Bought at $550k, sold at $2.1m: EC units resold for $1m profit double

SINGAPORE — The number of executive condominium (EC) units resold for at least $1 million in gross profit more than doubled to 38 in 2024, from 15 in 2023, according to PLB Research data.

The research arm of real estate firm PropertyLimBrothers noted that there were just six such deals in 2022 and fewer than five annually in previous years.

As at Jan 24, 2025, there have been 85 EC units resold with a profit of $1 million and above since the EC scheme was introduced.

A highlight of 2024's EC resale market was a record-breaking transaction at Bishan Loft on Dec 5. A four-bedroom unit fetched $2.16 million, making it the most profitable EC resale to date.

Originally bought for $549,277 at $399 per sq ft (psf) in 2001, the unit generated a 293 per cent profit of $1.61 million.

Three other resale units at Bishan Loft posted profits of between 274 per cent and 286 per cent. All four homes were bought in 2001 at relatively low prices, which analysts believe played a significant role in their high resale gains.

Industry experts attribute the soaring prices of resale ECs to several factors. The rising land costs for developers have driven up new EC prices, making older ones appear more affordable by comparison.

Location is also key, with Bishan Loft, for example, near Bishan MRT station and reputable schools, said Christine Sun, chief researcher and strategist at property firm OrangeTee Group.

The limited supply — only 72 completed EC projects — and strong demand for these hybrid public-private housing projects have further fuelled price increases.

The numbers reflect the trend, as the Urban Redevelopment Authority's (URA) monthly developer sales data showed 1,244 new EC units were sold in 2024, surpassing the 1,016 launched that year.

Resale transactions were also robust, with 2,102 units changing hands in 2024, up from 1,985 in 2023 and 2,051 in 2022.

Prices have climbed, with the median transacted unit price rising from $885 psf in 2020 to $1,337 psf in 2024, according to URA's data.

The buoyant resale volume came amid higher prices in the private housing market that have made acquiring non-landed homes more out of reach for first-timers and upgraders, with even heartland condos fetching over $2,000 psf at launch.

In December 2024, a 35-year-old owner sold her 958 sq ft EC unit at Hundred Palms Residences in Yio Chu Kang after it reached the minimum occupation period (MOP), making over $1 million in gross profit.

"My husband and I were surprised at the offer and how quickly the sale went through. At that time, there were about... 10 other units for sale at Hundred Palms Residences," said the owner, who wanted to be known only as Mrs Lee.

The gain allowed the couple, who paid $818,300 for the three-bedroom unit in 2017, to snap up a four-bedroom unit in a private condominium.

The sale set a new record psf price of $1,900 for a resale EC unit. PropNex agent Zacson Ong described the deal as "the quickest I have done".

He added: "The buyers — a young couple — made several offers for the unit without even viewing it.

"I had around 10 groups of interested buyers who were to attend the open house. But this couple were so eager to close the deal that they made an offer the seller couldn't turn down, and we ended up cancelling the open house."

As resale ECs continue to deliver strong profits, market watchers expect more owners to cash in.

Melvin Lim, co-founder and chief executive of PropertyLimBrothers, cautioned, however, that while ECs are often seen as a profitable investment, they do not always guarantee gains.

"In reality, around 1,000 owners who purchased EC units at launch ended up selling at a loss instead of making a profit," he added.

PLB Research found that about 1,000 resale EC deals since 2000 resulted in losses.

Those sold between 2004 and 2008 were particularly vulnerable due to market volatility and slower price recovery following events like the dot.com crash in 2000, the severe acute respiratory syndrome (Sars) outbreak in 2003 and the global financial crisis in 2008.

Fourteen EC projects, including Yew Mei Green, Simei Green and Northoaks, recorded loss-making transactions, while the remaining 58 EC projects had profitable deals.

PLB Research also found that longer holding periods tend to yield higher returns.

But given the relatively lower entry cost compared with private condos, new EC launches continue to hog attention. Tampines EC project Aurelle, which is scheduled for launch on March 8, drew more than 5,000 people to its show-flat on Feb 22 and 23.

Developer Sim Lian Group paid $543 million, or $721 psf per plot ratio (psf ppr) for the plot, setting a new price record for the EC site in Tampines Street 62.

This was 9.4 per cent higher than the $659 psf ppr paid for the adjacent Tenet EC, which was launched in 2022 and was fully sold at an average psf price of $1,383. 

At Aurelle, at an indicative price of $1,687 psf, a three-bedroom unit could cost $1.417 million.

At the preview, property agents highlighted the price gap of over $760 psf between Aurelle and Parktown Residence, a new private condominium about 1km away.

Launched on the same Feb 22-23 weekend, Parktown Residence, developed by UOL, Singapore Land and CapitaLand Development, sold more than 87 per cent of its 1,193 units at an average price of $2,360 psf in two days.

However, would-be EC buyers still have to work out their affordability sums.

Ms Sun noted that with the mortgage servicing ratio (MSR) capped at 30 per cent of a borrower's monthly income and total debt servicing ratio (TDSR) at 55 per cent, potential buyers of ECs may face limitations on the amount they can borrow.

"Based on the current MSR and TDSR, buyers taking a 30-year loan may be eligible to borrow up to $1 million.

"Those looking to purchase a new condo will likely need to supplement the balance payment with cash," she added.

"We have observed more second-time buyers purchasing new ECs... Buyers who already own a flat and can sell (it) for a profit will be in better financial standing, compared with first-time buyers. We have also observed more buyers of new ECs receiving financial support from families and relatives," she noted.

When The Straits Times visited the Aurelle showflat on Feb 23, there was a diverse group of visitors — from middle-aged families with children in tow to young couples in their 20s.

Many said they were attracted to the lower entry price of ECs, compared with new private condo launches.

One prospective buyer, Darren Tan, said the decision to go for ECs over private condos is a practical one.

"With EC prices at almost 40 per cent lower than private condos', it makes sense to buy an EC. My wife and I believe the value of property will continue to appreciate, and we hope to upgrade once our unit reaches MOP," added the IT professional who is in his 30s.

Rise and rise of ECs

ECs are a hybrid of private and public housing built by private developers, but sold at lower prices than private condos. The buyers' monthly household income must not exceed $16,000.

Eastvale in Pasir Ris was the first EC to obtain its temporary occupation permit in January 1999. PLB Research said there are currently 72 ECs.

EC buyers have to meet an MOP of five years before they can sell their properties to Singaporeans and permanent residents. They can sell or rent to foreigners only after their ECs are privatised from year 11.

This article was first published in The Straits Times. Permission required for reproduction.