Thinking of selling your EC (Executive Condominium) after 5 years?
Do you know that EC price had increased 51% from 2013 to 2022
Good day! I have some readers who are curious about their EC (Executive Condominium) property after reading my article on HDB BTOs approaching MOP (Minimum Occupancy Period).
Most of the owners are interested to know whether they should sell their EC (Executive Condominium) right after its MOP of 5 years or to wait further.
Table of Contents
Introduction to ECs (Executive Condominium)
ECs (Executive Condominium) were introduced in 1995 as a public-private hybrid housing with the aim of providing private housing at affordable prices, catering to the sandwiched income group.
In today’s context, these are households with incomes up to S$16,000.
Like Condominiums, ECs are designed, constructed and sold by private developers. And comes with a full suite of condominium facilities and is physically indistinguishable from private condominiums in terms of design and physical outlook.
Like HDBs, buyers of ECs are entitled to CPF housing grants; executive condo eligibility checks and ec grants can be found on HDB website.
New EC owners also has to fulfill MOP of five years before the property can be sold in the open market to Singaporeans and PRs. ECs can only be sold to foreigners after 10 years, when the property is considered fully privatized.
In recent years, ECs has no doubt become popular amongst Singaporeans, especially the younger generation.
Recent EC launch in 2020 and 2022 has a considerably high take-up rate on launch day itself.
So if you are currently staying in such a popular housing option and are wondering if you should ‘give-up’ on your EC now or in the near future?
Let’s take a look at how some of the ECs have performed and whether it is worth-while to let go of your home.
Price chart for recent MOP Executive condominium
Wow! If you own an EC that is approaching MOP, this is great news for you! You are most likely sitting on a capital gain of S$250K to S$600K right now!
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You may sell your EC to fully maximize and secure your capital gain.
What to do after that? Well, you can explore some of these available options thereafter:
1. Sell your EC (Executive Condominium) and Buy another condominium
ECs are typically located outside of central region (OCR) and it may not be as convenient traveling to your workplace or to your kid’s school.
You can take this opportunity to move to another condominium, in a location of your choice.
You may also consider upgrading to a bigger unit and invest in a condominium with higher chances of appreciation.
Let’s do a quick financial calculation – an average 3 bedroom EC at Twin Waterfall (1,109 sqft) that was purchased at $750K, could fetch about $1.35M to $1.45M in today’s market – you can then use the sales proceeds of $500K to $600K towards your next purchase without topping up cash!
2. Sell your EC (Executive Condominium) and buy a HDB
This is worth considering if you are near retirement – you can cash out your sales proceeds to buy a HDB and lower your commitment towards monthly housing loan.
In some cases, owners who have sufficient CPF/cash, can pay for the HDB in full and become essentially loan-free.
This may also be an option for owners who are thinking of lowering their monthly commitment while taking a longer-break from their stressful work environment.
*Do note that there is a 15 month wait out period for owners that is below 55 years old before you can purchase a HDB.
3. Sell your EC (Executive Condominium) and buy 2 private condominiums
If your financials allows, you may consider maximizing your investment returns for the next 5 to 10 years by buying 2 properties – typically husband and wife buying under separate ownership to avoid paying Additional Buyer Stamp Duty (ABSD).
One condo will be your home, while the other will be an investment home to generate passive rental income and for potential capital gains.
However, this will require in-depth financial planning for both owners and when done well, there is a good chance that no cash top-up is needed – sales proceeds may be sufficient from the sale of your EC.
Do also note that by taking this step, much research and homework has to be done as different properties and developments have different returns.
It will be helpful to follow up closely with Master Plan announcements, Transport Development and Potential Future Development plans.
4. Part purchase / Decoupling of EC (Executive Condominium) and buy another condominium
This is somewhat similar to point 3 but instead of selling your home and buying 2 properties, this is where either owner buys over the whole share of the property – this is sometimes referred to as Decoupling as well.
In doing so, one party’s name can be freed-up to purchase another property without having to pay ABSD. Again, this will require in-depth financial planning for both owners to gauge the feasibility.
Lets Look at case study example
Jane and John is a married couple and had bought an EC five years back. Upon MOP, John buys over Jane’s share of their EC and is now the sole-owner of their EC home.
Jane can then proceed to use her name, to purchase an investment home without paying ABSD.
Both of them can continue to stay in their current EC home while their investment home generates passive rental income and future capital gain.
Conclusion
No matter what your final decision is, it is crucial that your decision is an informed one.
There is never one-strategy that fits all considering everyone’s needs and priorities are distinct – detailed financial calculations and timeline planning is of utmost importance for your individual strategy to work.
Bonus for my readers
Hey there, executive condo owners in Singapore!
Are you approaching the end of the 5-year minimum occupation period or wondering what to do next?
I can help you navigate the ins and outs of selling your EC and get top dollar for your property.
From understanding your unique financial goals to optimizing your home’s features and benefits, I’ll be your partner every step of the way.
Applying is a breeze – just hit that shiny “SCHEDULE” button.
Who should apply?
First-time EC buyers who are trying to decide whether to sell their property after the minimum occupation period (MOP) of 5 years.
Existing EC homeowners who are considering upgrading to a private property or downsizing to a smaller unit.
Property investors who are interested in the EC market and want to know whether to hold or sell their EC unit after 5 years.
Real estate agents who want to advise their clients on the pros and cons of selling an EC after 5 years.
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Self Introduction
Rick Long, Associate Division Director of Huttons Asia Pte Ltd, has been in the Real Estate industry for more than a decade.
He is driven, committed and is enthusiastic about real estate investments.
Today, he leads Team Youhome.sg, and together, he aims to provide his clients with the best experience in their property journey.
Well-equipped with expertise in residential properties, Rick often impressed his clients with knowledge of market trends, advising on timelines, financial calculations and best options for his clients.
Amidst the hustle and bustle, Rick enjoys quiet time and indulges himself in the intricate art of tea-brewing and teapot appreciation.
He would also take this chance to energize himself and reflect on his personal development and areas of improvement.
He is also a proud fur daddy to 2 rescue kitties and loves spending his free time with his wife and furbabies.
Related Articles:
Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)
Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)
Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)
Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)
Should you sell your EC after 5 years? – Read more (Selling EC)
With the current situation. Whats your take on moving forward. My unit is going MOP soon. Have not decided if i should sell
Hi Mr Chan. thanks for reading our article. I would suggest assessing your current situation/life stage. Understand your priority in moving forward. We would work out the financial calculation with you and see the options available.
Thank you for the information. For option 2 – sell EC buy resale HDB – am I able to buy a resale hdb first then sell my EC? What is the time frame?
Hi Jenny,
Yes you can purchase a resale Hdb 1st. Time frame is 6month to sell after completion of the Hdb.