Rising EC Prices: Can the Sandwich Class Still Afford Them?

EC Prices on the Rise, Yet Remain the Top Choice for the "Sandwich Class"

Executive Condominiums (ECs) in Singapore have once again taken centre stage in the property market. With transaction prices hitting record highs, the price gap between ECs and mass-market private homes is narrowing—shrinking from 64% in 2017 to 33% today.

However, experts emphasize that even so, ECs remain the most attractive homeownership option for local "sandwich class" families.

As of 3 August this year, the median price for new EC launches stood at $1,754 psf, compared to $2,330 psf for new private homes in the Outside Central Region (OCR)—a gap of about 33%. In other words, despite rising prices, ECs still offer better value for money than mass-market private condos.

Why Are EC Prices Rising?

Analysts point out that factors driving up EC prices include:

Robust market demand: ECs have consistently been popular among local families.

Limited supply: With few land parcels released each year, competition among buyers is intense.

Rising land costs: Bids for recent EC land parcels have repeatedly broken records.

Broader market upswing: The overall rise in private home prices has lifted EC prices in tandem.

For instance, earlier this month, the top bids for the EC sites at Woodlands Drive 17 and Senja Close came in at $782 psf per plot ratio (ppr) and $771 psf ppr respectively, both setting new benchmarks. Analysts predict that future projects on these sites could fetch selling prices of around $2,000 psf.

Quantum Gap Narrows as Unit Sizes Prove Crucial

Notably, when looking at overall lump-sum prices (quantums), the gap between ECs and mass-market private homes is narrowing considerably. Year-to-date, the median transacted price for EC units is around $1.654 million, compared to $1.879 million for mass-market private homes—a difference of just 14%.

The reason behind this is unit size: ECs are notably larger. The smallest EC unit sold this year measured 840 sq ft, whereas the smallest private home unit was just 388 sq ft—nearly half the size. Consequently, while the difference on a per-square-foot basis remains substantial, the overall price quantum gap continues to shrink.

Resale Market Also Seeing Strong Demand

Beyond new launches, the EC resale market is equally buoyant. A total of 1,021 EC resale transactions were recorded in the first half of this year, up slightly by 1.7% year-on-year. Notably, Hundred Palms Residences in Yio Chu Kang set an EC resale record in June at $2,039 psf. However, transactions breaching the $2,000 psf mark remain the exception rather than the norm.

Outlook: EC Policies and Buyer Affordability

Recent government discussions on whether to raise the monthly household income ceiling for Build-To-Order (BTO) flats have spurred market speculation over whether the EC income ceiling will be adjusted in tandem. Should it be raised, demand for ECs could strengthen even further.

However, experts caution that if EC prices continue to escalate rapidly and the gap with mass-market private condos narrows too much, it could dilute the fundamental purpose of ECs and jeopardise affordability for "sandwich class" buyers with household incomes below $16,000.

ECs are inherently subsidised housing. If prices climb too high, they risk losing their original intent as a stepping stone for middle-income families.