Construction cost of executive condos 20% cheaper than private homes

Today’s EC discount is $150‐$200psf, or $100‐$150psf.

According to square Foot Research, executive Condominiums (ECs), widely considered to be private properties at a discount, are not exactly the same as private properties if construction cost is anything to go by.

The average construction cost for an EC is about 20% lower compared to that of a private property, based on contracts announced by listed construction companies. 

The average cost in building an executive condo is $209 psf while that of a private home is $256 psf.

"Therefore, a part of the EC discount compensates for the difference in the quality of the product compared to a private property. The remaining part of the discount compensates for the expected holding period and restricted resale market from the fifth to tenth year after completion. The expected holding period is significant and can be as long as 9 years, assuming a 4‐year construction period and theimposed 5‐year Minimum Occupation Period (MOP)," it said.

"Recent launches suggest that today’s EC discount is $150‐$200psf, or $100‐$150psf if one takes into account a construction cost difference of about $50psf," it added.