Executive Condo Singapore, A Better Investment For Singaporeans?
Executive Condo Singapore‘s income ceiling requirement may be likely to be announced to be lifted up during 23 Aug 2015 or tonight SG50 National Day Rally Speech by PM Lee. The possible rise in such EC’s income ceiling cap may be ranged from $2000-3000 to reach up to $15,000. Currently, Singapore households earning a gross income of more than S$12,000 cannot buy
ECs and those households earning more than S$10,000 cannot apply for new HDB flats.
The rationale of doing so is probably tied to the fact that Singapore Government wishes to divert some demand from the HDB resale and private property markets to executive condominium markets as well as to keep up with the rising wages. This will ensure a focus on the higher middle income family and to give them an opportunity to upgrade from their current HDB flat to executive condo. It is especially timely because Singapore property cooling measure since August 2012 is also proven to be effective and not likely to be removed in the near terms.
Executive Condo Vs Private Condo [ Closest match based on 99 year leasehold ]
Location : Executive Condos are usually in the suburbs and not next to MRT stations. Better Leasehold private condos can be next to MRT stations.
Price : Executive Condos are more affordable than private condos.
Purpose : New executive Condos are only meant for self stay with a 5 years min occupation period. Resale executive condos are for long term capital investment gains. Leasehold private condos are usually for quicker gains or higher rental yields.
Restrictions: EC owners will have to occupy the EC for 5 years while private condos’ owners will have to worry about seller stamp duty (SSD) ranging from 4% to 16% if they sell within the first four years of ownership.
Ideally, my choice from property investment perspective is to better bet on executive condo because of lower price entry and higher possibility of capital gain appreciation. Though location is always the most important factor, ECs have proven to be a better asset to be owned in Singapore as the gap between the psf of ECs and private condos is narrowed down during the sub prime crisis recovery between 2009 to 2014.