The buzz over the launch of a record $2.05 million "presidential penthouse suite" at a Tampines executive condominium (EC) yesterday has shone the spotlight on the market for such properties.
Interest in ECs has surged this year, with buyers drawn by potential price gains and fancy designs that rival those at private condos.
The record prices paid for new launches have also sparked controversy over whether buyers of expensive ECs should be entitled to Housing Board (HDB) grants.
"It's almost a given that if you buy an EC today and wait 10 years, you could make a quarter of a million dollars in profit," said Prop-Nex chief executive Mohamed Ismail.
Introduced in 1995, ECs were created to meet the aspirations of the so-called "sandwich class" who might not qualify for public housing but find private property beyond their reach.
Units at new EC launches are typically 20 to 25 per cent cheaper than comparable 99-year leasehold private condominiums, due to Housing Board restrictions on ECs such as a household monthly income cap of $12,000.
They can be sold to Singaporeans and permanent residents (PRs) after five years. After 10 years, they can also be sold to foreigners.
This is unlike HDB flats, which cannot be sold to foreigners who are not permanent residents for their entire tenure.
The price gap between ECs and private condos, however, is narrowing, analysts said, meaning that the investment gains from buying an EC could be smaller in future.
For chief technical officer Kim Kerh Chay and his family, price was the deciding factor when they bought their 2,400 sq ft penthouse at Windermere in Choa Chu Kang in mid-2010.
Mr Kim, 55, lives there with his 51-year-old wife, who is a homemaker, and his two sons.
His elder son Lawrence Kim, a 30-year-old entrepreneur, told The Sunday Times: "It all boils down to price... After 10 years, it becomes a private condo, there's no difference. The facilities are also the same."
The family bought the unit on resale for $1.14 million. The price, Mr Lawrence Kim said, was roughly what its previous owner paid for it at launch.
Since then, its value has shot up around 40 per cent to between $1.55 million and $1.65 million. The family aims to sell it for $1.8 million and then upgrade to a semi-detached house in Bukit Timah.
Analysts said investors see ECs as a value buy especially if the project has high-end features, since the price gap between ECs and private condominiums narrows as an EC approaches its 10-year mark, when it becomes fully privatised.