Is buying a resale EC still profitable?

Buying a resale Executive Condominium (EC) in Singapore can still be a profitable venture, depending on several factors and the timing of the purchase and sale.

Immediate Post-MOP Period

Resale ECs tend to see significant price appreciation in the first year after the Minimum Occupation Period (MOP) of five years. During this period, the average simple rate of return can be as high as 5.74%, and the compounded annual growth rate (CAGR) peaks at 4.87% due to strong demand and limited supply of resale ECs.

Long-Term Growth

ECs have demonstrated sustained price growth over the long term. From 2015 to 2024, the median prices of all resale ECs achieved a CAGR of 6.6%, outperforming the CAGR of private resale condominiums. This growth is driven by factors such as inflation, economic growth, and improvements in infrastructure and amenities surrounding these developments.

Market Conditions

The current market conditions, including a lower interest rate environment and favorable government policies, continue to support demand for ECs. The price gap between ECs and private condominiums has narrowed in some areas, making ECs more competitive and potentially more valuable over time.

Optimal Holding Period

The optimal time to sell an EC to maximize profits often occurs within the first year post-MOP or around the full privatization window (5-7 years post-MOP). However, ECs launched before 2006 have shown consistent value increase over 20 years, indicating long-term growth potential.

In summary, buying a resale EC can be profitable if you consider the timing, market conditions, and the specific development's potential for growth. It is crucial to stay informed about market trends and the performance of specific EC projects to make an informed decision. For detailed insights and transaction data, you can refer to EdgeProp Singapore.