Under what scenarios should I get a Resale Executive Condo?
- You need to move in right away
- Or if you are aware that EC will be fully privatized from the 11th year onwards and you wish to cut down on the waiting time
Before you go ahead to purchase a resale EC, here are some key pointers that you need to take note of!
- It is closer to full privatisation
- You do not need to sell away your existing flat
- No MOP (minimum occupancy period)
- No CPF Housing Grant
- Allow different payment scheme
- Able to physically inspect the units compared to New condos
#1 Closer to full privatisation
Executive Condominium is fully privatised after 10 years. This means that you will be able to sell your Condominium to others in 5 years or less, depending on when you purchase the Executive Condo.
This is different from an HDB resale flat. HDB flat can only be sold to another Singapore citizen or permanent resident even if the MOP (Minimum Occupancy Period) is over.
Of course if you purchase a BRAND NEW condo, you will have to wait for 10 years before you can sell it off to someone else.
#2 You do not need to sell away your existing flat
Executive Condos are subsidized by HDB when it is bought over from the developer, therefore before moving into your NEW EC, you have to get rid of your current HDB flat. Vice versa, if you own an existing HDB flat and bought a new EC, you have to dispose the HDB flat within 6 months.
However, if you purchase a RESALE EC that is past it’s MOP, you can retain your current flat while owning the RESALE EC.
Important note: In order to invest in a 2nd property, you will still be required to meet the MOP of your current flat. This applies to both RESALE EC or private Condo.
#3 No Minimum Occupancy Period
An EC minimum occupancy period only applies to the 1st batch of buyers. So when you purchase a resale EC, it would normally be in its 6th year onwards.
Although it is not yet fully privatized, you have the option to either sell your unit to an open market or rent out the unit anytime.
When you purchase a new EC, you’ll need to wait out the 5-year MOP. Therefore, for investors who wish to yield maximum profits from rental will prefer to purchase a resale EC than a new one.
#4 No CPF Housing Grants
The grants that you can get for EC is significantly much lower compared to a HDB flat. To view more or understand about grants you can go to the HDB website.
#5 Different Payment Schemes
New ECs will follow the Progressive Payment Scheme (PPS). The monthly loan will start at lower rate and increases as it progresses through each phase of the development. This is 1 advantage of new ECs as loan is more affordable at the start.
Resale EC uses the standard payment scheme for private property. Without existing home loans, you will pay 25% downpayment (5% in cash) & get up to 75% financed by the bank.
HDB loans are not applicable for Condominiums. Only bank loan.
#6 Able to physically inspect the units compared to New condos
One main advantage is the ability to inspect the actual unit before buying. You will not be blind sided by any defects that comes from poor workmanship.
So, would you buy a resale Executive Condominium in the coming years? Hope this article turns out useful for you.
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