Windfalls for Executive Condos Buyers

Executive condos (ECs) are widely considered as a golden ticket for Housing Board (HDB) upgraders, with roughly 300 units earning S$500,000 in resale profit as of August 29. This figure is based on the fact that as of that date, there were no units that had been sold.

According to a study of earnings conducted by OrangeTee, almost all of the 4,266 ECs that were examined made over S$300,000 in gross profits. This is due to the fact that demand far exceeds supply.

Out of these 4,266 units, there were a total of 294 that generated profit at least S$500,000 per unit. A unit CityLife@Tampines brought in a record gross profit of S$1.38 million for an executive condominium in 2021. This was followed by another unit at The Quintet, which click in S$1.02 million profit.

About 4,001 of the units that were examined were sold in less than ten years from the date of purchase.The price disparity between newly purchased and previously owned ECs is expected to decrease to 14.4 percent in the first eight months of 2022, down from 28.6 percent in 2019.

The median price of resale executive condominiums is also growing faster than the price of newly constructed executive condominiums. This price has increased by 30.3% to S$1,115 per square foot (psf) in the first eight months of 2022, up from S$856 psf in 2019. In contrast, the price of newly constructed ECs increased by 15.9%, from S$1,101 psf to S$1,276 psf over the same comparable period.

According to the findings of the research, size does important when it comes to the demand for such properties since larger units have a tendency to fetch higher prices. 170 executive condominiums (ECs) with a minimum of 1,600 square feet each generated an average gross profit of S$455,207 per unit. Executive Condo home buyers who are looking at bigger size unit with more condo facilities can explore Copen Grand which is scheduled for launch in October 2022.

Those with floor plans ranging from 1,200 to 1,599 square feet generated an average gross profit of S$362,997, while the 2,717 units with floor plans ranging from 800 to 1,199 square feet generated an average gross profit of S$268,493 per.

ECs, which are a combination of public and private housing, are constructed by private developers but are offered at prices that are lower than those of private condominiums. A project funded by the EC is allowed to be privatized ten years after its completion, at which point it may be sold to outside investors.

The gains versus losses of individual EC units for the purpose of conducting profitability analyses. This was accomplished by matching the new sale caveats provided by URA Realis between 2007 and August 21, 2022 to the resale caveats, if any, provided by the same unit for the same time frame. The computation did not take into account the price of interest or attorney’s fees.

OrangeTee was able to successfully match 4,266 caveats extracted from a database containing 26,882 new EC transactions. The other EC apartments were either not placed up for sales or did not have a caveat registered against them when they were first purchased.