HDB recently revised its housing policies that will be in effect as of September 11, 2019. The newly revised HDB housing policies make housing increasingly affordable and accessible. This increases the pool of people who are “stuck” between resale HDBs vs Executive Condominiums or ECs. Buying a flat requires a great deal of financial planning. Hence, we will provide you with 7 key things to consider between Resale HDBs vs Executive Condos.
1. Eligibility
Resale HDBs VS Executive Condos: More eligibility schemes available for Resale HDBs
The eligibility schemes available for each type of housings differ between resale HDBs and ECs. Falling within one of these 4 HDB eligibility schemes would make you eligible for both housings:
Public Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You must be either a Singapore Citizen (“SC”) or a Singapore Permanent Resident (“PR”) |
| ≥ 1 occupant who is also either an SC or PR | ||
| If all the occupants and owners are PRs, all of you need to have been PRs for ≥ 3 years | ||
| You must form a “family structure” through one of these three ways: Spouse and Children, Parents and Siblings or Children under your legal custody | ||
| EC | ≥ 21 years old | You must be a SC |
| All your co-applicants must also be SCs | ||
| You must form a “family structure” through one of these three ways: Spouse and Children, Parents and Siblings or Children under your legal custody |
Fiancé/Fiancée Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You and your fiancé/fiancée must be either a SC or a PR |
| If both of you are PRs, both of you must have been PRs for ≥ 3 years | ||
| Your fiancé/fiancée must be either a co-applicant or an occupant | ||
| EC | ≥ 21 years old | You and your fiancé/fiancée must be SCs |
| Your fiancé/fiancée must be either a co-applicant or an occupant |
Orphans Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You must be a SC |
| ≥ 1 SC or PR sibling as a co-applicant or occupant | ||
| One of your deceased parents must have been a SC or PR | ||
| You must not have another sibling who is also | ||
| EC | ≥ 21 years old | You must be a SC |
| Your siblings must be your co-applicants and must be single |
Joint Singles Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You and all your co-applicants must be SCs |
| If you are an orphan or widowed | ||
| For orphans, one of your deceased parents must have been a SC or PR | ||
| You must not have another sibling who is also | ||
| ≥ 35 years old | If you are unmarried or divorced | |
| EC | ≥ 35 years old | You must be a SC |
| Your co-applicants must also be SCs |
Additionally, if you fall within these 3 other eligibility schemes, you are also applicable to buy resale HDBs:
Single Singapore Citizen Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You must be a SC |
| If you are an orphan or widowed | ||
| For orphans, one of your deceased parents must have been a SC or PR | ||
| You must not have another sibling who is also | ||
| ≥ 35 years old | If you are unmarried or divorced |
Non-Citizen Spouse Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You must be a SC |
| Your spouse (occupant) must have a valid long-term visit or work pass with a ≥ 6 months validity from the date of issue | ||
| ≥ 35 years old | Your spouse (occupant) must have a valid visit or work pass but does not need to have a 6 months validity from the date of issue |
Non-Citizen Family Scheme
| Age | Citizenship | |
|---|---|---|
| Resale HDB Flat | ≥ 21 years old | You must be a SC |
| ≥ 1 parent or child must have a valid long-term pass or work permit with a ≥ 6 months validity from the date of issue | ||
| You must form a “family structure” with either your parents and siblings or children under your legal custody |
Besides age and citizenship, income ceilings and property ownership rules also determine your eligibility to buy resale HDBs and ECs.
| Income Ceiling | Property Ownership | |
|---|---|---|
| Resale HDB Flat | No income ceiling | Any occupant that possess another HDB flat or private property locally or overseas, must get rid of these properties within 6 months of the purchase of the resale HDB flat |
| EC | 16000 | You cannot possess or have an interest in another property (local or overseas) |
| Or, you must not have gotten rid of any property within the last 30 months | ||
| If you are a second-timer house applicant, you can only receive one CPF Housing Grant previously or have possessed or is possessing one other housing unit (HDB flat, resale HDB flat with CPF Housing Grant, an EC unit, a Design, Build and Sell Scheme (DBSS) flat) before you applied for the EC unit |
From the tables above, a larger pool of people seems to be eligible for resale HDBs rather than ECs. For instance, if you are single, you can only consider resale HDBs. You will only be eligible to buy ECs if you combine with other singles to form either “family” units. Similarly, non-Singapore Citizens can only consider resale HDBs. Even if you can afford both ECs and resale HDBs, you might only be limited to purchase resale HDBs.
2. Available Grants
Resale HDBs VS Executive Condos: More Housing Grants available to finance the purchase of Resale HDBs, making resale HDBs more affordable
HDB offers several housing grants to make housing more affordable. The amount of financial help you receive affects your ability to afford each type of housing.
| Types of Housing | Grants Available | Income Ceilings |
|---|---|---|
| Resale HDB Flats | CPF Housing Grant | $14,000 for families |
| $7,000 for singles (≥ 35 years old) | ||
| Enhanced CPF Housing Grant (EHG) | $9,000 for families | |
| $4,500 for singles (≥ 35 years old) | ||
| Proximity Housing Grant (PHG) | N.A. | |
| EC | Family Grant | $12,000 if both you and your partner are SCs |
| $11,000 if you are a SC and your partner is a PR | ||
| Half-Housing Grant | $12,000 if you are a first-timer SC and your co-applicant is a second timer (ST) who has previously received 1 housing subsidy | |
| You can apply for Citizen Top-Up of $10,000 when a qualifying member obtains Singapore citizenship, but you need to apply within 6 months of eligibility |
For the purchase of resale HDBs, the housing grants available are CPF Housing Grant, EHG and PHG.
If your monthly household income falls below $9,000, you will be eligible for all these 3 housing grants. This means that for families, you can receive up to $160,000 in grants. If you are a single whose monthly household income falls below $4,500, you will be eligible for all these 3 housing grants too. This means that you can receive up to $80,000 in grants. Furthermore, you can now receive EHG regardless of the location and type of HDB flats. However, your resale HDB flat’s remaining lease must cover the youngest occupant until 95 years old.
For the purchase of ECs, the housing grants available are Family Grant and Half-Housing Grant.
With the conditions that your monthly household income is below $12,000 and both, you and your partner are SCs, you can receive up to $30,000 in grants. However, if you are an SC and your partner is a PR, you can only receive up to $20,000 in grants. This comes with the condition that your monthly household income is below $11,000.
The Half-Housing Grant allows you to receive up to $15,000. This comes with the assumption that your monthly household income is below $12,000 and that the first-timer applicant is an SC. You can then apply for Citizen Top-Up of $10,000 when a qualifying member obtains Singapore citizenship. However, you will need to apply within 6 months of eligibility.
Other than income ceilings, these housing grants also have other eligibility criteria that you must meet that are similar to those of the HDB eligibility schemes.
3. Housing Loans
Resale HDBs VS Executive Condos: You can only use a bank loan to finance the mortgage for ECs.
For ECs, you can only use a bank loan to finance its mortgage. For resale HDBs, you can use either an HDB Concessionary Housing Loan or a bank loan to finance its mortgage.
The downside of taking up a bank loan is that it forfeit your ability to refinance your loan with an HDB housing loan. However, taking up an HDB housing loan allows you to refinance your loan with a bank loan. The upside of taking up a bank loan would then be that it has no income ceiling. As opposed to taking up an HDB Housing loan, families and singles under the Single Singapore Citizen Scheme must have income ceilings of $14,000 and $7,000 respectively.
The main difference between HDB housing loans and bank loans is the Loan to Value (LTV) ratio. There is an LTV limit of up to 90% of the flat price or value if you took up an HDB Housing Loan. This means that you will only need to deposit 10% of the flat price or value by cash, CPF Ordinary Account (OA) or both. Meanwhile, there is an LTV limit of up to 75% using bank loans. This means that you will need to deposit 25% of the flat price or value, of which 5% must be in cash payment. The remaining 20% can be paid through your CPF OA, cash or both.
Note that you cannot use housing loans to pay for the Cash Over Value (COV) which is the difference between a flat price and its value. The amount of HDB Housing Loan you receive depends on how much the remaining lease can cover for the youngest occupant until 95 years old. You are ineligible for an HDB Housing Loan if your resale HDB flat has less than 20 years lease.
4. Remaining Lease
Resale HDBs VS Executive Condos: ECs have a higher remaining lease compared to resale HDBs.
The remaining lease of your flat affects your financial planning. EC units have 99-years lease while resale HDB flats have leases that are below 99 years. To use CPF to buy HDB flats, the flat units must have at least a 20-year lease.
The remaining lease of the flat unit determines the amount of loan you can get to finance your purchase. It also determines the value of your flat unit after the 5-year Minimum Occupancy Period (MOP). The 5-year MOP requires owners to live inside their flats for at least 5 years before proceeding with resale or rental purposes. If the remaining lease of the flat unit gets lesser, the value of your flat unit will drop. This makes the flat less appealing to potential flat buyers.
In this aspect, ECs are more attractive to potential flat buyers. This is because of its privatised status after 10 years and its higher remaining lease.
5. Intentions
Resale HDBs VS Executive Condos: EC units appreciate much faster than resale HDB flat units.
If you are planning to buy a flat unit for resale or rental purposes, you need to consider the appreciation value of the flat units.
EC units appreciate much faster than resale HDB flat units. When EC units become “privatised” after 10 years, you are free to sell and rent it out in the way you want. This increases your flat value as competition for your housing unit increases. You can now sell these units to even corporations and foreigners.
Whereas, resale HDB flat units do not appreciate as much since their remaining lease will be much lower than 99 years. Since resale HDBs are considered public housing, you can only rent or resell these units to Singaporeans or PRs. This makes the pool of potential resale HDB flat buyers much smaller than the pool of potential EC buyers.
If you are planning to purchase a flat for a long term stay, the appreciation value of the flat unit will matter less. Factors like the price, location, and remaining lease of the flat will have greater importance.
6. Type of Lifestyle
Resale HDBs VS Executive Condos: ECs require a more expensive lifestyle.
Another important consideration would be the type of lifestyle that you are willing to settle for.
Though ECs seem to give you a more luxurious lifestyle, it is a much more expensive one. This is because ECs have the same private facilities as private condominiums. ECs are even more appealing than private condominiums because they are much cheaper and larger since they are built for “families”. However, the downside of ECs is that they are usually located in the more remote areas of Singapore. This causes inconvenience in traveling, especially without private transport.
Meanwhile, there are no private facilities available within resale HDBs. Instead, various amenities are surrounding the neighbourhood for the community. Resale HDBs are usually located in mature estates since they are likely to have been around longer than ECs. Some of these shared amenities include community clubs that provide public facilities like gyms, dance studios, and swimming pools. Resale HDBS are usually located nearer to public transport like MRTs and LRTs, making it easier to travel.
Resale HDBs might not give you the illusion of a more lavish lifestyle but it allows you to save up more for your future. ECs give you the illusion of a more luxurious lifestyle but it causes financial strains on you in the future.
7. Maintenance fees
Resale HDBs VS Executive Condos: EC units cost much more to maintain than resale HDB units.
The monthly maintenance fees of your flats play an important role in your financial planning since they are expenses that you must set aside monthly.
The maintenance fees of EC units are comparable to the maintenance fees of private condominium units. It can go up to $400 monthly depending on the management councils. Whereas, maintenance fees of resale HDB flat units, can go up to $90 monthly depending on the town councils.
Whether the maintenance fees are worth it for ECs is subjective. If you envision that you will be a frequent user of EC facilities, the maintenance fees might be worth it. Otherwise, you might want to consider resale HDBs.
Conclusion: Resale HDBs VS Executive Condos
Ultimately, you need to factor in most importantly, your financial ability. If you find yourself struggling financially just to live a tad more lavishly, you might want to reconsider your decision. Spending on ECs will require you to sacrifice many other material aspects of your life. There are many advantages to living in resale HDB flats. Resale HDBs are usually located in mature estates that consist of many public facilities. Make sure that you research thoroughly before making an informed decision between resale HDBs and ECs.
Also, here are some additional property tips in Singapore for your next property transaction.
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