When it comes to choosing between a private condo and an executive condominium (EC), what factors should potential buyers consider? Both types of properties have unique advantages and challenges. However, private condos may sometimes be viewed as more affordable today, based on several key aspects worth considering.
Private condos are fully private properties from the get-go, enjoying no government subsidies or restrictions. This means that, unlike ECs which are bound by certain rules during the first decade, buyers of private condos can expect a more straightforward purchasing process. Additionally, private condos can be sold to anyone, even foreign buyers, providing flexibility that makes them an appealing investment.
Private condos offer full ownership without government constraints, ensuring a seamless buying experience and broader market options.
On the financial side, private condos typically come with a higher price tag than ECs, which are about 25-30% cheaper on average. However, this price gap has been narrowing, and when considering financing options, private condos offer a different set of circumstances. While there are no housing grants available for private condos, they do not face the same Mortgage Servicing Ratio (MSR) limitations as ECs. This can allow some buyers to make their property purchase without facing strict financial constraints. Moreover, unlike ECs, which require a 5-year Minimum Occupation Period before being able to rent them out, buyers of private condos can start generating rental income immediately. With rising interest rates affecting overall property affordability, this financing flexibility becomes increasingly important for potential buyers.
Another enticing aspect of private condos is the potential for instantaneous rental income. Unlike ECs, which have a five-year Minimum Occupancy Period (MOP) before properties can be rented out, private condos enable immediate rental opportunities. The demand for private condos has increased this ability increases their attractiveness, especially to investors looking for liquidity in their investments.
Location also plays a significant role; private condos are generally situated in prime areas with better access to MRT stations and amenities. For individuals seeking convenience and modern living, these locations often outweigh the lower initial cost of an EC.
In a nutshell, while ECs may appear cheaper upfront, several factors—from financing flexibility to rental potential and prime location—can make private condos the more affordable option in the long run.
