Private and Public Housing | Differences Between ECs & HDB Flats in Singapore

Property | Real Estate | Singapore

Singapore is one of the most expensive housing markets in the world. If you’re ready to buy your first home in Singapore, you’re just one home loan away. But this also means that you have to work your way for the rest of your life. On the plus side, if you’re looking to invest in real estate, expensive housing can mean big pay-offs. You may be wondering what is the difference is between purchasing private property and purchasing public housing such as HDBs. In this blog, we tell you five differences between private and public housing.

Private Properties in Singapore

Residential properties in Singapore are divided into two categories. One is public housing (HDB flats) and the other is private housing. Private housing refers to condominiums, landed property, and executive condominiums. Executive condominiums (ECs) are only treated as full-fledged private properties after the 11th year. Prior to that, ECs were subject to some of the rules governing public housing.

Public Housing in Singapore(HDBs)

Public housing is provided by the Housing Development Board. And such apartment units are affectionately referred to as HDBs or HDB flats. When you buy public housing, you usually get a variety of grants and subsidies. Also, if you have CPF savings, you can use them to pay for your home instead of paying cash upfront.

Five Differences Between Private and Public Housing:

Home Loan Difference

Bank loans are the only way to finance all types of private properties, including ECs. There is no HDB concessionary loan available, so you must obtain a bank loan. However, there is a Minimum Occupancy Period for public housing (MOP). Before you can rent or sell the entire flat, you must first live in it for five years. Note that the fine print also states that you must be based in Singapore. A resale tax is also levied. This reduces the amount of housing grants (subsidies) you receive when you purchase another public housing unit.

Leasehold vs. Freehold

HDB flats have a 99-year lease. You might be able to find freehold land for private property. Some properties dating back to the Colonial Administration may also have a 999-year lease. So far, only a few properties have approached the 99-year lease expiration date. Many people believe that in land-scarce Singapore, freehold properties will continue to outperform leasehold counterparts in value.

Grants Only to HDBs and not to Private Properties

Obviously, government grants are not available for private and not public housing. However, when it comes to ECs, things get a little more complicated. Although ECs are financed by bank loans and become private after the 11th year. And they can still be purchased with grants. EC grants range from $5,000 to $30,000, depending on your income level. One of the main reasons for their popularity is that they are the only type of private housing that is subsidized by the government.

Foreigners are not Permitted to Purchase HDB Flats

Expats are generally not permitted to purchase landed property. Foreigners are also barred from purchasing HDB flats unless they marry a Singaporean. However, they can purchase condos. They only have to pay a hefty 20% ABSD (Additional Buyer’s Stamp Duty).

Know these differences between private and public housing and invest your hard-earned money carefully in the real estate market here in Singapore.


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