While the term ‘build-to-order flats’ (BTOs) seem to be on everyone’s lips these days, they are not the only affordable public housing option available. Executive condominiums (ECs) have been steadily growing as a popular choice among homeowners these days, especially for those who want to enjoy the amenities usually found at a private condominium, at a subsidised price. If you’re one of those considering to make a purchase on ECs, here are some factors to consider first.
- Check for your eligibility
Because ECs technically fall under the public housing umbrella under HDB, there are quite a number of boxes you’ll have to check before being eligible to make a purchase. Generally, homeowners have to be at least 21 years of age, a Singapore citizen, and must have not own another property locally or overseas within the last 30 months. Meanwhile, as ECs are meant to cater to the needs of the ‘sandwich’ class – meaning those who exceed the income ceiling for public housing, but who can’t comfortably afford a private property – your average gross monthly household income must not exceed $14,000.
- You’ll get all the frills of a private condo
As ECs are built by private developers, you can expect your home to come with the same amenities and standard fittings and finishes that private condos boast. These include swimming pools, a well-equipped gym, barbecue pits etc. in the communal spaces; and new flooring, built-in kitchen and bathroom fittings, wardrobe units, electrical points, air-conditioning etc. inside the unit. The provision of such items also has an impact on your renovation cost and move-in date. For example, if you don’t require any major renovation works to be done, what’s left is to install light fixtures to get the house ready for moving in, saving you time and money in the process.
- Be wary of the maintenance fees involved
As ECs come with the aforementioned benefits like a swimming pool and guarded security, the residents will be required to pay a maintenance fee every month for the upkeep of the communal facilities, overall maintenance and usage charges. This is called the condo conservancy fee, and is typically priced around $200. However, do note that if you’re staying in a development with fewer residents, the maintenance fees you’ll be required to pay can become significantly more than the average.
- Note the type of grants and loans available
Unlike HDB purchases where the HDB Concessionary Loan is available, buyers of ECs can only finance their unit with a bank loan. This means that you’ll be able to get a loan of up to 80% of the property value, and the remaining 20% will be split into a 5% downpayment in cash terms, and a 15% downpayment from grants or your CPF. It is also important to note that all bank loans taken out are subjected to a 30% Mortgage Service Ratio (MSR), meaning that buyers can only use up to 30% of their monthly income to repay the mortgage. The good news, however, is that first-time buyers of ECs can apply for the CPF Family Grant and receive up to $30,000, depending on your household income.
- The unit will be considered private property after 10 years
Under HDB resale rules, only Singapore citizens and PRs are eligible to purchase public housing. But for the case of ECs, while they start out as subsidised public housing, they will eventually become listed as private property after 10 years. From then on, the units can then be sold to foreigners and even organisations. While it may not seem like a big deal, this change is especially beneficial to owners who might want to sell their unit, as the pool of prospective buyers will be widened and the odds of selling at a profit increased.