Thinking of selling your EC (Executive Condominium) after 5 years?
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 are 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.
In recent years, ECs has no doubt become popular amongst Singaporeans, especially the younger generation.
Recent EC launch in 2020 and 2021 has a considerably high take-up rate on launch day itself.
So if you are currently staying in such a popular housing option and is 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
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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
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 $1.05M to $1.2M in today’s market – you can then use the sales proceeds of $250K to $350K 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.
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 property and developments has 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.
Should I wait for my EC to be fully privatized (10 years) before selling?
Let’s take a look at the time chart of the following EC:
The main difference between 5 years and 10 years is the group of potential buyers – 5 years for locals and PRs while 10 years for foreigners.
At present, foreigners have to fork out a hefty 20% ABSD for purchasing a home in Singapore. This point alone may hinder their interest in buying an EC while for those who can afford such luxury may well be looking at prime district or within Central areas.
How do you determine if you should Hold or Sell your current property?
Follow YouHome.sg’s decision making matrix to determine your best option.
Questions to ask yourself
Are you familiar with the latest marketing trends?
Have you worked out the pros and cons of keeping your EC?
Do you have a step by step action plan?
Will you be interested to upgrade or down-size if no cash is needed?
No matter what your final decision is, it is crucial that your decision is an informed one.
Bonus for my readers
Property agent review - What my clients say about me
Have you learned something New Today? Please help to share.
Rick Huang, Associate Deputy Group Director of OrangeTee & Tie, has been in the Real Estate industry for 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.
The team focuses on understanding the client’s finances and needs and is determined about delivering the best solutions and results for them.
Amidst the hustle and bustle, Rick enjoys quiet time and indulge 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.
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)