SINGAPORE (EDGEPROP) – When Mr Chong, a retiree, gave his three sons a financial boost when they were setting up their homes, three possibilities were in front of them. The Chongs’ eldest son bought a private condo, while his two younger brothers, following their father’s footsteps into property investment, picked up executive condos (ECs).For Chong, the choice is clear. His reply: “If you’re buying an EC at launch, there’s no debate, you grab it.” “Even after the 5-year MOP [minimum occupation period], it’s still a good entry price,” he added.Chong can speak from experience. In July 2017, his second son bought a three-bedroom unit at Hundred Palms Residences, a 531-unit EC project by Hoi Hup Realty that was launched. The developer received 2,000 applications and sold out the entire project in one day at an average price of $841 psf. The EC at Yio Chu Kang Road was finished in 2019. Based on caveats lodged in January and February 2020, units sold had an average price of $1,769 psf, resulting in a 110% price gain in eight years.READ: 10 things homeowners need to consider before embarking on an en bloc sale (Photo: Agents)Based on the selling price of a 1,055 sq ft three-bedroom unit that changed hands for $1.95 million ($1,849 psf) in Hundred Palms, Chong estimates his second son has seen his EC unit appreciate by about $1 million from the time of the launch purchase. According to Chong, such capital gains might have been the reason why many ventured into private housing.In the meantime, Chong’s youngest son had bought a 1,260 sq ft, three-bedroom unit at The Interlace, which was their family home for the previous decade. However, as soon as it was ready for occupation, they decided to sell the three-bedroom unit. The youngest son and his family relocated to a 1,399 sq ft, four-bedroom dual-key resale unit at Twin Fountains, a 418-unit EC in Woodlands, three years ago. The project is a joint venture between Frasers Property and Lum Chang, was completed in 2016.ECs are only open to citizens and permanent residents (PRs), who can apply five years following the launch, but foreigners can purchase it only after the tenth year of obtaining the Temporary Occupation Permit (TOP). This dual-key unit brings Chong privacy, as he uses the one-bedroom unit while his son and family live in the three-bedroom one. The main entrance is a shared entrance, but each room has a separate one.Norwood Grand by City Developments, a 348-unit condo project with an average price of $2,067 psf. (Photo: City Developments)As more and more people become interested in the Northern Region, the interest in properties has also increased. Chong specifically points to the launch of Norwood Grand, City Developments’ 348-unit private condo project on Champions Way in Woodlands, which contains an average price that is 53.8% more than the most recent resale price of Twin Fountains. The interest in the Northern Region has been revived by the announcement of revitalization and new infrastructure. This includes the Johor Bahru-Singapore Rapid Transit System (RTS), which has a Singaporean terminus in Woodlands North.However, with the increase in prices of ECs as well as proxy borrowing, EC buyers will have to bear higher costs, says Eugene Lim, key executive officer of ERA Singapore. When buying an EC, the monthly household income ceiling is $16,000. Buyers must comply with the Mortgage Servicing Ratio (30% cap) and Total Debt Servicing Ratio (55% cap) requirements if they wish to get a loan.Assuming that an EC buyer of maximum 30 years old and household earning of $16,000 has obtained the maximum loan tenure of 30 years. Based on the 4% interest rate for MSR, the buyer can take a loan of approximately $1 million, says Eugene Lim.According to Lim, buyers are not discouraged from purchasing ECs because they are comparatively cheaper. A private condo in the OCR area could be double the price of an EC unit. Buyers also would not need to sell their existing homes before buying a new one and HDB upgraders will not need to pay additional buyers stamp duty (ABSD) when buying a new EC.The deferred payment scheme (DPS) is available for EC buyers. Under this scheme, buyers need to pay only a deposit, and the loan is delayed until after the getting the EC.If the price is slightly higher, buyers may opt for the DPS. The interest is charged and paid from the date of completion, while the DPS is free of payments during the construction period. After receiving the TOP, the loan amount may be continued over a maximum of ten years. The interest is charged and paid as soon as the loan is granted in the DPS system.Before 2024, the average transaction price of new non-landed private condos in the OCR area exceeded the $2,200 psf level. As per caveats lodged, new ECs in 2024 had a median price of $1,539 psf. Ismail Gafoor, CEO of PropNex expects the median price of new condos to break the $2,200 psf line again in 2025.Christine Sun, OrangeTee Group chief researcher and strategist, found that the median price difference between new ECs and new private condos in the OCR area has narrowed significantly in recent years. Based on data from URA Realis, the gap has narrowed from 49.4 per cent in 2023 to 44.2 per cent in 2024 and to 43.6 per cent in January 2025. Sun believes the gap can be attributed to the rapid price growth of ECs, while non-landed home prices in the OCR area increased at a slower pace, according to URA’s data.Due to their affordability and lower price per square foot compared to 99-year leasehold private condos in the same area, demand for ECs will be sustained, says ERA’s Lim. HDB upgraders also do not incur additional buyers stamp duty (ABSD) when buying a new EC.However, buyers would not need to sell their homes before buying a new one and HDB upgraders will not need to pay additional buyers stamp duty (ABSD) when buying a new EC.Despite the higher upfront charges, buyers would not be discouraged from buying higher priced ECs. Buyers, particularly HDB upgraders, see value in ECs. 42% Median price difference between new ECs and new private condos in OCR area (Photo: HDB)Counterintuitively, as Rohit Garg, director of analysis and consulting for JLL, points out, the COVID-19 pandemic has boosted interest in the real estate market. “The pandemic has highlighted the importance of having one’s home, and this has encouraged HDB upgraders to explore alternatives outside of the HDB market. ECs have always provided a relatively affordable option for HDB upgraders.”Rising Overall priceDuring the housing fever that the petite mindx in 2020, the overall price of ECs as well as the price of private homes increased drastically.Despite the addition of 2,455 EC units in 2020, the EO only dropped to 4,243 units in 2021. JLL estimates that there are currently 2,500 units, or 54% of the 4,643 unsold EC (September 2024) units with a launch date, and with the remainder possibly launching in 2025, the EC market is expected to remain tight.In addition to the mature towns of Tampines, Pasir Ris and Punggol, there are only three suburban areas of EC, specifically in area Tengah.Before 2024, the average transaction price of new non-landed private condos in the OCR area exceeded the $2,200 psf level. As per caveats lodged, new ECs in 2024 had a median price of $1,539 psf. Ismail Gafoor, CEO of PropNex expects the median price of new condos to break the $2,200 psf line again in 2025.Christine Sun, OrangeTee Group chief researcher and strategist, found that the median price difference between new ECs and new private condos in the OCR area has narrowed significantly in recent years. Based on data from URA Realis, the gap has narrowed from 49.4 per cent in 2023 to 44.2 per cent in 2024 and to 43.6 per cent in January 2025. Sun believes the gap can be attributed to the rapid price growth of ECs, while non-landed home prices in the OCR area increased at a slower pace, according to URA’s data.On discussion of Woodlands Avenue 2 (Image: HDB) Meanwhile, the new Woodlands Avenue 2 (glance) will meet Woodland North MRT. The Integrated mixed-use development with a gross floor area of 1.09 million sq ft will contain 680 residential units. Antler Hill Residences (picture), Singapore’s first BTO project that links with Tengah Forest, will cost $350 per sq ft, which is the same price as each.Meantime, more than 50,000 people applied for the popular five-bedroom Punggol Bayvue BTO flats, which were converted to
Investing in a condo requires careful consideration of financing options. Fortunately, Singapore offers a variety of mortgage options for potential condo investors. However, it is important to keep in mind the Total Debt Servicing Ratio (TDSR) framework, which sets limitations on the amount of loan a borrower can take based on their income and current debt obligations. To make well-informed financing decisions and prevent over-leveraging, it is crucial to understand the TDSR and seek guidance from financial advisors or mortgage brokers. Additionally, staying updated on New Condo Launches can also provide valuable insights for investors.