We’re expecting at least four EC launches before the year is out, and a big question now is how they’re impacted by new cooling measures. Are they in fact a better choice for asset progression, or should you still stick to fully private condos? Here’s a quick re-take on an old consideration, with 2022 changes in mind:With regard to overall investment potential, we have an earlier article detailing the performance of 53 ECs. That’s still relevant as it was only a year ago.
As a loose rule of thumb, this is about the price point for a new EC, which is often 20 per cent below a private condo. As such, most HDB upgraders will have to sell their flat first, find temporary accommodation, and then move on to buy their unit. The main benefit of full privatisation, which occurs after the 10th year for ECs, is that HDB-like restrictions are lifted from buyers. This means, for example, that an EC unit can be sold to a foreigner, or a company .Affluent foreigners who buy high-end condos are probably not going to buy ECs; this batch of buyers are focused on the luxury market. This leaves the middle to upper-middle income foreigners as buyers of mass-market condos, including ECs.
For buyers of ECs, however, HDB loans are not an option. If you buy an EC, you have to take a bank loan. And if you’re an owner-investor, looking for asset progression, then it’s time to educate yourself on issues such as repricing, refinancing, and understanding different loan packages.