Are ECs Still Worth Investing In? Buyers Still Flock In Despite Record-High Prices

Are Executive Condominiums (ECs) Still Worth Buying? Prices Are Rising, but the Investment Value Remains Strong

In recent years, Singapore's Executive Condominium (EC) market has continued to heat up, with strong buying interest showing no signs of waning. Against a backdrop of climbing prices and tightening borrowing limits, are ECs still a worthwhile purchase?

EC Prices Continue to Rise with Significant ROI, Retaining a Distinct Price Advantage Over Private Condos

Even with rising prices, ECs maintain a clear price advantage over private condominiums. For instance, the median price of a 900 to 1,000 sq ft EC unit stands at around S$1.48 million, compared to approximately S$2.1 million for a private condo of similar size—a price gap of 42%.

According to property market data, the average price of new non-landed private residential homes in the Outside Central Region (OCR) crossed S$2,200 psf in 2024, whereas the median price for new ECs stood at S$1,539 psf, representing a 44.2% price difference.

The price gap between ECs and private condos has narrowed somewhat in recent years. In 2023, EC prices were 49.4% lower than private condos; this gap contracted to 44.2% in 2024, and narrowed further to 43.6% by January 2025.

Higher Entry Barriers, but Demand for ECs Remains Robust

As EC prices climb, buyers face higher downpayments and more stringent financing criteria. Currently, EC buyers must meet the S$16,000 household income ceiling, while adhering to the Mortgage Servicing Ratio (MSR capped at 30%) and the Total Debt Servicing Ratio (TDSR capped at 55%).

Assuming a 30-year-old buyer with a household income of S$16,000 and a maximum loan tenure of 30 years under a 4% stress-test interest rate, the maximum loan amount would be around S$1 million. This implies that buyers need to cough up a higher proportion of cash/CPF upfront.

Nevertheless, HDB upgraders remain keenly drawn to ECs, largely because they are not required to sell their existing flats upfront and can avoid paying upfront Additional Buyer's Stamp Duty (ABSD). Furthermore, EC buyers can opt for the Deferred Payment Scheme (DPS), requiring only the initial downpayment while loan repayments commence only upon project completion, significantly easing short-term financial pressure.

Soaring Prices in one-north, Woodlands and Beyond: ECs Remain the Value-for-Money Choice

In October 2024, City Developments Limited (CDL) launched the 348-unit private condo Norwood Grand at Champions Way in Woodlands, achieving an 84% take-up rate on its launch weekend at an average price of S$2,067 psf. This launch price was 53.8% higher than recent resale EC transactions at Twin Fountains, highlighting the formidable pricing edge ECs offer.

In addition, major government infrastructure initiatives, including the Johor Bahru-Singapore Rapid Transit System (RTS) Link, have significantly enhanced the appeal of the Northern region.

Outlook for the EC Market

Three new EC projects are slated for launch in 2024 across Tampines, Pasir Ris, and Tengah, offering geographically diverse supply to cater to different buyer preferences.

Despite rising price points, ECs remain exceptionally attractive to HDB upgraders and first-time buyers thanks to their lower entry costs, strong capital appreciation potential, and favourable tax treatment. Moving forward, as private home prices continue to trend upward, the EC segment will see sustained resilient demand and remain an exceptional choice in Singapore's property landscape.