Should a First Time Property Buyer Choose an EC Over a Private Condo?
When choosing between an EC and a private condominium, there are several important things to consider such as Bukit Batok EC. First, ECs are subsidized by the government, which makes them cheaper than private condos. Second, ECs offer a more private and flexible living environment.
ECs are subsidized by the government
Because ECs are government subsidized, they are generally priced at a discount to nearby private condominiums. Despite the recent rise in EC prices, the price differential between these properties and private condos still remains high. The primary reason for this is that buyers compare ECs to private condos, based on the perceived upside potential of the project once it becomes fully privatized. In addition, developers compete for lucrative plots of land, so the cost of land is factored into the selling price.
Singapore’s EC scheme was introduced to bridge the price gap between public housing and private condominiums. These units were built on land sold by the government and have similar facilities and services to private condos. However, ECs come with some restrictions that private condominiums do not have. For instance, the purchaser must live in an EC for 10 years before being allowed to sell it to a foreigner or local.
Subsidies to production and consumption lower end-use prices and reduce incentives to conserve energy. While there are some cases in which subsidies are justified, governments generally intervene in the energy markets to achieve their social and environmental objectives or fix problems. In these circumstances, subsidies can be justified if the benefits to society outweigh the costs.
Government subsidies vary from country to country, but they can have significant social and environmental impacts. In developing countries, government subsidies to modern cooking fuels reduce indoor air pollution and cut down on time spent collecting fuel. That frees up time for productive activities. Further, subsidized fuels reduce the costs of producing energy.
In some countries, subsidies to fossil fuels are large. However, subsidies to renewable energy are on the rise. The motivations behind these subsidies include energy security, environmental concerns, and regional employment goals. For example, the United States and several European countries have generous subsidies to the biofuel industry.
Subsidies can also influence politics. Some pressure groups claim that the government subsidises the production of a certain product because of its political impact. Big business often donates to politicians and promises benefits in return. This means that subsidized fuels are a prime target for politicians looking to cut taxes.
UNEP and IEA have co-organized regional workshops to discuss reform of energy subsidies. The booklet contains key messages for policy makers and raises awareness of these issues. The booklet was published in April 2001 as a submission to the ninth session of the United Nations Commission on Sustainable Development.
ECs are cheaper than a private condo
For a first-time property buyer, an EC is a cheaper option than a private condo. ECs are typically priced lower due to grants, and they can be resold for the same price as a private condo after five to ten years. However, they have a five-year minimum occupancy period (MOP) that will prevent them from renting out their entire unit, while a private condo does not have this restriction.
ECs can be sold to foreigners after 10 years. As they are government-controlled, they also have different land costs. As such, developers have to be conservative with their prices. However, this discount narrows to about nine percent after the MOP, and just five percent after privatization.
To purchase an EC, you must have at least $221,250 in cash. This includes the buyer’s stamp duty, which is $21,150. ECs are also not eligible for HDB loans, so you will need to secure a bank loan. Be prepared to pay higher interest rates than with a private condo.
An EC is cheaper than a private condo for a buyer’s first purchase, but a first-time buyer will still have to pay an option fee. It can be paid in cash, by cheque or with a cashier’s order. Alternatively, the option fee can be paid from a Central Provident Fund savings account.
The lower cost of ECs makes them an excellent option for a first time property buyer. While private condominiums are often more expensive, they are also more spacious and suitable for larger furniture. However, they are further away from the city center and public transportation facilities. In addition, many residents prefer to use their own vehicles to get around.
In addition to being cheaper than a private condo, an EC is also easier to obtain. First-time property buyers may find them more affordable if they use their current HDB flat as collateral. However, there are restrictions on the number of ECs a buyer can have in his or her portfolio. A first-time buyer can apply for up to $30000 in CPF housing grants when buying an EC.
Another advantage of an EC is that it can be resold as a private condominium after five or ten years. This will increase the capital appreciation of the property and allow for a larger pool of potential buyers. Additionally, an EC can be rented out like a private condo, meaning that it will earn you a nice rental yield.
ECs offer more privacy and freedom than a private condo
ECs are generally cheaper to buy than private condos. In addition, they tend to appreciate in value over time. One downside is that you cannot rent out your EC for the first five years. However, after this period, you can sell your EC in the open market.
While both types of property offer many benefits, they do come with their drawbacks. While many people prefer the communal aspect of living in an EC, some find that it is safer for the elderly or young to live alone. Also, many people value the privacy that comes with a private house.