The lure of ECs

Property GuruProperty Guru – Mon, Dec 31, 2012

By Romesh Navaratnarajah:

Demand for executive condominiums (ECs) has been red hot this year due to their potential price gains and features that rival those of private condominiums, reported The Straits Times.

The launch of the S$2.05 million "presidential penthouse suite" at CityLife EC project in Tampines further highlighted the allure of such properties. However, the record-selling prices at new launches have created controversy as to whether buyers of these pricey units should be entitled to HDB grants.

Mohamed Ismail, Chief Executive of PropNex, said: "It's almost a given that if you buy an EC today and wait 10 years, you could make a quarter of a million dollars in profit."

Units at new EC launches are usually priced 20 to 25 percent lower than 99-year leasehold private condos. Only households with a monthly income of S$12,000 and below are eligible to buy one.

However, unlike HDB flats which cannot be sold to foreigners, ECs can be sold to foreign buyers after 10 years and to Singaporeans and permanent residents (PRs) after five years.

For Chief Technical Officer Kim Kerh Chay and his family, price was the reason they bought a 2,400 sq ft penthouse at Windermere in Choa Chu Kang in 2010.

The family bought the resale unit for S$1.14 million, which was roughly what its previous owner had paid for. Since then, its value has soared by around 40 percent to between S$1.55 million and S$1.65 million. They have plans to sell the unit for S$1.8 million and buy a semi-detached house in Bukit Timah.

"It all boils down to price... After 10 years, it becomes a private condo, there's no difference. The facilities are also the same," said his son Lawrence Kim, a 30-year old entrepreneur.  Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email [e-mail]  Related Stories:GCB prices up, despite weaker sales Govt policies could dampen Asia Pacific property Housing demand from singles, seniors to rise: report