How much do you need to earn to buy a new or resale Executive Condo (EC)?

Thinking of upgrading from an HDB flat, but find that buying a condo is too expensive? Your best bet is to get an Executive Condo.

A hybrid of public and private housing, Executive Condominiums (EC) come with condo facilities, but are cheaper than condos as they’re subsidised. Just like HDB flats, you can take CPF Housing Grants to buy a new EC.

And the best part about getting a new Executive Condo? You don’t have to pay the Additional Buyer’s Stamp Duty (ABSD) upfront when you’re upgrading. The caveat is that you have to sell your flat within six months. After 10 years, the EC becomes fully privatised like condos, allowing you to sell it to foreigners.

On the other hand, since they’re considered public housing, new ECs have a few restrictions similar to HDB flats. This includes the five-year Minimum Occupation Period (MOP), income ceiling of S$16,000, and Mortgage Servicing Ratio (MSR).

MSR restricts the property loan amount you can take for an HDB flat or a new EC. So you can only borrow up to 30% of your monthly income for your home loan.

At the same time, you can only take up a bank loan to pay for an EC, meaning you can only get 75% financing. So what’s the minimum income to afford an EC?

The estimated minimum income to buy a new Executive Condo in 2021

You can calculate this by working backwards. Based on the price of the EC, you can find the maximum loan amount you can get. After that, calculate the monthly instalments using 99.co’s mortgage calculator to derive the minimum income you need to buy an EC.

For illustration purposes, we’ll use the average price derived from three-bedroom transactions for new ECs in the first half of 2021. The new ECs are:

• Ola
• Parc Canberra
  
• Parc Central Residences
  
• Piermont Grand
  
• Provence Residence
  

(We don’t include Parc Greenwich here as it’s just launched over the weekend. Prices started at S$1.05 million for three-bedders.)

Estimates are based on the following assumptions:

• The full 75% financing is taken to maximise the loan-to-value (LTV) ratio
• The loan comes with a 30-year tenure
• The loan comes with a medium-term interest rate of 3.5%, as advised by MAS
• There are no other housing loans to be paid
• CPF grants are not taken into account

Average price of a three-bedroom new EC (from 99.co’s Researcher): S$1.133 million

Loan amount: 75% of the property price or value = S$849,750

Downpayment: 25% of the property price or value = S$283,250

Estimated monthly instalment: S$3,815

Min. gross monthly income to meet the 30% MSR: S$12,717

Disclaimer: Do note that these estimations are based on the average price, which may be higher or lower than the actual price of the EC. We recommend that you calculate based on the actual price to determine if it’s within your means. 

(Curious about how much you need to earn to buy other types of properties? We’ve crunched the numbers on the estimated monthly income to afford an HDB resale flat or a condo previously.)

How about resale ECs? 

We consider resale Executive Condos as those that have passed the five-year MOP and entered the resale market, but they haven’t passed the 10-year mark yet. As mentioned earlier, these units can only be sold to Singaporeans and PRs, like resale flats.

But unlike new ECs, resale ECs don’t have as many restrictions, such as the MOP and having to dispose of your existing flat. Find out more about the differences between new and resale ECs here.

More importantly, you’re not subjected to the 30% MSR requirement. Instead, you’ll have to meet the total debt servicing ratio (TDSR), which limits the total amount of loans you can service in a month. Currently, the TDSR is capped at 60%. So compared to the MSR, it gives you more affordability to buy a resale EC.

The estimated minimum income to buy a resale Executive Condo in 2021

We calculate it the same way as the new EC, but based on the transactions of three-bedroom resale ECs in the first half of 2021. So this would include ECs that have TOPed from 2012 to 2016, such as:

• The Rainforest
  
• 1 Canberra
  
• The Canopy
  
• Twin Waterfalls
  
• Prive
  
• Waterwoods
  
• Esparina Residences
  
• Heron Bay
  
• The Tampines Trilliant 
  
• Watercolours
  

Estimates are based on similar assumptions:

• The full 75% financing is taken to maximise the LTV ratio
• The loan comes with a 30-year tenure
• The loan comes with a medium-term interest rate of 3.5%, as advised by MAS

But instead of the MSR, you’ll be subjected to the 60% TDSR. So for illustration purposes, let’s assume that there are no other loans to service, including property loans, car loans, personal loans and student loans.

Average price of a three-bedroom resale EC (from 99.co’s Researcher): S$1.039 million

Loan amount: 75% of the property price or value = S$779,250

Downpayment: 25% of the property price or value = S$259,750

Estimated monthly instalment: S$3,499

Min. gross monthly income to meet the 60% TDSR: S$5,832

Disclaimer: Do note that these estimations are based on the average price, which may be higher or lower than the actual price of the EC. We recommend that you calculate based on the actual price to determine if it’s within your means. 

Alternatively, you can find out more about how much loan you can get based on your monthly income using 99.co’s affordability calculator here.

Would you prefer to buy a new EC or resale EC? Let us know in the comments section below or on our Facebook post. 

If you find this article helpful, 99.co recommends Buying resale EC vs new launch: The key differences you need to know and Has the price gap between private and executive condominiums changed?

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