New or resale executive condominium: Which is a better investment?

Data from Huttons showed that the gross gain for the first owners of an EC unit was $322,220.

“Buy new for better gains.” This was the advice of Huttons Asia to buyers eyeing to purchase executive condominiums (ECs) either as an investment or for their use.

Data from Huttons Asia showed that first owners of EC units had larger average gross gains ($322,220) than second owners ($261,948). 

Upon reaching the five-year minimum occupation period (MOP), the average gross gain of first owners yearly can exceed $300,000. Second owners, on the flip side, will have to wait for at least four years to see an average gross gain close to $300,000.

“The first owners of an EC unit can make even larger average gross gains of more than $500,000 when the EC is approaching the 10-year mark,” Huttons Asia said.

“For those considering between a new and resale EC unit, the evidence points to new EC units as a more superior option,” the expert added.

To avoid losses, Huttons Asia advised buyers to avoid selling their EC units before the MOP.

Data from the real estate expert’s report showed that of the 5,300 matched transactions since 2010, three ECs sold by first owners recorded losses.

All three transactions took place before reaching the five-year MOP.

“Another observation was that the average gross gains of EC sold before MOP by the first owners were lower than those after MOP,” Huttons Asia said.

“The average gross gains of EC tend to increase with a longer holding period. The average gross gains appeared to be the highest once the EC is 10 years and older. This is probably due to a wider pool of buyers as foreigners are now eligible to buy. Owners should bear this in mind and avoid selling before MOP if they can,” it added.