The demand for private housing in Singapore continues to increase steadily. According to Urban Redevelopment Authority (URA), the number of executive condominium units sold increased from 492 in March 2016, to 572 by March 2017. This is a 16.2% increase, a number partly associated with low-interest rates climate and rising income growth in the country. More executive condos are under construction to cater the increasing demand.
In Singapore, executive condos were introduced by the government in 1999. They are built and managed by private investors but come at a lower price thanks to the subsidies by the government. If you are planning on owning a condo in Singapore, you need to consider the following factors.
General eligibility is the first and most crucial factors to consider when purchasing an executive condo in Singapore. Overlooking this factor will make it pointless to look at other factors below. The government has set requirements that are not so easy to meet in order to curb the increasing demand for this type of house in Singapore.
- At least 35 yrs. old, if applying under the Joint Single Scheme
- At least 21 years old
- You do not own other house be it overseas or locally, and have not disposed any within the last 30 months.
- You have not bought a new DBSS flat or received a CPF Housing Grant before
- Singapore citizen
- All singles be Singapore citizens if applying under the Joint Singles Scheme
- At least 1 other applicant must be a Singapore Permanent Resident or a Singapore Citizen
- Family nucleus
- Joint singles scheme
- Public scheme
- Fiancée/fiancé scheme
- Orphan scheme
Executive condos are meant to cater for the needs of families whose household income exceed the ceiling for public housing but fall short to afford a private property. Majority of executive condos buyers in Singapore have an income of approximately $10,000 and are looking forward to maximizing the CPF grant amount.
Since Dec 2013, (Housing and Development Board) HDB announced that executive condo buyers are to pay Resale Levy. This is a mandatory amount of money paid to the HDB when purchasing a second subsidized home. This money applies to ECs launched after Dec 9, 2013.
Selling your executive condo
As the real estate gurus say ‘Begin with the end in mind’. When buying a property, it’s essential to know what it entails if you plan to sell it in the future. ECs are different from HDB regarding:
There is a minimum occupancy period of at least 5 years for direct purchase. This means you cannot sell or rent out the condo entirely within this time frame.
After the 5 years, the condo can only be sold to either Singaporeans or Singaporeans Permanent Residents.
After 10 years, you are now free to sell the condo to foreigners.
These limitations have been put in place to bar out real estate moguls to turning government housing into investment opportunities.
Executive condo prices
Executive condos bare considered private development with most of the condominium facilities and a more attractive price. The cost of these executive condos is much 25%-30% lower compared to prices of a private condo.
Looking at above the factors and amenities available in condos, executive condos are a privilege for the locals. If you meet the government criteria, it’s always a good idea to go for this type of house. However, you still need not to stretch beyond your financial abilities.