Houses in Singapore don’t come cheap, and Singaporeans know this all too well.
Even buying a BTO flat can put a dent in your finances, especially if you’re young and looking to get married. What’s more, if you and your partner happen to earn a combined monthly salary of $14,000 or more, you won’t be eligible to buy a BTO flat if you’re looking at at least a 4-room flat.
There’s still another option for you, though.
Executive Condominiums (ECs), although pricier than BTO flats, might be something you can consider.
But first, what’s an EC?
First introduced by the government in 1999, ECs are catered to those who earn too much to qualify for an HDB BTO flat, but can’t comfortably afford a private condo.
ECs are somewhat of a hybrid between private and public housing. ECs are first sold via HDB as public housing. Built by private developers, they come with the facilities that you can find in a private condo. From the 11th year onwards, ECs go on to become private property.
ECs are cheaper than private condos, and you can even use CPF housing grants to offset some of the cost, provided you’re eligible for the grants.
What’s the eligibility criteria to buy an EC?
Before we dive into the different scenarios where you might be better off with an EC, we thought we’d first share with you HDB’s eligibility criteria for buying an EC.
When does getting an EC make more sense than getting a BTO flat?
BTO flats are usually associated with being the first home that couples get together.
If you happen to fall into this group, you don’t actually have to limit your choices to just BTO flats. In fact, there are some scenarios where an EC might be a more viable option for you than a BTO flat.
Let’s take a look at each of these scenarios.
1) You exceed the BTO income ceiling
BTO flats are one of the more affordable housing options in Singapore, and that also means there’s a lower income ceiling in place.
For a brand new 3-room flat, you’ll need to have a gross monthly household income of at most $7,000 or $14,000, depending on the project. For a flat that’s 4-room or bigger, the income ceiling is $14,000.
The combined salary of you and your partner might turn out to be too high to qualify for a BTO flat. For instance, if your gross monthly household income is $15,000, you won’t be able to qualify for a 4-room BTO flat.
In such a case, you can consider getting an EC instead. With your combined income below the EC income ceiling of $16,000, you meet the income ceiling criteria for ECs.
2) You’ll actually make use of the EC facilities regularly
The facilities that come with BTO flats are fairly basic, such as a garden and a work-out corner.
If you’re the kind of person who works out regularly at a gym, these BTO facilities might not be sufficient for you, especially if your work-out regime includes lifting weights. Living in a BTO, you’ll need to travel to the gym regularly, with the average cost of a gym membership in Singapore being almost $200 a month.
Living in an EC, there’s usually a gym, swimming pool, and other facilities all at your doorstep. However, monthly maintenance fees are around that of private condos, at about $250 a month or more. For HDB flats, the Service and Conservancy Charges (S&CC) are way lower at less than at $100 a month. Nonetheless, the prospect of working out right at your EC without having to travel out might be an attractive enough proposition for you.
The usual gyms and swimming pools aside, there’s also 24-hour security. And if you like hosting parties or family gatherings, you can have them in the function room of the EC instead of renting one outside.
3) You own a car, or at least plan to own one
Many ECs tend to be located further away from the city centre, in more “ulu” and non-mature estates such as Sengkang, Sembawang, and Punggol. What this means is that while you’ll get to enjoy ‘condo living’, your EC will probably be in an area where the surrounding amenities leave much to be desired.
For example, your EC might be situated far from MRT stations and bus interchanges, compared to a number of BTO developments. This means that if you’re planning to live in an EC, getting a car would probably be a good idea if you aren’t keen on public transport and don’t want to spend too much time getting around.
That said, living further away from MRT stations and bus interchanges might be an upside for some, enough to outweigh the cost of getting a car or the hassle of taking public transport.
For example, perhaps you don’t want your home to be near to too much human traffic. Or you’re an extremely light sleeper who can be awoken by a sneeze 30-storeys down, what more the roaring of a passing MRT train.
4) You don’t want the hassle of doing extensive renovations to your home
After waiting a number of years for your BTO or EC, you’ll probably be dying to move in and settle into your new home as soon as you can.
However, when it comes to BTO flats, you still have to wait a little longer before you can really settle down in your new house. Since BTO flats do not come with furnishings such as air-conditioning and kitchen furnishing unlike ECs, you’ll have to get renovation works done before actually moving in.
If you don’t want to deal with all the time and effort associated with identifying good contractors from rogues ones, dealing with the nitty-gritty of renovation planning, and making sure everything runs smoothly, an EC might be something to consider.
With ECs, any renovation work you’ll need will likely be minimal, depending on what your preferences are for home. This means you’ll get to move into the EC sooner after it’s completed.
5) You want to sell your property more easily further down the road
Both BTO flats and ECs are sold by HDB, and can only be sold in the resale market to Singaporeans and PRs after the 5-year Minimum Occupancy Period (MOP) is up.
In the case of ECs, these developments are considered as private property from the 11th year onwards. As such, you won’t be limited to selling your EC to only Singaporeans and PRs. You’ll also be able to sell them to foreigners and companies.
What this means is that it might be easier to sell the property when the time comes, compared to a BTO flat.
Whether you choose to get an EC or a BTO, do make sure you’re financially ready!
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