buying an executive condominium

Are Executive Condominiums (ECs) still a good option for home buyers today? They may not be, as buyers are constrained by the amount of loan which they can take up for their EC purchase. This is largely due to the stringent Mortgage Servicing Ratio (MSR) that applies for Executive Condominiums. Even with the maximum combined monthly income ceiling of $16,000, buyers may only qualify for a loan of up to $1 million, requiring them to cover the excess EC cost with cash and/or CPF. With average EC prices starting from $1.4m and above, EC buyers still have to fork out a substantial cash / CPF outlay to afford an EC in 2025. Still, many Singaporeans are drawn to ECs, seeing them as a better value compared to private condos. In 2024, the median transaction price for a new Outside Central Region (OCR) condo unit (900–1,000 sqft) was 42% higher than a similar EC unit. Yet, despite the lower price, EC residents still get to enjoy a comparable lifestyle—with security and full-fledged facilities like swimming pools, gyms, and function rooms. Table 1: Price comparison between a new EC and OCR condo (900 – 1,000sqft) in 2024 Plus, the lower purchase price means a smaller loan amount, which helps reduce interest costs. On top of that, eligible first-time buyers can receive up to $30,000 in grants to offset their initial down payment. Impressive Sales Performances In Recent EC Launches Lumina Grand sold 53% of its units at an average price of $1,464 psf during its launch weekend, while Novo Place moved 57% of its 504 units at an average price of $1,654 psf during its November 2024 launch. When Novo Place opened for a second round of balloting for second-time buyers, it sold another 137 units, bringing total sales to 88%. According to URA caveats, there were 1,185 new EC transactions in 2024. With only a limited number of EC launches each year, buyers have been turning to the remaining supply. As of end-January 2025, the available EC stock had dwindled to just 138 units. What makes ECs so Attractive? Despite the higher upfront costs, buyers remain undeterred for two key reasons. Beyond the lower price, EC buyers aren’t required to sell their existing home before making a purchase. For HDB upgraders, this means they can avoid paying Additional Buyer’s Stamp Duty (ABSD) when buying a new EC. Additionally, EC buyers have the option to use the Deferred Payment Scheme (DPS) at an extra cost, allowing them to pay only a deposit upfront and defer their loan until the EC is completed. This way, they won’t have to manage two mortgage payments while waiting for their new home. With no ABSD payable and the flexibility of the DPS, upgrading to an EC becomes a much smoother process for HDB owners. Why are ECs Becoming Increasingly Expensive? The rise in construction and labor costs has been a significant challenge for property developers, a trend exacerbated by the Covid-19 pandemic. The global supply chain disruptions resulted in a tighter supply of materials, further inflating costs. Coupled with higher inflation rates, developers have faced mounting expenses. Additionally, construction firms are now competing for a limited workforce, as both public sector projects (like the Cross-Island Line and HDB Build-to-Order flats) and private sector developments continue to rise. Another key factor contributing to higher property prices is the escalation in land costs, particularly for new Executive Condominiums (ECs). Developers have been bidding aggressively for EC sites in response to strong market demand. From 2015 to 2024, the average cost of EC land has surged by 164%, increasing from $287 per square foot per plot ratio (psf ppr) to $733 psf ppr. A prime example of this trend is the Tengah Garden Walk EC site, which was awarded to a joint venture between City Development Group and MCL Land for $603 psf ppr in 2021. More recently, in February 2024, another EC site at Plantation Close was awarded to Hoi Hup Realty and Sunway Developments for $701 psf ppr—16% higher than the Copen Grand site, further reflecting the rising costs in the sector. Chart 1: Land cost of ECs since 2015 Thirdly, the harmonisation rule, which took effect on 1 June 2023, has impacted how developers market their properties. Under this new regulation, developers are no longer permitted to sell non-strata areas such as void spaces and air-con ledges. To compensate for the reduced sellable area, developers have adjusted their selling prices, resulting in higher per square foot (psf) pricing. Table 2: Existing launched ECs in the market In 2025, three new ECs are set to launch, with two in the East and one in the West. Here are the upcoming EC launches for 2025: Aurelle of Tampines Estimated launch: Preview in Feb 2025 Planning Region/Area: East/Tampines Distance to Nearest MRT Station: 5-min walk to the upcoming Tampines North MRT Station Number of Units: 760 Developer: Sim Lian Land Pte Ltd and Sim Lian Development Pte Ltd The first EC launch of 2025, Aurelle of Tampines, is expected to generate significant interest. This will be the first EC in Tampines since Tenet, which sold 72% of its 618 units upon its launch in December 2022. Residents in the East will be particularly drawn to Aurelle of Tampines, given that Tampines is a well-established town with excellent amenities. By the time buyers collect their keys, the town will feature four shopping malls and two community hubs. Additionally, Tampines is well-connected by transport, with multiple feeder bus services and four MRT stations. As a regional center, Tampines is home to two industrial estates and is conveniently located near commercial hubs such as Changi Business Park, Changi Aviation Park, and Changi Airport. Situated in the heart of Tampines North, a new development area, Aurelle of Tampines will be just a 5-minute walk from the upcoming Tampines North Integrated Transport Hub. This will provide seamless connectivity to the MRT station, air-conditioned bus interchange, community club, hawker center, and a new mall, Parktown Tampines. The Tampines North