Q: Why do many homebuyers still see ECs as an attractive option?
A: ECs have consistently provided strong capital appreciation over time. Take the case of Mr. Chong’s son, who bought a three-bedroom unit at Hundred Palms Residences in 2017 for an average price of $841 psf. Fast forward to 2025, and recent transactions have been hitting an average of $1,769 psf, marking a staggering 110% price gain in just eight years!
Even resale ECs have seen strong appreciation. Mr. Chong’s youngest son purchased a resale unit at Twin Fountains in Woodlands for $1,000 psf in 2021, which was considered high at the time. However, in 2025, recent transactions have reached $1,344 psf, a 30% price increase.
Q: With EC prices rising, is the price gap with private condos still attractive?
A: While EC prices have gone up, they are still more affordable than private condos in the same region. According to ERA’s Eugene Lim, the median price of an EC unit (900-1,000 sq ft) is around $1.48 million, compared to $2.1 million for a similar-sized unit in a private condo. This means there is still a 42% price gap between the two, making ECs a compelling choice for HDB upgraders.
However, the gap has been narrowing over time. In 2023, ECs were 49.4% cheaper than private condos. By 2024, the difference had dropped to 44.2%, and as of January 2025, it is now 43.6%. This suggests that ECs are appreciating faster than private condos in the OCR (Outside Central Region).
Q: What financing challenges do EC buyers face in 2025?
A: While ECs remain a good buy, affordability has become a bigger challenge due to rising prices and financing restrictions. The household income ceiling for ECs is $16,000, and buyers must meet both the Mortgage Servicing Ratio (MSR) cap of 30% and the Total Debt Servicing Ratio (TDSR) cap of 55%.
For example, a 30-year-old EC buyer earning the maximum $16,000 household income can only borrow up to $1 million under the current MSR rules. This means they must fork out a larger cash down payment, especially with rising EC prices.
Q: Why do HDB upgraders still prefer ECs over private condos?
A: One major advantage of buying an EC is that HDB upgraders do not need to pay Additional Buyer’s Stamp Duty (ABSD) when purchasing a new EC. In contrast, those upgrading to a private condo must first sell their existing home or pay the 20% ABSD upfront and apply for a refund later.
Additionally, EC buyers have the option of using the Deferred Payment Scheme (DPS), which allows them to delay mortgage payments until after the EC is completed. This flexibility makes upgrading much easier compared to private condos.
Q: With only three EC launches expected in 2025, should buyers act fast?
A: Yes, supply remains tight. In 2025, only three new EC launches are expected in Tampines, Pasir Ris, and Tengah, providing limited opportunities for buyers. Given the affordability of ECs relative to private condos, demand is expected to remain strong.
🔑 Key Takeaways
✅ Strong Capital Appreciation: ECs have seen price increases of 30-110% over the years.
✅ Still More Affordable Than Private Condos: Despite rising EC prices, the 42% price gap makes them a great value buy.
✅ Financing Restrictions: Higher prices and MSR/TDSR limits mean buyers need to prepare for larger upfront costs.
✅ No ABSD for HDB Upgraders: Unlike private condos, EC buyers avoid the 20% ABSD and enjoy a Deferred Payment Scheme (DPS).
✅ Limited Supply in 2025: With only three new EC projects launching this year, demand is likely to remain high.
Thinking of upgrading to an EC or exploring your options? Let’s chat today! 📩📞
(source)