Differences in purchasing between Executive Condominium and private condominium

There are over 70 condominium projects sprawling over Singapore, including Jurong West and Punggol and it is built under the Housing Development Board’s (HDB) Executive Condominium (EC) Scheme. The best part of owning an EC is that you are able to enjoy the design, facilities and lifestyle of condominium living while receiving government subsidies at the same time. With such good deal, there’s always terms and conditions to it.There are some pros and cons that prospective homeowners should be aware when deciding whether to purchase a private condominium or HDB’s EC.

Your eligibility

Firstly first, before deciding to select your EC or even purchasing EC, you will have to qualify under one of the existing HDB eligibility schemes. There are various schemes for all kinds of Singapore’s demographics like Public Scheme, Fiance/Fiancee Scheme, Orphans Scheme and Joint Singles Scheme.

The main criteria for all schemes that requires the main applicant must be a Singapore Citizen above the age of 21 and if there is co-applicant involvement, the co-applicant has to be either a Singapore Citizen or Singapore Permanent Resident. Meanwhile, for those who are applying under the scheme of Joint Singles, both applicants must be citizens above 35 years old.

If you have other HDB flats on hand, you must not currently own and must dispose any private property (overseas or locally) in the past 30 months. Most importantly is the household income, the ceiling of both applicants’ household income has to be capped at $14,000. If both you and your co-applicant are professional with more than $14,000 in household income, we suggest that you to look into private condominium.

And if you are getting a private condominium, those criteria are not required. You can purchase anytime from private property developer.

Ownership restrictions and Minimum Occupancy Period (MOP)

When you are considering getting an EC, it is mandatory for the owners to fulfil the 5-year Minimum Occupancy Period (MOP) before you can rent out or sell your property. After fulfilling the 5-year MOP, EC owners are only allow to sell their unit to Singapore Citizens and Permanent Residents. Once the EC reach the 10 years mark, it will be free from such restrictions and by then, homeowners are free to sell their EC to anyone.

Meanwhile, there is no such restrictions for private condominiums the moment you purchase.Foreigners who are looking to purchase property in Singapore are only allow to buy private properties.

Priority in purchase

The main purpose of having the EC type in Singapore is to provide home for new Singaporean families and HDB has mandated that there must be at least 70% of units on sale to be reserved for first-time home buyers. In fact, the rest of the units in EC can be sold to those who are upgrading from another HDB flat. Besides, there’s also another priority given to a specific group where the family consists of three generations family members and also the main applicant is a first time buyer. This category definitely needs an upgrade from their previous smaller unit.

On the other hand, buying private property does not have priority in purchase criteria but on ‘first come first serve’ basis. At the same time, buyer will have to compete with other buyer on the interested development - balloting style.

Pricing and loan financing

Do you know when buying an EC, you are allowed to receive HDB grants of up to $30,000? Yes, that is right, even purchasing an EC entitles you to get HDB grants which is something you don’t see in private property purchases.

In addition to those grants, ECs price to have shown it to be priced at least 20% lower than comparable private condominiums which in turn make it more attractive for those who can qualify and do not mind the restrictions.

Due to EC’s status of ‘semi private’, you are only allow to get a bank loan to finance your purchase of your EC, though you may service your monthly repayments using a combination of cash and CPF. However, if you would like to check out which loan suits your finances the most, you can click here.

Differences in purchasing between Executive Condominium and private condominium