When the time comes for you to sell your HDB EC property, you are likely looking to maximize your profit. Many EC owners look to cash out right after the MOP or move to a larger unit or a more convenient location. Others might decide to downgrade to an HDB unit to save more money. Other sellers are retirees who want to unlock some cash that they can invest in other assets.
ECs are a hybrid between public and private housing
ECs, or executive condominiums, were introduced in 1996 as a hybrid between public and private housing. They are designed to cater to the sandwich class of home buyers, with prices above that of HDB flats, but similar in design to private condos. ECs can be purchased by Singapore citizens or foreigners who are forming a family unit. In order to purchase an EC, buyers must complete a Minimum Occupation Period of five years before selling it in the open market. After 10 years, the ECs will be fully privatised.
ECs offer a mix of public and private housing options, but the government is not planning to privatise all ECs. It plans to sell land reserved for EC sites to private developers at subsidised prices. Because of the government’s intervention in the private property market, the price of a new EC is much lower than that of a private condominium. Furthermore, buyers can avail of Central Provident Fund grants to purchase an EC.
They attract buyers who are mostly HDB upgraders
Many HDB EC owners are finding it hard to get a good price for their property. As resale prices are falling, selling your current HDB flat will require additional time and work. As such, it is important to have patience in selling your HDB flat. You can start by going through the asking price lists and try to find the most reasonable price for your property. This way, you can avoid missing out on your dream HDB unit. Furthermore, the proceeds from the sale will allow you to upgrade to a new HDB apartment without paying ABSD.
A key advantage of selling an HDB EC property is that they are priced lower compared to private condominiums in the same vicinity. The high demand for new ECs is also a factor. Aside from being cheaper than HDB-owned private condos, the additional buyer’s and seller’s stamp duty is not applicable. Buyers also enjoy deferred payment options. In addition, EC developers have begun to introduce features that are more appealing to buyers.
They are more affordable than HDB ECs
If you’re planning to buy a new home, you’re probably wondering if HDB ECs are cheaper than HDB resale flats. ECs are basically HDB properties, but they have a few differences. First, they’re built in cheaper land areas, usually on the outskirts of the city and far from MRT and bus interchanges. Secondly, ECs can only be purchased by Singapore citizens and Permanent Residents. In addition, HDB loans are only available to “direct” HDB buyers, and you’ll have to borrow from a bank. This means that the maximum amount of loan for an EC is 75% of the value of the property.
Another key difference is ABSD payment. ABSD is required when upgrading from an HDB flat to a private one, but an EC buyer does not have to pay it upfront. They can also use ABSD funds towards the purchase price of the new EC. Another advantage of ECs is that you can continue to live in the old HDB flat while waiting for the new one to be completed. However, if you want to take advantage of ABSD deductibility, you must sell your existing HDB flat within six months after taking possession of the new EC.
They are a good choice for family nucleus
If you’re considering buying an EC, it’s best to keep some important things in mind. First, ECs are usually located in areas with lower land prices, usually on the outskirts of the city. They are also usually not close to MRT stations or bus interchanges. Second, an EC doesn’t qualify for HDB loans, so you’ll need to get a bank loan for it. You can expect to borrow around 75% of the property’s value, which can be quite a bit.
Another important factor to consider is the income requirements. The EC is more expensive than the average HDB apartment, and the income ceiling for an owner is higher. A family can earn up to $16,000 a month in this type of property. In addition, ECs are also subject to rental and selling restrictions.
Selling EC after 10 years to get highest profit margin
HDB has set a new ceiling on the income threshold for selling HDB executive condominiums (ECs) after 10 years. After 11 September 2019, this ceiling will rise to $16,000 per month. An EC is a unit purchased directly from the property developer at a heavily subsidised price, but it still boasts many features of a private condominium.
However, it’s important to note that selling your EC after ten years is not guaranteed to yield a higher profit margin. Although most ECs appreciate over this period, the profit margin can vary widely. It depends on a variety of factors, such as the market trends, the circumstances at which the EC was launched, and when it was fully privatised.