To begin with, what actually is an EC? How is an EC compared to a private condo? Is it a poor cousin of the latter, or an improved version of a Housing Development Board (HDB) flat laced with some embellishment to make it look like a private condo? Can an EC match the quality of a “proper” condo?
Step into an EC showflat today, you probably would be able to answer at least half of the above questions, veering in favour of EC! To begin with, the quality and finishing are comparable to that of a typical Singapore new launch. Go a step further into the facilities, well you will be pleasantly surprise. Full-fledged amenities, that is.
Let’s move on to the dollars and cents. New ECs are on the average 20%-25% cheaper than a private new condo of comparable locations. For example, a suburban new launch will set you back in the range of $1,000 psf while an EC goes for about $750 psf. Taking a 1000 square feet unit, the price difference is a whopping $250,000! And if we factor in the government grant of $30,000 for first-time buyer, we are looking at a saving of $280,000 for just about the same level of quality and facilities.
So it looks like ECs beat private non-landed new property hands down. Well not necessarily so. Let’s probe further.
ECs come with restrictions. For example, family nucleus is a pre-requisite where there are various tiered conditions required. Then there is the household income ceiling of $14,000. Next we have the extremely tight mortgage limitation that allows only 30% of monthly income as the monthly repayment amount. What about the 10-year period needed before an EC is fully privatized? And the restriction on other property ownership of the main applicant and occupiers?
In short, the stringent EC requirements put many people out of range. So private condos, be it a Singapore new launch or a resale unit, is still the way to go.