When 1st Time Buyers Should Choose Private Condo over Executive Condo (4 Situations)
Executive condo (EC) is a public-private housing that is popular among middle-income Singaporeans. EC has many attractive features and also very strict buying restrictions: Singles, Permanent Residents (PR) and High-Income earners will not qualify. This article will attempt to list 4 situations when qualified 1st time buyers should choose private condo over executive condo
Table of Content
- You Prefer a Shorter Holding Period
- You Want More Rental Flexibility
- To Avoid Locking Down 2 Names
- More Choices with Better Capital Appreciation
📌1. You Prefer a Shorter Holding Period
- An EC takes 5 years to build and complete
- You can sell to PR after completing the 5 years Minimum Occupation Period (MOP).
- Foreigners can buy an EC when it becomes fully privatized after 10 years.
- The whole process takes about 15 years.
- Many EC buyers are HDB upgraders or owner occupiers who are ready to hold long term.
- If you prefer a shorter holding period, you should choose to buy a private condo instead.
- For private condo, you can sell after 3 years without seller stamp duty (SSD).
- SSD is calculated from the day your sign your Sales & Purchase (S&P) agreement, not Move-In Date.
- This applies to both new launch and resale condos
📌2. You Want More Rental Flexibility
- When buying EC, you can only take bank loans, same when buying a private condo.
- If you know that you are unlikely to stay in the EC for the next entire 5 years, it may be better to buy a private condo.
- For example, you can rent out your private condo anytime and use the rent to cover your bank mortgage.
- Renting out whole EC unit is not allowed within the 5 years MOP
📌3. To Avoid Locking Down 2 Names
- You need to form a family nucleus (e.g., couple) to buy an EC
- You cannot decouple before fulfilling the 5 years MOP.
- This means that 2 names will be locked down for 10 years (construction time + MOP)
- For couples who aspire to own 2 private properties earlier, then an EC may not be suitable
📌4. More Choices with Better Capital Appreciation
- There will only be 4 EC launches in 2022.
- EC is relatively cheaper than a private condo but they are usually in remote locations.
- Buyers who choose private condo will have more options.
- Selected condos that are nearer to MRT stations, popular schools or in prime city fringe locations may have better capital appreciation potential than EC.
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