OPINION: Why buying an executive condo is NOT a sure-win

OPINION: Why buying an executive condo is NOT a sure-win

November 15, 2022

Executive condominiums (ECs) are very popular among buyers, because of the allure of upgrading to a private property (albeit 10 years after obtaining temporary occupation permit) at an affordable price. As such, newly launched ECs tend to be oversubscribed.

Some EC buyers are eligible for government grants, which makes owning a unit even more affordable. This has given rise to the assumption that EC owners will always reap a profit when they sell their unit. However, our analysis indicates otherwise.

Including the recently launched Copen Grand and Tenet, there are 75 ECs in Singapore. Of the remaining 73 Ecs, 23 developments are fully privatised, having obtained temporary occupation permit (TOP) at least 10 years ago. Thirty-three Ecs are partially privatised (between five and nine years old) and original buyers would have fulfilled their five-year minimum occupation period (MOP) requirement. Ten Ecs are still under five years old and the remaining seven Ecs are under construction.

Reason 1: It is possible to suffer losses

Thirteen of the 23 fully privatised ECs suffered losses when owners sold their unit upon fulfilling the required MOP. Average losses ranged from $30,525 (for Eastvale) to $172,829 (for Windermere). Fortunately, these ECs turned profitable at Year 10 when the developments became fully privatised. Average profits ranged from $57,615 (Chestervale) to $347,083 (Summerdale).

https://i.imgur.com/gieL5oB.jpg

Read more at: https://www.edgeprop.sg/property-new...o-not-sure-win