From finding out your eligibility to own an Executive Condominium (EC) to a step-by-step process of getting your hands on a unit, here’s the ultimate guide to all you need to know about ECs.
An accessible pool to clock in laps, a big-enough gym that is fully functional, the option of having a BBQ party with the under-utilised BBQ pits, and not forgetting the peace of mind from the added security — what is there not to like about condominiums?
We did a poll recently, and many Singaporeans chose to live in a condominium penthouse over a landed property if they had the financial means. But of course, what’s stopping more people from living in a private condominium is the hefty price tag.
If you’re bogged down by the exorbitant prices but want the facilities that a condominium has to offer, an Executive Condominium (EC) might just be your solution.
Not only are they slightly less pricey, these public housing also have great investment potential once they become privatised after ten years.
Intrigued? Here’s all you need to know about ECs and whether they might become your next (not exactly) humble abode.
What is an executive condominium (EC)?
Known as the ‘sandwich flat’, ECs are catered to the small percentage of home-seekers whose income ceiling is too high for an HDB flat but are still not yet able to afford a private condominium.
It is essentially a hybrid form of private-public housing, as it is considered public housing when first sold to the buyer, but is automatically privatised after a solid 10 years.
In terms of its functionality, ECs look the part and walk the talk — they resemble a typical private condo and offer the same amenities, including swimming pools, gyms, clubhouses, tennis courts, etc. You’ll also be able to enjoy tight security around the compound.
Who is eligible?
Unlike private condos that are basically accessible to any who have the financial capability to purchase them, ECs come with more requirements.
Similar to the eligibility requirements to get an HDB flat, you’ll have to qualify for one of these schemes:
- Public Scheme
- Fiance/Fiancee Scheme
- Orphans Scheme
- Joint Singles Scheme
At least one applicant must be a Singapore citizen, while one of you has to be of at least 21 years of age. If you’re applying under the Joint Singles Scheme, you would have to be at least 35 years old.
The only aspect that differs is the income ceiling that currently stands at S$16,000 and below. This means that if you and your co-applicant have a combined income of more than S$16,000, you won’t be allowed to apply for an EC.
You’re also not allowed to own other property overseas or locally or have disposed of any within the last 30 months. On top of that, you must not have just bought a new HDB/DBSS flat or EC, or received a CPF Housing Grant before, or have only bought one of these properties or received one CPF Housing Grant thus far.
What grants are available?
Thankfully, there are still some CPF grants available to help you shave off the purchase price of your home: mainly the Family Grant and Half-Housing Grant. To be eligible, at least one of you will have to be a Singapore citizen and a first-time applicant, and your combined income ceiling cannot exceed S$12,000.
Unfortunately, the Enhanced CPF Grant is not applicable for ECs.
Process of buying an EC
1. Visit the showroom
Firstly, you’ll need to pick a project that you’re interested in. Before you apply, it’s best to head down to their showflat to view the available units and to get an overview of the amenities, location, etc. We also recommend taking a trip down to the exact site to get a sense of the general vibe — is it a noisy neighbourhood? Are certain units blocked by ongoing construction? These are some things you can’t know just by viewing the showflat.
Do remember to bring the necessary documents like your NRIC, 12 months’ worth of income slips, Notice of Assessment (for the unemployed), proof of marital status and birth certificates. It’s best to check beforehand which documents are necessary before you drop by.
For EC projects that are yet to be launched, you will need to indicate your interest online. But don’t worry, you are not obligated to purchase a unit!
2. Submit your application
Once you’ve picked the project of your choice and can remotely see yourself living there for at least the next five years, it’s time to submit your application online or via walk-in (depending on the developer). The developers will go through your application again, to ensure that you’re eligible, before assigning ballot numbers. This will include the appointment date for you to head down to confirm a unit.
3. Book your flat
If you’ve made it this far, it means that your application was successful! Now it’s time to physically head down to choose a unit. It’s best to plan out a few unit choices that you’d like beforehand, so you don’t end up rushing to select a random unit because of the time crunch when you’re there.
But don’t worry if you’re not satisfied with the available units, because you can still withdraw your application.
If you choose to proceed with it, you will need to sign an Option To Purchase (OTP) agreement, which is a law-binding contract to ‘reserve’ the unit. Since you’re ‘reserving’ a unit, you’ll also have to pay a 5% option fee in cash. HDB will then review your application, which can take up to four weeks. You should also submit your CPF housing grant application form at this stage, if applicable.
4. Sort out admin matters
While HDB gets back to you to approve your application,\ start applying for a bank loan, get the Letter of Offer (LO) and hire a conveyancing lawyer to settle all your admin matters for you. Remember to hand them a copy of your OTP agreement as well.
Since you are not eligible for an HDB loan, it would be good to shop around for a bank loan. Do you prioritise lower interest rates? Do you prefer a fixed loan? You’ll have to take all these into consideration.
5. Sign S&P documents and pay stamp duties
Once HDB approves your application, you can make it official by signing the Sales and Purchase Agreement (S&P) that will be sent to you within three weeks. At this juncture, you’ll also have to pay your BSD and the remaining 15% down payment. There’s also a 1% to 3% legal and stamp fees that you’ll have to foot within nine weeks, via CPF funds or cash.
You should also submit your LO to the bank of your choice since your unit is confirmed.
6. Collect your keys
Congratulations! After a painful couple of years of waiting, your house is ready. You’ll receive an invitation to collect your keys. You can now start your renovations and finally move into your home sweet home.
EC vs Private condominium
Here is an overview of the differences between an EC and a private condo:
|Price||Less expensive||More expensive|
|Lease||99 years||99 years or freehold|
|Private or public?||Public for the first 10 years||Private|
|Minimum Occupancy Period (MOP)||Five years(but 10 years to be privatised)||NA|
|CPF housing grants availability||Housing Grant or Half-Housing Grant for first times||NA|
|Location||Usually quite inaccessible||Very spread out|
|Launch frequency||One to two per year||Any time of the year|
|Completion date||Up to five years depending on development||Immediately|
Pros and cons of an EC
|Pros of an EC||Cons of an EC|
|More affordable: Typically cheaper than private condos||MOP applies: Bounded to the house for five years before you can sell or rent it out, while it takes an additional five years for it to be privatised|
|Great for investment: High appreciation potential that will be good for investment||Low availability and poor locations: Very few launches compared to private condo and locations are generally quite inaccessible|
|Grant availability: CPF housing grants like the Family Grant and Half-Housing Grant are applicable, unlike for private condos||Long completion time: You’ll have to wait for ECs to be constructed and completed before collecting your keys and moving it, which usually ranges from three to six years|
Who should opt for it?
Generally, most would go for an HDB flat as their first choice. But if you exceed the income ceiling of S$14,000 and want the convenience of facilities that condominiums offer, you can opt for an EC instead that is generally less expensive than a private condo.
Those who are looking for investment opportunities might also benefit from an EC the most, since it becomes privatised after 10 years, offering a high appreciation potential in the long run.
However, you’ll have to be prepared to wait out the construction period before you can move in. If not, you can always opt for alternatives like an HDB resale flat (which does not have an income ceiling), a private condo or a landed property.
You also can’t be picky with location as most ECs are located at inaccessible spots that are usually not within close proximity to MRT stations.
Read these next:
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How To Buy A House In Singapore: A Complete Guide (2021)
How Do You Know If You’re Financially Ready To Buy A House?
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By Deborah Gan
A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke.