Why Young Couples May Prefer to Get an EC Over a Resale HDB
ECs are sought after in the property market. They are well-priced and are considered to be good investments. ECs are also known to be very private after the 11th year, when they are marketed as “fully private”.
ECs are sought after in the property market
ECs are getting more attention as the property market continues to cool. With the government’s cooling measures, EC prices are expected to go up a bit. As a result, there are more bids for a plot of land, which should encourage developers to keep up with the rest of the pack. The EC has a lot of the right ingredients – proximity to the city, a hefty price tag and a limited supply.
In terms of price, ECs are pricier than their BTO counterparts. The cheapest EC will cost you about S$1.2 million for a two-bedroom unit. It is not a cheap alternative, but it is more than the average sandwiched Singaporean makes in a month. For young couples, it is a smart move to buy a home in a neighbourhood with schools and amenities that will serve their needs long into the future.
The biggest reason why ECs are still in high demand is because of their location. They are in the heart of the city and are close to MRT stations. In addition, there is no shortage of eateries, bars, retail and recreational facilities. While some may have doubts about the ECs’ long-term viability, they have a lot of potential as rental assets. A large percentage of units are occupied by locals.
ECs go “fully private” after the 11th year
ECs start out as public housing, but eventually become fully private after the 11th year. However, ECs have their own unique set of restrictions and regulations that home buyers should be aware of.
In order to buy an EC, first time applicants must be Singapore citizens, with a combined income of at least $12,000 a month. They must also bring proof of their income, such as a 12-month pay slip. Also, EC buyers must adhere to Total Debt Servicing Ratio (TDSR) rules and can’t borrow more than 30 per cent of their combined income in home loan repayments.
ECs are also on a 99-year leasehold. They can only be sold to Singaporeans and foreigners, and there are restrictions on selling and renting out the units. For the first five years, EC owners are required to live in the units. After this, the units can be sold to anyone.
However, ECs are not eligible for CPF housing grants or CPF housing loans. They also must wait at least 30 months for their HDB upgrader loans to be paid off. During this time, upgraders must sell their old flats and find temporary accommodations.
If you plan to purchase an EC, it is advisable to find a lawyer who can guide you through the process. Your lawyer will ensure that you meet the deadline to exercise the S&P and that you don’t miss the deadline for paying off your home loan.
ECs are good investments
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Investing in a post office savings scheme can get you a competitive interest rate. You can also opt for a high-yield savings account, which pays you 1.50% APY. These accounts are federally insured and have been around since 1933.
You can also invest in real estate, such as buying rental properties outright, or using fintech options. If you are looking for a solid return on your investment, you should look to stocks and ETFs. These are good investments for young professionals, and come with some perks.
If you are looking for a good way to save money, you can also invest in Unit-linked insurance plans. These funds have a plethora of options, ranging from hybrid funds to life insurance coverage. They are also a great way for young adults to invest as they please. If you’re looking to have some extra cash on hand for your big move, you can take out a loan from your bank.