Investment potential of executive condominiums

6 Oct 2022
The supply of new ECs will remain limited, notes real estate agency OrangeTee & Tie. Apart from the newly launched North Gaia (above) in Yishun Close, most ECs are either sold out or have only a handful of units left. 

EXECUTIVE condominiums (ECs) are highly attractive to HDB upgraders for their affordability and investment potential. While new ECs are equipped and furnished like private homes, they are priced about 20-30 per cent lower than private condominiums.

Due to the widening price gap between condominiums and ECs, more people have been buying ECs in recent years. Resale ECs have also grown in popularity among local and foreign tenants.

Why more HDB upgraders are buying ECs

Flat owners may find it easier to upgrade to private condominiums, since resale flat prices have been rising over the past year. Based on the HDB resale price index, prices of resale flats have risen nine consecutive quarters from Q1 2020 to Q2 2022.


Moreover, more resale flats have been sold for at least S$700,000. HDB data from showed that 3,911 HDB resale transactions were recorded in 2021, and 3,067 transactions were inked in the first eight months of this year. Last year, 1,840 flats were sold for at least S$800,000.

As more flats are sold at higher price tags, flat owners do not need to top up a lot of money to buy a private home, especially for an EC. ECs are a hybrid of public and private housing sold at lower prices than private condominiums, despite being built by private developers. An EC project is privatised 10 years after its completion; thereafter, units in the development can be sold to foreigners.

Eligible buyers of new ECs usually comprise a Singaporean citizen and at least one other Singapore citizen or permanent resident. Buyers are not allowed to hold other properties, and are subjected to restrictions such as eligibility requirements, income ceiling, a minimum occupation period and a mortgage servicing ratio (MSR), in addition to the total debt servicing ratio (TDSR).


Some HDB upgraders may now find it more affordable to upgrade to an EC, since newer and bigger resale flat prices rose faster than EC prices over the past three years. The median price of bigger resale flats – the four-room, five-room, executive and multi-generation flats – below 20 years old rose by 32.2 per cent from S$450,000 in Q2 2019 to S$595,000 in Q2 2022.

Over the same period, prices of new ECs grew more slowly, at 26.2 per cent; resale EC prices climbed by 29.3 per cent, caveat data from URA Realis showed. Therefore, flat owners – especially those who sold their flats for more than S$800,000 – may pay less than S$500,000 to upgrade to a new EC.

HDB upgraders may find it more affordable to upgrade to an EC

Moreover, flat owners do not incur Additional Buyers’ Stamp Duty (ABSD) when they purchase a new EC. In comparison, those who wish to upgrade to private properties before selling off their flat will have to pay ABSD as the flat is considered their first property. Although buyers can apply for an ABSD remission upon selling their flats, not everyone has the financial means to pay the ABSD upfront.

If they were to purchase a new EC, flat owners could continue to own and live in their HDB flat while they wait for the completion of their new EC home. However, they will need to dispose of their existing flat within six months of taking possession of the EC unit.

Substantial capital appreciation

The capital appreciation of ECs can be quite significant after the five-year minimum occupation period (MOP) or upon privatisation. ECs can be highly profitable since they are bought at substantially lower prices than private condominiums, given the generous subsidies from the government.

Over the past three years, the median price of resale ECs grew by 30.1 per cent from S$856 per square foot (psf) in 2019 to about S$1,114 psf in the first eight months of this year.

Demand for ECs is up

As resale prices continue to climb, many homeowners have sold their ECs in recent years. We saw a surge in resale transactions from 783 units in 2019 to 2,291 units in 2021. Many of these resale ECs were sold to other HDB upgraders. For instance, more than 60 per cent of the 783 resale ECs that changed hands in 2019 were bought by buyers with HDB addresses. This number grew to 1,248 transactions in 2020 and rose further to 2,291 units in 2021.

Demand for resale ECs will likely remain strong, as those who are not eligible to buy a new EC or wish to buy an affordable private condo will turn to the resale EC market. EC homeowners are unlikely to face difficulty finding a buyer in the future.

Strong rental demand

Resale ECs are similarly growing in popularity among tenants. These ECs generally offer more competitive rental rates than condominiums. The number of EC rental transactions surged by 14.4 per cent from 1,531 transactions in 2019 to 1,751 transactions in 2021. In the first seven months of 2022 alone, 1,010 resale ECs have already been leased.

The strong rental demand has driven the median rents of ECs higher, increasing by 32 per cent from S$2,500 per month in 2019 to S$3,300 per month in the first seven months of 2022.

New ECs will remain attractive

New ECs may continue to attract buyers as the price gap between new and resale ECs is closing. The price gap between new and resale ECs was 22.9 per cent in Q1 2021, narrowing to 9.4 per cent in Q2 2022.

Moreover, the supply of new ECs will remain limited. Apart from the newly launched North Gaia at Yishun Close, most ECs are completely sold or have only a handful of units left. Only two EC projects are slated to be launched by the end of this year – Copen Grand at Tengah Garden Walk; and Tenet, the new EC in Tampines Street 62. Subsequently, the next EC project launch may take place next year for a site at Bukit Batok West Avenue 8.

Other land parcels have yet to be sold, including a site at Tengah Plantation Loop, which is still on the Confirmed List of the Government Land Sales Programme for H2 2022. Two more sites, at Tampines Street 62 and Senja Close, are on the Reserve List.

While new cooling measures have been implemented on Sep 30, 2022, the impact on new ECs is likely to be limited. Although TDSR and MSR will be further tightened – which may reduce the amount that buyers can borrow – interested buyers may raise funds through other sources to purchase a unit or purchase smaller units. Many buyers are aware of the investment potential of ECs. In addition, the supply of ECs is limited. Therefore, demand for new ECs may continue to be robust in the long term.  

Upcoming EC launches

Copen Grand and the new EC at Tampines Street 62 will be launched by end of this year. The 639 unit-Copen Grand is the first EC to be built in Tengah. It is nestled within a new built-up area, where many new flats and amenities are slated to be completed.

The Tengah precinct is set to be a “car-lite” town with smart and sustainable living features. This EC is also within walking distance of three MRT stations on the Jurong Region Line. Copen Grand is near the Jurong Innovation District and Tengah town centre. As private housing is lacking in the area, buyers will have a first-mover advantage of owning the first private homes.

The EC in Tampines Street 62 is near the upcoming Tampines North MRT. The Tampines North precinct will be developed into a new housing estate with new community facilities and leisure amenities. A mixed-use development in Tampines Avenue 11 will be launched for tender by the Government Land Sales programme in December 2022, bringing an estimated 14,000 square metres of commercial space to the Tampines North area down the road.

There has been a dearth of new EC supply in Tampines. The last EC launched in Tampines was Parc Central Residences in 2021, which sold out. With over 6,000 flats in Tampines and Pasir Ris reaching their MOP between 2019 and 2022, we expect strong upgrader demand in the future.

Christine Sun is senior vice-president (research and analytics); Timothy Eng is assistant manager (research and analytics) at OrangeTee & Tie.




Copen Grand EC (Tengah Garden Walk)

Land Sold on 3 June 2021

Land Cost: $603 psf ppr

CDL and MCL Land

99 Years Leasehold

Booking Day : 22 Oct 2022

Tampines North Hub


Tenet EC (Tampines St 62)

Land Sold on 3 August 2021

Land Cost: $659 psf ppr

Qingjian and Santarli

99 Years Leasehold

Previewing 12 Nov 2022

Property Review SG