ECs (Electrical Conduit System) are the most recent form of residential property to be introduced in Singapore. They are affordable and more appealing than most other forms of private property, despite being restricted to HDB renting and selling restrictions. However, there are still high profit margins to be made from these properties.
Eligibility to purchase an EC
ECs (Executive Condominiums) are a form of subsidized housing. They are similar in design to private condominiums, but with more amenities. They are mainly sold at a discount of 20-30 per cent.
To qualify for an EC, applicants must be 35 years of age or older and a Singapore citizen. They must also be able to prove their income. This could be through 12 months of payslips or a Notice of Assessment from IRAS.
The supply of ECs is relatively limited. However, the demand for resale ECs has been increasing. In fact, the number of EC rental transactions has surged by 14.4 per cent from 2019 to 2021.
ECs are also considered HDB properties for the first 10 years. After that, they can be sold to buyers who meet eligibility requirements. However, this will be bounded by the resale levy. For instance, a new EC owner who wants to sell his flat in the next five years can only do so if he pays a resale levy of up to S$50,000.
The total loan capacity for ECs is about half that of private condominiums. The maximum loan-to-value (LTV) is 75%. This means that a buyer who takes out a bank loan for an EC will have to pay a bigger downpayment.
While most ECs are subsidised by the government, they are sold by private developers. Some are coming up with innovative ways to differentiate themselves. One example is the The Visionaire at Canberra, which incorporates smart home technology into its facilities.
ECs are a good option for first-time buyers. However, they should wait for approval from the HDB. They also need to have an Option to Purchase. They can then furnish their new home and start renovations.
ECs are more affordable than other private property offerings
ECs are a great deal more affordable than other private property offerings, and offer a high profit margin as well. They are also located in areas that offer lower land costs, allowing developers to offer a good value.
The EC market will continue to grow in the next decade. In the short term, developers are keen to replenish the land bank. The government is subsidising the land prices, giving buyers an incentive to buy ECs.
The EC industry is a relatively new one, and many developers are focusing on improved design features to attract EC buyers. However, the affordability of an EC depends on its location and income level.
The average EC price is about 39% cheaper than mass-marketed private condos. In some instances, EC units are sold at a higher price. This is because EC units are larger and offer a higher profit margin.
A second home loan is also available, but the limit is a 25% LTV. However, you should not expect to use the same loan for an EC as you would for a private condo.
You can also use a CPF housing grant to buy a new EC. The CPF housing grant is not a loan, but it does help you better finance a new EC.
ECs are different from HDBs, and they are not eligible for HDB loans. You will need to get a loan from a bank for the purchase. However, the cost of the loan should not be prohibitively high. In addition, your monthly gross income should be below $14,000 to qualify.
A good way to determine your affordability is to use a DBS MyHome Planner. This can tell you how much you can borrow and how much you will pay in monthly repayments.
ECs still yield high profit margins
ECs are a good value and make for a decent investment in the long run. They are also a good place to start.
ECs are unique in that they offer a lot of bang for your buck. You don’t have to pay a huge mortgage, and you can even rent out the unit. Moreover, ECs are built by private developers, which means the cost of the land is lower. And, because ECs are a hybrid of public and private housing, the prices are also a bargain.
There are also plenty of small and large ECs in the market today, so you should be able to find a unit that suits your budget. In fact, the prices of new EC launches will be on the rise in the years to come, meaning that you will not have to spend a fortune to get your hands on one. And, because they are built in conjunction with HDB, you won’t have to worry about paying over-the-odds for your new home.
The EC market is also likely to remain a hot spot in the years to come. The rise of innovation hubs, as well as an uptick in employment opportunities, have helped to drive real estate prices higher. In addition, developers are also keen to replenish the land bank. In fact, a recent survey revealed that most developers are willing to offer higher land bids.
And, if you have a few extra bobs in your pocket, you can buy a private condo and sell it off in the future to fund your upgrade. But, if you are not in the market for a new home, then you should consider purchasing a resale flat. With this, you can reinvest the proceeds into a private home, or rent out the resale flat at a high rental yield.
ECs are bound by HDB renting and selling restrictions
ECs are high-rise flats built by the Housing and Development Board (HDB). They are available for sale in Singapore and are mostly located in areas that are not too mature and have a low land cost. They have the amenities of private condominiums but at a much lower cost.
There are various eligibility schemes available to prospective buyers. These schemes are pegged on the buyer’s gross monthly income and housing status. If the buyer qualifies in one of the two categories, he or she may be eligible to receive a housing grant.
ECs are also subject to HDB’s five-year Minimum Occupancy Period (MOP), which is meant to discourage profiteering in the housing market. During this time, the entire apartment cannot be rented out to non-SPRs.
Executive condominiums, on the other hand, are built by private developers and are subsidised. These condos are available for sale to Singapore citizens and Singapore permanent residents. The units are also sold at a subsidised price.
There are many other factors to consider when buying a new home. Location, amenities and the size of the new home are among them. You also have to consider the cost of ownership. A lot of factors are involved in the HDB vs EC decision. You can also choose between a new BTO flat or a resale unit.
ECs are usually inhabited by local Singaporeans, but they are also available for sale to Singapore permanent residents (SPRs). SPRs can purchase ECs that are in the middle of the five-year MOP. They can also participate in the hybrid housing resale market.
An executive condominium may be a good investment if you are not planning on renting it out. It may also be a good idea to purchase an executive condominium if you are considering the Deferred Payment Scheme.
ECs are located in new towns or far out in the suburbs
Despite the fact that the average price of private condos has risen dramatically over the past few years, executive condos (ECs) remain an attractive alternative for many buyers. Executive condos offer a unique combination of private condo facilities and affordable prices. ECs also come with a 99-year leasehold. This makes them a good investment for young Singaporeans who are interested in owning private property. This guide will help you understand how you can finance an EC and find the right one for you.
In the past five years, the number of private homes launched has averaged just over 50 projects per year. This year, however, the number of private homes launched was the busiest yet. The number of units sold was less than half the total units launched. This should mean that homebuyers will face more competition in the coming months.
The Bukit Batok EC is located in western Singapore. This location is popular among commuters and young families. It is also near the Jurong Innovation District. The area is also home to a number of major shopping malls and restaurants. The project is also close to the MRT station. The mall has several dining options, including McDonald’s and Pizza Hut.
The Bukit Batok EC will have a number of amenities, including an underground road, which will reduce traffic in the green network. The project is also near the Bukit Batok Hillside Park, which is a six-minute walk from the nearest MRT station. The EC project will also be close to the new Tampines MRT station, which will be part of the Cross Island Line.
The Tampines North EC is also a new EC in the area. It will be located near the future Tampines North MRT station. It will also feature community spaces and lush landscapes. It will be situated on a 221,515 sqm plot of land. It will be developed into 11 14-storey blocks.