Nearly all ECs resold in the past 15 years made a profit averaging $300k: Nearly all Executive Condos resold in the past 15 years made a profit averaging SGD300,000.
This is a staggering statistics that could explain why Copen Grand in Tengah gets 2,300 applicants for its 639 units project. Who does not love to make money !!
The statistics from Orange Tee, a top property agency in Singapore, also shows that the most number of ECs sold for a profit had a holding period of fewer than 10 years.
Nearly all ECs resold in the past 15 years made a profit averaging $300k : 99.9% of all ECs made money
In summary, 4,263 units or 99.9 per cent of the executive condominium (EC) units sold in the resale market between 2007 and end-August 2022 yielded an average gross profit of $295,904 each.
Of this number, 294 units yielded a gross profit of at least $500k each. That is a cool half a million dollars profits in the space of less than 10 years.
ECs in Singapore can be sold to locals after 5 years (like a HDB public housing) and then to any one after 10 years (like a private condo). Read about the rules of Executive Condominiums here.
Even more impressive was that in 2021, the gross profit of a Tampines resale EC hit a record $1.38m whilst another unit at Choa Chu Kang was resold for a gross profit of $1.02m !! These are million dollars profits which can drive even more sales in other private projects or even HDB resale market. This might explain the cooling measures in Sep 2022.
Nearly all ECs resold in the past 15 years made a profit averaging $300k : Why are ECs so attractive
Although average resale price for ECs is 28% lower than leasehold condominiums ($1,389 psf), price growth for ECs is stronger. Average resale price for ECs has grown 50% since 2012, compared to 35% for leasehold condominiums. Hence, ECs are not only affordable but also an asset that offers strong capital appreciation.
Executive Condominiums (ECs) are popular in Singapore for several reasons:
Affordable Option
ECs offer a more affordable housing option compared to private condominiums. They are subsidized by the government and typically priced lower than similar-sized private condominiums, making them attractive to middle-income families who aspire to own a private-style living space at a more affordable price.
Amenities and Facilities
EC developments often come with a range of amenities and facilities comparable to private condominiums. These may include swimming pools, gyms, function rooms, and landscaped gardens, providing residents with a desirable living environment and a wide range of recreational options.
Strong Government Support
ECs are part of the public-private hybrid housing scheme in Singapore. The government provides land at subsidized prices to developers, allowing them to offer ECs at more affordable prices. This support from the government contributes to the popularity of ECs among homebuyers.
Capital Appreciation Potential
Over time, ECs have shown the potential for capital appreciation. As ECs have a minimum occupation period before they can be sold to the open market, this can create a demand-supply imbalance and potentially drive up prices in the resale market. This makes ECs an attractive option for buyers looking for a property with potential capital appreciation.
Upgrading Opportunity
After fulfilling the minimum occupation period, EC owners have the option to sell their unit and upgrade to a private property, such as a private condominium or landed property. This opportunity for future upgrading makes ECs appealing to buyers who view it as a stepping stone towards their long-term housing goals.
These factors contribute to the popularity of Executive Condominiums in Singapore, as they provide an affordable and attractive housing option for middle-income individuals and families, backed by government support and the potential for future capital appreciation and upgrading opportunities.
Upcoming EC launches
The EC market has not seen new launches for a while but Copen Grand and Tenet are expected to be launched this quarter. Both ECs are in very different locations. Copen Grand is in the up-and-coming Tengah town in the west region, while Tenet is in the mature housing estate of Tampines in the east region.
And then watch out for the launch of Altura EC in Bukit Batok too.
These are exciting times in Singapore property market indeed.
