Image credit: Today Online
If you’re thinking of what property to purchase next and can’t decide between aN HDB flat or a private condominium, perhaps it is time for you to consider the middle child of the two options—the ever-popular Executive Condo (EC). If you have had your eyes set on an EC, you’re not alone on this. In fact, sales are strong for both new and resale ECs. In 2020, the overall sales volume of ECs surged by 70.5 percent to 2,145 units from 1,258 units in 2019, surpassing the 1,735 units moved in 2018.
Today, we’ll take a closer look at all you need to know about ECs. Particularly, we’ll answer some of the frequently asked questions regarding ECs. So if ECs are your eye-candy (also an EC), keep reading on to find out how you can turn your EC dreams into reality.
# 1: What is an EC?
An EC is often known as a "sandwich flat" and is a public-private housing hybrid designed for middle-income Singaporeans who do not qualify for an HDB flat due to the income ceiling restriction but at the same time do not find private condominiums to be affordable or practical.
Private developers create and sell ECs, which are subsidized by the government. As a result, while they offer condo-type amenities like swimming pools, gyms, and a clubhouse, they are less expensive than private condominiums.
Because ECs are hybrid properties, they are treated as HDB properties for the first ten years. This means that they are subject to HDB regulations like the 5-year Minimum Occupancy Period (MOP) regulation, HDB's numerous qualifying programs, HDB's selling limitations, and the resale charge (if buying from a developer).
When ECs reach their 11th year, however, they will be privatized, which means you can sell them to more people without the presence of pesky restrictions that limit your buyer pool.
# 2: What is the first step I should take before purchasing an EC?
Before you get all excited about purchasing an EC, we’ll have to let you know that not everyone is eligible to buy one. In fact, there are certain rules and requirements when it comes to buying an EC. We’ll go through them one by one in this section.
Family Nucleus
Depending on your family nucleus, you’ll be eligible to buy an EC under a different scheme. There are four schemes presently—the Public Scheme, Fiancé/Fiancée Scheme, Orphans Scheme or Joint Singles Scheme.
Take a look a the table below to check which scheme you are eligible for.
Scheme Type Who is eligible?
Public SchemeOne citizen and at least one other citizen or PR applying as a family nucleus. This could be your spouse and kids (if any), parents and siblings (if any), or children under your legal custody (only for widowed/divorced applicants.Fiancé/Fiancée SchemeFiancé/Fiancée. You must be prepared to register your marriage before taking possession of your EC if applying for additional or special CPF housing grants, or within 3 months of taking possession of the flat. There will be a requirement for you to submit a copy of your marriage certificate to your EC developer within 3 months of keys collection.Orphans SchemeSiblings who are single (unmarried, divorced or widowed), orphaned, and have at least 1 deceased parent who was a Singapore citizen or PR.Joint Singles SchemeIf you are buying with up to three other co-applicants who are all Singapore citizens. All applicants must be single, at least 35 years old, and must be co-applicants.
Age
Excluding singles buying under the Joint Singles Scheme (which requires you to be at least 35 years old), all buyers have to be at least 21 years old. In addition to that, if you’re planning to buy the EC on your own, you can only buy a resale EC and won’t be eligible for a CPF Housing Grant.
Citizenship status
With the exception of those buying under the Joint Singles Scheme (whereby all applicants have to be Singapore citizens), in order for you to buy an EC, at least one of the buyers will need to be Singapore citizen, with the other applicant a Singapore citzen or PR.
Income ceiling
To be eligible for an EC purchase, your household's combined average monthly income cannot exceed $16,000. The income ceiling is $14,000 for Option to Purchases (OTP) that were offered before September 11, 2019.
Property ownership
Before you can purchase an EC, you must not be an owner of any property overseas or locally. If you do, you’ll have to dispose of it within 30 months of applying for an EC.
# 3: Am I eligible for HDB loans?
Unfortunately, EC buyers are not eligible for HDB loans. You’ll have to apply for a bank loan instead. What this means is that you’ll need to fork out a larger downpayment and at least 25% of it has to be paid in cash or CPF.
If you’re a first-time applicant with no prior property, you may borrow up to 75% of the purchase price of your EC, subject to the Mortgage Servicing Ratio (MSR) and the Total Debt Servicing Ratio (TDSR).
Here, certain rules apply too: your MSR cannot exceed 30% of you and your partner’s combined incomes. In other words, you cannot be paying more than 30% of your combined income in home loan repayments.
In terms of TDSR, rules state that your total loan liabilities (including car loans, credit card debt and other loans that you may have taken out) cannot exceed 60% of your income.
# 4: What about CPF housing grants?
As mentioned previously if you’re planning to buy the EC on your own, you can only buy a resale EC and won’t be eligible for a CPF Housing Grant. Otherwise, one of the benefits of purchasing a new EC is that you may be eligible for CPF Housing Grants, which can help defray some of the costs. You can apply for one of two types of grants: Family Grant and Half-Housing Grant.
Family Grant
Half-Housing Grant
If you are buying an EC as a household consisting of a first-timer and a second-timer (someone who has previously received a housing subsidy), you are still eligible for a Half-Housing Grant.
# 5: What other fees should I anticipate?
In the process of purchasing your EC, there will be certain unavoidable fees. You may also have to pay legal fees and valuation fees along the way.
Application fee
Typically, when purchasing an EC from a developer, you’ll be required to submit an online application to register your interest in the project before you’ll be invited to the showroom when the development is launched. Similar to a HDB BTO application, an application fee applies. This fee varies from developer to developer.
Option fee
When you go down to choose your unit, you'll need to get an Option to Purchase (OTP) so the developer can't sell it to someone else before it expires. In order to get your hands on that OTP, you'll have to pay 5% of the purchase price. This 5% payment is required to be made in cash or cheque.
Exercise Fee and Buyer’s Stamp Duty
If HDB approves of your application, you’ll receive a Sale and Purchase Agreement (S&P). At this point, when you sign the S&P, you’ll be liable to pay the Exercise Fee and Buyer’s Stamp Duty (BSD). The former refers to the remaining 15% of your downpayment and is payable on the day of signing the S&P or within 9 weeks from your OTP, whichever date is farther away. The latter depends on the purchase price of your EC unit and is payable within 14 days of signing your S&P. Briefly, the first $180,000 of the purchase price of your EC will be liable to 1% BSD. The next $180,000 and the next $640,000 will be subject to 2% and 3% respectively. Finally, any remaining amount will be subject to 4% BSD. In addition, Additional Buyer’s Stamp Duty will apply if you are purchasing your second property.
# 6: What are some ECs I can look at?
Provence Residence
Image credit: Provence Residence
Located along Canberra Link, Provence Residence consists of nine blocks of 413 units. The 99-year leasehold project is made up of 3 and 4 bedroom units. Residents also get to enjoy more than 50 different facilities that flower the project. Located near Canberra MRT station, you’ll be situated right within the up-and-coming Canberra area.
Parc Greenwich
Image credit: Parc Greenwich
This new Sengkang EC will be launching in July 2021 at District 28. Developed by FCL Lodge Pte. Ltd, Parch Greenwich is perfect for those who are yearning for a modern and vibrant lifestyle. When completed, the development is expected to house around 500 modern housing units and is expected to be 15-story high. The EC will feature facilities such as a club, gym, tennis court, swimming pool, and many more.
The EC is also a short distance walk from the upcoming Fernvale LRT and with amenities such as shopping malls, hospitals, and schools within the vicinity. The area also enjoys excellent connectivity allowing Parc Greenwich residents to access the city within a short ride.
Parc Central Residences
Image Credit: Parc Central Residences
Here’s an interesting fact: Parc Central Residences is actually the very first EC to launch in 2021 and the first EC to launch in the East since 2013. As a project of many firsts, Parc Central Residences, located in the heart of Tampines, features 700 units of 3-, 4-, and 5-bedrooms.
Within the project, residents will find 88 communal facilities located throughout the EC, including pools, reading rooms, jogging trails, a futsal court, a basketball court, and a tennis court. Tech lovers will also love that the EC is smart-enabled: all units are equipped with a Smart Hub so that you can control all of your smart devices remotely from your mobile phone.
Parc Canberra
Image credit: Parc Canberra
Parc Canberra is a 99-year leasehold executive condominium building in District 27 of Singapore. Located along Canberra Link, Hoi Hup Realty and Sunway Development are the developers of this property. The project has a total of 496 units, with 2-, 3-, 4-, and 5-bedroom unit types, making it perfect for individuals who live alone or with a large family.
Residents at Parc Canberra also enjoy easy access to the local public transit system as well as amenities such as a hawker centre and indoor and outdoor sports facilities. In addition, the upcoming Canberra Plaza, which will be located right next to Parc Canberra and will provide residents with a one-stop shopping destination that will include supermarkets, food courts, restaurants, clinics, an event plaza for entertainment, and even a water playground.
Turning your EC dreams into reality
Image credit: The Straits Times
ECs are generally a great option for those looking for a great middle-ground between HDBs and private condominiums. However, with a long list of criteria on eligibility of grants and schemes, many are put off from the idea of purchasing an EC. With this handy guide, buying an EC is made much easier.
But if you still need expert help to finance your home, have trouble finding an EC Unit of your dreams, or simply feel that the process of purchasing an EC is too much to handle, you might want to consider lessening your load by engaging a property agent experienced with inheritance cases. Feel free to contact us here at Property Hunter!