ECs are a hybrid of private and public housing, and they are much cheaper than private properties. This makes them a good investment, especially when compared to the prices of private properties. In this article, we’ll look at the pros and cons of ECs, as well as how they compare to private properties.
ECs are a hybrid of public and private housing
ECs, or Extended Conversions, are a hybrid form of public and private housing in Singapore. They are similar to private developments, but are overseen by the Housing and Development Board. Generally, an EC will be a gated compound with security. It will also feature amenities maintained by a management corporation, called a strata title.
These units are designed for the middle class of Singaporeans, providing an affordable middle-ground between HDB flats and fully private condominiums. They feature typical condo frills at an affordable price. ECs are extremely popular in Singapore. One recent project, North Gaia, attracted 3,500 people during its preview weekend in April 2022. The developer Tenet expects a good performance, too.
In addition to affordable prices, ECs also feature a high level of amenities. Compared to private condos, ECs are up to 20% cheaper. Buyers can also take advantage of HDB’s CPF grants to offset the price. But buyers must be aware that ECs come with a five-year MOP, and the buyer cannot dispose of the property during this time.
They are cheaper than private properties
ECs are more affordable than private property prices in Singapore, largely because they are located in suburbs, some distance from town centers, and without the inflated land costs that come with prime property. As an island nation, Singapore is home to over 5 million people, and land is scarce. That means executive condos are built in far-flung locations to keep the prices down. This means that you will get a better return on your investment.
ECs are not available in all areas, so they are often in more remote areas. Typically, ECs are not near MRT stations or bus interchanges. If you are interested in buying an EC, it is important to know that HDB does not grant loans for ECs, so you will need to obtain a private loan to finance the purchase. This loan will be subject to strict lending criteria, with a maximum loan amount of 75% of the property value.
They are a good investment
The prime areas for private property in Singapore are expensive, and ECs are in the suburbs. This makes them a good investment. You can wait 10 years to sell your EC, but that won’t increase its price much. If you are a foreign investor, you may want to consider buying a new private property instead. However, if you are a foreigner, you will need to pay an additional 30% Additional Buyer Stamp Duty when buying an EC.
Private condominiums are ideal for long-term investment and holding. The price difference between ECs and private properties is minimal, and you can sell your private condominiums within a short period of time, depending on the market.
They are located in ‘ulu’ areas
Despite the increasing cost of living, EC prices are still relatively low compared to private condominiums. The lower prices are mainly due to the lower land cost and less crowded areas. In addition, ECs are often located further away from the city, town centres, and MRT stations.
ECs are often built in outskirts of Singapore, where land costs are lower. They are also often not located near bus interchanges or MRT stations, making them a more affordable choice. However, the lack of a convenient location means that ECs are not HDB-approved, meaning that buyers must seek a loan from a bank to purchase them. The loan-to-value ratio is typically seventy-five percent.
They are not close to MRT stations
There are several reasons for EC prices to be higher near MRT stations. Firstly, proximity to MRT stations has a positive impact on the rental and sales of properties. Many tenants choose properties close to the MRT for their convenience. And the perception of proximity to the MRT is positive as well, since it increases the demand for these properties. Furthermore, proximity to MRT stations has also been linked to higher property appreciation.
Secondly, ECs are located in areas with cheaper land. Typically, these are located in the outskirts. This is why you will find ECs that are far away from MRT stations and bus interchanges. Lastly, ECs do not come with a HDB loan. You will have to borrow money from a bank to purchase an EC. Generally, banks lend up to 75% of the valuation of the property.