ECs Provide A Good Alternative to Private Condos Given Low Price

ECs Provide A Good Alternative to Private Condos Given Low Price

ECs are a good alternative to private condominiums given their low price and subsidised land prices. Although these condos are not as centrally located as private condos, they are still a good option to consider for investment purposes. However, it’s important to understand the pros and cons of this type of condo before investing.

ECs are a subsidised condo

Executive condominiums (ECs) are privately developed apartments with condominium-like amenities that are subsidized by the government. These apartments are generally cheaper than private condos, and former National Development Minister Khaw Boon Wan has compared them to Lexus cars. Although they may be cheaper, ECs do have some restrictions. For example, EC owners cannot rent out their whole unit. However, once these restrictions were lifted, ECs outperformed private condos when it came to capital appreciation.

Entry prices for new ECs are much lower than those of new launch condos. However, the price depends on various factors, such as the floor level and the unit facing. Thus, ECs may not be as affordable as new launches.

They are less centralised than private condos

ECs are more affordable than private condos and provide a better investment opportunity for long-term owners. They are also more flexible, with no rental restrictions. Therefore, they are ideal for investors looking to buy a condo without any time restrictions. A study by OrangeTee showed that ECs have higher internal rates of return over a decade than private condos. In addition, ECs can be rented out starting from the sixth year. Rental rates tend to be comparable to those of private condos, which helps offset holding costs.

Executive condominiums are often located in ‘ulu’ estates, which are far from the city centre, yet close to public transport. Some ECs in Singapore are located in Jurong West and Jurong East. They also come with good rental yields.

They are a good investment

One of the reasons why ECs provide a good alternative to privately developed condos is because they are much cheaper. In addition to being more affordable, ECs are also able to be rented out starting from their 6th year, which gives them a higher yield. This, in turn, will offset the costs of acquiring an EC. One example of an EC that is rented out is the Bishan Loft.

One study, conducted by the OrangeTee group, compared ECs to private condos and found that ECs offer a higher internal rate of return over the long-term. Furthermore, ECs are priced lower than private condos because ECs have cheaper construction and land costs. This has helped keep the prices of ECs lower than those of private condos.

They have lower land prices

ECs are new housing projects developed and sold by private developers with government subsidy. These projects come with condo-like amenities, but at cheaper prices. In fact, former National Development Minister Khaw Boon Wan likens ECs to Lexus cars. However, unlike private condos, ECs are HDB properties for their first 10 years. This means they are subject to certain HDB rules and eligibility schemes, including the 5-year MOP rule. Additionally, ECs are bound by the resale levy and selling restrictions.

ECs have a lower entry cost and are better suited for middle-income families. The cost of ECs is significantly lower than those of private condos, so they provide a good alternative for buyers with limited budgets. In addition, they can take advantage of CPF Housing Grants.

They require a lawyer to build

If you are considering ECs for investment purposes, there are some things that you need to know before you buy. The first thing that you need to know is that ECs are a little different from private condos. First of all, ECs aren’t mass-marketed. Instead, they are a niche market, which means that there is a lot more legal work involved.

The next thing you need to know about ECs is that they have rules regarding how they can be used. You should know that these rules can restrict your use of the unit, such as no pets or rent it out. Furthermore, you need to be aware of the rules regarding renovations and changes.