The Executive Condominium (EC) housing model, a unique concept in Singapore, was introduced in 1995 by then-Prime Minister Goh Chok Tong to address the aspirations of those seeking private property ownership while remaining within an attainable price range.
 

ECs offer a compelling proposition for Singaporeans, providing the prestige, privacy, and amenities associated with private condo living at a more affordable price point. To ensure accessibility, many new EC projects are strategically located within developing housing estates. However, this privilege comes with certain conditions. EC buyers are subject to a monthly household income cap of S$16,000 and a mandatory five-year Minimum Occupation Period (MOP). Following the MOP, resale is restricted to Singapore citizens and permanent residents. After 10 years, the EC can be fully privatized, allowing for unrestricted resale, a significant factor contributing to its popularity among first-time homebuyers.

Most EC purchasers fall within the S$14,000 to S$16,000 monthly household income bracket, a segment ineligible for Build-to-Order (BTO) flats and often faced with the choice between the HDB resale market and private property. To further incentivize first-time buyers, priority allocation is granted for EC purchases.
 

The attractive price point of ECs compared to private homes has consistently driven strong sales. Recent launches, such as Altura and Lumina Grand, achieved impressive sales figures, with 61% and 53% of units sold respectively during their launch weekends.
 

Over the years, EC owners have consistently reaped significant financial rewards, benefiting from the appreciation of property values. For EC projects completed in 2013, owners who sold after the five-year MOP realized a median gross profit of S$142,000. This figure has seen a remarkable increase for projects completed in 2019, with owners achieving a median gross profit exceeding half a million dollars upon resale after the five-year mark.
 

The impact of escalating land costs on EC prices 

While past Executive Condominium (EC) owners have enjoyed substantial capital appreciation, the market landscape is evolving. Rising land costs, fueled by both the strong demand for ECs and a limited supply with only two to three plots released annually, are driving up prices for new projects. This presents a unique challenge for developers as they strive to balance profitability with affordability in this increasingly competitive market.
 

To maintain affordability for EC buyers, developers face the challenge of pricing their projects within the constraints of the 30% Mortgage Servicing Ratio (MSR) framework and income ceilings. These financial regulations effectively limit the loan quantum and, consequently, the maximum property value that buyers can finance.

​

Furthermore, the price gap between new ECs and non-landed private homes in the Outside Central Region (OCR) has significantly widened in recent years. In Q4 2021, this gap stood at S$388 per square foot. However, with the rapid escalation of OCR prices, this gap has surged to S$710 per square foot by Q4 2024.

​

To ensure that ECs remain an attractive and accessible option for buyers, developers are increasingly focusing on optimizing unit layouts and maximizing space utilization to enhance value and affordability within the prevailing market conditions.

​

For HDB upgraders, or second-time homebuyers, Executive Condominiums (ECs) present several compelling advantages. Firstly, upgraders are exempt from the Additional Buyer's Stamp Duty (ABSD), provided they dispose of their existing HDB flat within six months of receiving the keys to their new EC.
 

Furthermore, second-time buyers can leverage the Deferred Payment Scheme (DPS). While incurring a slight premium of 2-3%, this scheme allows them to defer 65% of the purchase price until the EC receives its Temporary Occupation Permit (TOP). The remaining 15% becomes payable upon Certification of Statutory Completion. This scheme offers significant financial benefits by enabling second-time buyers to avoid maintaining two mortgages simultaneously while awaiting the completion of their new EC.

Developing townships offer valuable exit options for EC owners

ECs strategically located within developing townships offer significant long-term investment potential. These burgeoning areas provide a robust exit strategy for owners seeking to relocate after fulfilling the Minimum Occupation Period (MOP).
 

For instance, five ECs have been launched in the promising Tengah and Bukit Batok planning areas, with Novo Place being the most recent addition. These developments benefit from their proximity to the Jurong Lake District, envisioned to become Singapore's largest business district outside the Central Business District within the next decade. This strategic positioning allows early buyers to capitalize on the surrounding area's significant future growth and development.
 

Furthermore, the presence of these ECs near the newly developing Tengah estates creates a strong demand pool, particularly from HDB upgraders seeking to move into the area.

​

The choice between a new EC and a million-dollar resale HDB flat presents a significant decision
While ECs offer affordability, they are often located in peripheral areas. In contrast, resale HDB flats, particularly in prime locations, can command premium prices exceeding a million dollars.
 

The key differentiator lies in location. Resale flats, especially larger units in central or well-connected areas, offer significant appeal despite their higher price point. However, while ECs may be situated further from the city center, they often benefit from proximity to MRT stations and are located within developing townships with growing infrastructure.

​

Another crucial factor is lease tenure. Resale flats have shorter leases, impacting loan-to-value limits and loan tenures. Moreover, older flats may require substantial renovation costs and may have poorly maintained external facades, unlike new ECs with fresh 99-year leases.