Executive condos still a popular pick, but how high will prices go?
This segment is likely to stay firm from sustained demand from HDB upgraders, but may find a new level with fresh sites being released and the effects of the Trump tariffs
[SINGAPORE] Executive condominiums (EC), a type of public and private housing hybrid, are typically the first port of call for many eligible homebuyers seeking affordable entry into the private residential property market. Indeed, EC projects usually enjoy healthy take-up rates when they are launched for sale.
In March, the first EC project launch of 2025 – Aurelle of Tampines – enjoyed robust demand, shifting 90 per cent of its 760 units at an average price of S$1,766 per square foot (psf) over its launch weekend. This is the highest take-up rate since Hundred Palms Residences, which sold out on its launch day in July 2017. In fact, the 682 units sold at the launch of Aurelle of Tampines is probably the highest number on record for a new EC project.
Although the prices of new ECs have been steadily rising, the prices of new mass-market private homes have not stood still either. As the saying goes, a rising tide lifts all boats, and the increase in prices in both segments generally tracked the upswing in the overall property market over the years.
Price gap between new ECs and new private condos still large
The median unit price gap between new ECs and that of 99-year leasehold new non-landed private homes in the Outside Central Region (OCR) came in at 33 per cent in the first quarter of 2025 (till Mar 16), going by URA Realis data.
Generally, the objective of ECs – to cater to the private housing aspirations of the “sandwiched class” – remains intact, in that it offers a more affordable private-housing option for Singaporean households than other new launches.
Over the last year, prices of new ECs have hit a new high; the average price of units sold at the launch of Aurelle of Tampines was S$1,766 psf.
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Compared with other new private condos, the price quantum of new units at Aurelle at Tampines is still relatively lower. The larger four- and five-bedroom unit types were transacted from around S$1.7 million to S$2.4 million, and all such units were sold out. The three-bedders went for S$1.4 million to S$1.6 million during the launch.
However, given the 30 per cent mortgage servicing ratio (MSR) and monthly household income cap (S$16,000), a borrower could take out a bank loan of about S$1 million, based on an interest rate of 4 per cent per annum and a 30-year loan tenure. This suggests that this buyer may need to fork out a tidy sum upfront; it is likely that younger buyers without substantial savings may require some financial support from their parents.
Cost-push factors impact EC prices
As a product, ECs have a proven track record of attracting a stable pool of buyers, and many developers are keen to bid for such sites. However, in bidding for these plots, they are wedging themselves between the devil and the deep blue sea, in that their land bid needs to be weighty enough to top the other bids to secure the site, but yet not be too aggressive as to price out prospective buyers down the road.
Over the years, the land rates of government land sales (GLS) EC sites have climbed and gone on to breach new highs. The record is now held by the Tampines Street 95 EC plot, at S$768 psf ppr.
Apart from the uplift in the overall property market, another potential reason for the higher land rates could be that several EC GLS sites in recent years are in more attractive locations, as transport infrastructure is improving with the addition of new MRT lines and stations.
It is also possible that the Deferred Payment Scheme (DPS) may have contributed slightly to the pick-up in EC prices. Buyers who opt for the DPS pay a 20 per cent down payment on the purchase price, with the rest of the payment deferred till after the project obtains its temporary occupation permit (TOP). There is usually a 3 per cent price premium under the DPS.
The proportion of buyers who take up the DPS for their purchase at EC project launches rose from around 40 to 48 per cent in 2021 to more than 60 per cent for launches in 2022 and after. This roughly coincided with the period interest rates rose sharply, following hikes by the US Federal Reserve. Buyers could have opted for DPS to better manage their cashflow and perhaps to ride out the higher interest rates.
In view of the firm land prices of upcoming EC launches and high construction costs, EC prices in all likelihood could continue to creep up. Of note, the rules on the harmonisation of gross floor area definitions will also lead to the bumping up of the psf price due to a reduction in saleable area.
However, with the loan limits and income ceiling at the present level, there is a limit to how far developers can raise prices before buying interest starts to wane – but exactly where the affordability threshold lies is hard to predict, particularly if buyers have other sources of funds such as parental help.
ECs continue to show strong capital growth potential
Apart from the more affordable entry price, new ECs may be appealing because of their capital growth potential. Since resale ECs tend to book healthy gains on the secondary market, some buyers may perceive new ECs as a copper-bottomed purchase. This type of property could well be part of an asset progression plan for HDB upgraders looking to recycle proceeds from the sale of their flat to buying an EC.
Based on PropNex’s analysis of some 2,000 resale EC transactions in 2024, the vast majority of the deals booked gains, with only one loss-making transaction – the unit was resold at S$20,000 below the last purchase price, according to caveats lodged.
Notably, there were 43 transactions that achieved a profit of at least $1 million. The deal that scored the largest gain in 2024 was for a 22nd floor unit at Windermere in Choa Chu Kang, which booked a profit of S$1.73 million when it was resold last June.
Market outlook
Following Aurelle of Tampines, one other new EC project – in Plantation Close, next to Novo Place EC – is slated for launch this year. Next year, there are two upcoming EC projects in Jalan Loyang Besar and Tampines Street 95; both may command average selling prices above S$1,750 psf because of their elevated land rates (S$729 and S$768 psf ppr, respectively), and their compelling locations near amenities and MRT stations.
Nonetheless, sustained demand from first-time buyers and HDB upgraders is expected to continue to put the wind in the sails of the EC market. With the government offering more EC sites – three plots, up from one in the previous half-year – on the Confirmed List of the Government Land Sales programme in the first half of 2025, it is hoped that this could rein in land bids and keep EC prices on an even keel.
While the EC segment is expected to remain resilient, the potential tariffs-related impact on the global economy and overall market confidence bear watching.
Ismail Gafoor is CEO, and Wong Siew Ying is Head, Research and Content at PropNex
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