyle factors, such as whether the buyer plans to live in the property long-term or use it as an investment property. Private condos may be a better option for investors, while executive condos may be a better option for those looking for a long-term home.
Ultimately, the decision between a condo and an executive condo depends on a variety of factors, including affordability, location, long-term value, personal preferences, and lifestyle factors. It is important to carefully consider all of these factors before making a decision.