Owning a private condominium is something many Singaporeans aspire towards, with good reason. Many private condominiums come with an extensive range of lifestyle facilities – enough to rival country clubs in some cases – with comprehensive options to cater to residents’ varied needs. What’s more, putting one’s money in a property is seen by some as a form of investment.
Executive condominiums (ECs) are another property type some buyers may use as a stepping stone to owning a home with on-site facilities.
First-time home buyers are eligible for certain HDB grants when they purchase an EC. However, the disbursed grant money must be returned to the buyer’s CPF account together with accrued interest when the EC is sold.
CAPITAL APPRECIATION OF PRIVATE CONDOMINIUMS VS ECS
As demonstrated by the data trends above, the prices of private condominiums on a per square foot (PSF) basis have appreciated by 156 per cent since 2004 while ECs have fallen behind at 133 per cent.
A few factors could contribute to this, including the limited pool of buyers who can purchase ECs – ECs can only be sold to foreign buyers after 10 years.
With a smaller pool of buyers within the first 10 years, supply could outstrip demand, resulting in lower capital appreciation in comparison to their private condominium counterparts.
CONDOS MAY BE MORE ACCESSIBLE LOAN-WISE
Condo loans are subjected to the Total Debt Servicing Ratio (TDSR). TDSR states that total monthly payments on all loan payments (including new property loans) must not exceed 60 per cent of total gross income.
On top of the TDSR, loans taken for EC purchase have to fulfill the more stringent Mortgage Service Ratio (MSR) criteria. MSR must not exceed 30 per cent of the buyer or buyers’ monthly gross income.
The loan amount obtained under MSR guidelines could be lower as compared to the loan amount governed by TDSR. As a result, a property buyer could potentially obtain a larger amount when purchasing a private condo as opposed to buying an EC.
LOWER OPPORTUNITY COST
Unlike ECs, private condominium owners can sell their property at any time, subject to the Sellers’ Stamp Duty that imposes a 12-per-cent tax for the sale of the property within the first year, eight per cent in the second year, and four per cent in the third year. This allows more flexibility for owners who wish to cash in on their property.
For property buyers who do not wish to be locked-in by the five-year Minimum Occupancy Period (MOP) upon handover on top of the two- to three-year construction time for ECs, buying a private condominium may be a more viable move.
The owner of a private condominium has the flexibility of being an owner-occupier or using it as an investment property to rent out. Home goals do sometimes change – a property buyer may have purchased a private condominium intending to stay in it. An alternative arrangement or life change may spur the buyer to rent out the unit instead.
However, if one opts to buy an EC, the MOP restricts owners from selling or renting out the whole EC during this period.
Also, two persons owning a private condominium have the option of decoupling – which involves transferring one’s share in the property to the other person. Decoupling usually means the other party is able to buy another home without incurring Additional Buyers’ Stamp Duty.
NO RESALE LEVY
Unlike buyers of ECs, buyers of private condominiums do not have to pay a resale levy.
A resale levy is imposed on second-time EC applicants who had previously bought a new flat from HDB, Design, Build and Sell Scheme (DBSS) flat, an EC from a developer or received a CPF Grant.
STUNNING RIVER VIEWS WITH AN ATTRACTIVE PRICE POINT
In today’s property climate, Riverfront Residences’ per square foot pricing starting from just over S$1,100 psf hits the sweet spot for property buyers looking to purchase a private condominium.
The sprawling piece of land was bought at S$575 million, which works out to S$706 per square foot per plot ratio (psf ppr) – the lowest land sale registered in the north-east region. For slightly over S$1 million, buyers can avail themselves to a three-bedroom unit at Riverfront Residences and reap the benefits of being a private condominium owner.
Riverfront Residences has the twin benefits of being perched on the banks of Sungei Serangoon with its sweeping river views and being nestled in the mature estate of Hougang with its well-established amenities and infrastructure.
The Cross Island Line is also expected to revolutionise the commute between the north-east region and the eastern and western parts of Singapore, increasing accessibility and decreasing commute time. What’s more, the upcoming digital and innovation hub – Punggol Digital District – will be a 10-minute drive away.
Whether you’re looking for a competitively-priced private condominium to live in or for investment, head on down to the Riverfront Residences showflat located at Upper Serangoon Crescent (opposite Block 471A), open daily from 10am to 7pm. Alternatively, visit the Riverfront Residences website or call +65 6438 0202 for more information.
This advertorial was produced in partnership with 99.co.