Price Gap Between New ECs and Private Condos Widens
The study conducted by STPRoperty showed that there is a widening gap between the prices of newly launched Executive Condominiums and Private Condo projects. If compared with how it was in 2011, the prices of condo units have increased dramatically. As seen on the study, EC buyers could have saved up to 37.1% on average had they purchased private condo units. This is significantly higher than 2011’s 23.1% difference. This study also showed that ECs might be the better option for prospective buyers for those aspiring sandwiched class who failed to qualify for the public housing program but do not have the financial capability to acquire condo units.
As consultants have put it, the difference of the price between EC and condo is simply a result of the restrictions imposed on their sales and rentals. Adding to these is the subsidy provided by the government. According to the law, buyers of EC must live in the unit for at least 5 years without renting it out to someone else or acquiring private residential property. Afterwards, the unit may then be offered for sale to either Singaporeans or those who have been granted with permanent residency. After 10 years, the owner of the EC may then sell it to anybody.
Ong Kah Seng, the director of RST Research, stated “The (STProperty) data doesn’t exactly capture these limitations. It’s also an opportunity cost”.
Nicholas Mak of SLP International added that data might just be an “apple to pear” comparison. Other factors might affect the price difference such as the unit mixes of the private condominium units.
The possible savings was actually determined by considering the difference in the median transaction prices of private condominiums and ECs starting from January 2014 to September 10 and dividing it to the average prices of new condominiums year-to-date. Moreover, only states where EC and condo units were transacted during the year have been considered.
The study has also led to discover of the small difference between the price of EC offered for resale during the year and the available private homes. The average resale price of ECs is 10.5% lower than a condo project unit with 99 years of leasehold.