Upgrading From a HDB: Should You Get a Private Condo or an Executive Condo in Singapore?

PropertyGuru Editorial Team
Upgrading From a HDB: Should You Get a Private Condo or an Executive Condo in Singapore?
In Singapore, private condos and their counterparts – executive condos, are amongst some of the most highly sought-after pieces of property.
Due to their attractive facilities, associated prestige, and investment prospects, both private and executive condos are often quickly snapped up by excited buyers.
HDB owners may sometimes want to upgrade to a private or executive condo upon meeting their HDB Minimum Occupancy Period (MOP). However, there are some things that HDB owners need to take note of before upgrading to a condo in Singapore.
Here, we’ll be taking a look at the differences between executive condos and private condos in Singapore to help you make an informed decision.

What are the differences between private condos and executive condos in Singapore?

Before we dive into the specifics on how both condo types differ with respect to upgrading from a HDB, here’s a broad overview of what private condos and executive condos actually are.

Private condos

Private condos are non-landed strata developments. The apartments that are provided by these private condos can either be freehold, or on a 99-year leasehold. There are no restrictions on who can buy them.

Executive condos

Executive condos, also known as ECs, are targeted at individuals who have exceeded the monthly income ceiling for public housing, yet don’t have the financial means to purchase private property.
These executive condos are thus partially subsidised by the government, and start off as public housing. After 10 years, however, they will become private property. These condos usually have a leasehold tenure of 99 years.
Executive condos also have more restrictions pertaining to their purchases, such as the buyer having to qualify under a certain scheme. This includes the Public Scheme, Fiance/Fiancee Scheme, Orphans Scheme, and Joint Singles Scheme. Buyers also cannot exceed a certain income bracket.
We have compiled the key differences between upgrading to an executive condo or a private condo below for those who just want an overall snapshot.
Cannot use CPF Housing Grants
  • Can use CPF Housing Grants
  • Up to 25-30% cheaper than private condos
  • Need to meet HDB’s 5-year MOP
  • Buyers cannot do the following during this MOP period:
    • Rent out the entire executive condo
    • Sell the executive condo on the open market
    • Purchase private property in Singapore or overseas
Market value is relatively stable, and thus good as a long-term investment
Likely to have good appreciation in value after privatisation
TDSR (you can only use up to 60% of your monthly household income to pay for loans)
MSR (you can only use up to 30% of your monthly household income to pay for loans)
Resale levy
You have to pay a resale levy if you bought government-subsidised properties in the past (e.g. BTOs, DBSS, ECs)

1. Affordability

There may be a few reasons why a HDB owner might be thinking of buying a condo in Singapore.
One reason might be to simply upgrade living quarters. Another reason could be to use the condo as an investment option.
No matter the reason, the main focus should be that the buyer is able to afford the property in the first place.
Executive condos are usually more affordable than private condos. This is because the government subsidises part of the land cost for these projects.
As a result, most executive condos have prices that are up to 25 – 30% lower than private condos.
Furthermore, since executive condos start off as public housing, homebuyers can make use of CPF Housing Grants in order to pay for their home.
Due to these attractive options, many Singaporeans are enticed to upgrade to an executive condo instead of a private condo.

2. Restrictions

Since executive condos are considered public housing for the first 10 years, they follow the MOP rules set by the HDB.
This can make it tricky for those looking to earn early from their executive condo. Thankfully, you can still live in your executive condo and rent out your existing HDB flat if you didn’t sell it.
Private properties do not have to abide by the MOP, and you can resell them any time you wish. If your aim is to rent out your property to a tenant for a consistent stream of income, a private condo will allow you to earn rental returns earlier on.

3. Potential for appreciation

Executive condos tend to have good appreciation potential - PropertyGuru Singapore
Executive condos tend to have good appreciation potential
Due to executive condos being partially subsidised by the government, you can buy an executive condo for a lower price than its actual price. As executive condos transition into private property, their value increases.
This makes executive condos a good choice for HDB owners who are thinking of upgrading to a new home, as they are buying a property that is likely to appreciate in value.

4. Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR)

Executive condos and private condos have different servicing ratios. Those who are buying executive condos have to comply with the MSR, while buyers of private condos have to comply with the TDSR.
Under the MSR, the monthly repayment for the housing loan used to buy the EC should not exceed 30% of your monthly household income. There is also a cap on the maximum loan tenure, at 30 years.
Under the TDSR, you can only use up to 60% of your gross monthly income to pay for your loans. This limit includes all your outstanding debts, such as car loans, installment plans, and credit card payments.

5. Resale levy for executive condo buyers

If you have previously bought a government subsidised house, such as a BTO, a DBSS unit, or another executive condo, you will have to pay a resale levy. This is to ensure that there is a fair allocation of public housing subsidies for government-subsidised homes.
The actual resale levy amount will depend on your previous subsidised housing type. Take a look at this article here for the actual resale levy amounts.
To get more guides like this, check out PropertyGuru.
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