Property: 6 things to look out for when deciding to buy an Executive Condominium

In the past year, there have been a slew of Executive Condominiums (EC) launched by various developers in the market. 

For eligible buyers, ECs are an attractive option as they offer the same amenities as private condominiums but are usually about 20 per cent cheaper. In the long run, ECs could also prove to be a better investment choice compared to private condominiums, as they are usually sold for around the same price as private apartments on the resale market.

Here are 6 things you should do before deciding if that EC you are looking at is the right purchase for you:

1) Bank loan

You are eligible to buy an EC if your household income does not exceed the $14,000 income ceiling. 

Nonetheless, it is important to first consult the bank to see how much loan you can obtain for the purchase before deciding on it. The bank will determine how much you are able to borrow based on the total debt servicing ratio (TDSR) and Mortgage Servicing Ratio (MSR) frameworks, which aim to prevent home owners from taking on loans that may put them in risky financial situations in future.

Banks in Singapore usually have hotlines for you to call should you require more information on the loan amount you are eligible for. Knowing how much you can borrow can help you narrow down your choices to ECs that are within your budget. TDSR, which applies to all financial institution loans, limits the amount of monthly debt you can have, including mortgage repayment, to 60 per cent of your income. The MSR applies to all EC housing loans where the Option to Purchase is granted on or after December 10, 2013. The MSR cap for housing loans for EC units bought directly from property developers is set at 30 per cent of a borrower’s gross monthly income.

2) CPF Housing Grant

Before looking at which ECs to buy, it would also be helpful to find out what kind of CPF Housing Grant you are eligible for.

Buyers can apply for two types of CPF grants when buying an EC from a developer - the Family Grant and the Half-Housing Grant.

First-time buyers with an income of $10,000 or lower can get up to $30,000 subsidy under the Family Grant scheme. Those whose incomes exceed $12,000 are not eligible for any of the CPF grants.

The Half-Housing Grant allows first-timer/second-timer couples to apply for half the usual grant amount. This means that couples made up of one first-timer applicant and one second-timer applicant, and have an income of $10,000 or lower, can apply for up to $15,000 in CPF grant. In this case, the full grant will be given to the Singapore citizen first-timer co-applicant.

3) Market research

In terms of investment, many owners of EC units have managed to sell their units in the resale market at about the same price as private condominium units in the same area.

This means that the return on investment from the sale of an EC unit is usually higher than that of some neighbouring private condominiums.

As more ECs are launched, interested buyers should base their decision on the development's location and compare the resale prices of neighbouring ECs with private condominiums in the area.

4) Resale levy

If you are a second-timer buying an EC, you should also find out if the development has any resale levy imposed. HDB upgraders who buy developments with resale levy will have to pay about $50,000 in cash if they are upgrading from an Executive HDB flat.

You will need to pay a resale levy if the EC sits on land acquired by the developer on or after Dec 9, 2013. Developments where the land sales were closed before this date are not subject to any resale levy.

Examples of ECs without resale levy include Bellewaters in Punggol, Bellewoods in Woodlands and Ecopolitan in Punggol.

5) Layout

The layout of your future home is important. It is not uncommon for homeowners to buy a unit, only to find that its layout is cumbersome and does little to help maximise space and comfort. These homeowners will either have no choice but to accept the flaws of their new home, or spend a fortune hacking down walls and renovating the entire place from scratch.

When you are looking for the right EC for your family, it helps to know what you need for a cosy home. A good EC unit will have optimum space for you and your family to live and play in comfortably.

Property developer Qingjian Realty knows the importance of well-utilised space in Singapore homes, and has introducing the CoSpace concept in their EC units at Bellewaters and Bellewoods. 

What this means is that the efficiency of units is maximised to the fullest, making every space count. The units' are also flexible and 'interactive', allowing home owners to easily create and transform spaces that suit their lifestyles at every stage of life. 

6) Landscape

Going beyond layout, the landscape of the development you live in is also crucial to the quality of your lifestyle.

Landscaping affects the way homeowners enjoy the amenities in their EC. Good landscaping will give the entire estate an ambience of luxury and relaxation, and also strike a good balance between modern structures and lush greenery as well as serene waters. Overall, good estate landscaping will result in happier homeowners as not only is enjoyment optimised, but the value of investment is also enhanced. 

A good example of beautiful landscaping is Bellewaters at Anchorvale Crescent which was recently awarded Best Landscape Architectural Design in Singapore at the South East Asia Property Awards 2015.

(First published by AsiaOne)


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