Condo vs Apartment & Does It Matter?

Singaporeans are an ambitious bunch. If I am entitled to speak on behalf of my generation, I believe there is always that constant desire to upgrade and do better. That applies to all aspects of our lives, including our residential dwelling. Most young couples start off with a BTO, which takes about 5 years to build from their time of application and another 5 years to fulfil its Minimum Occupancy Period (MOP). Thus, most couples will have about 10 years of salary increments and savings to stash away for their next dream home.

Then comes the next question – what kind of property should we upgrade to? In this post, I focus on the non-landed private residential segment, which is the preferred choice for HDB upgraders because of its affordability and amenities compared to landed housing.

But are all non-landed homes the same and does it really matter?

If these are foreign terms to you, it’s probably time to get acquainted with them – condominiums and apartments – and what are some of the differences?

1. Condominium

• To qualify as a full-fledged condominium, ALL of these criteria have to be met.
• Size: The land area must be at least 4,000 sqm (~45,000 sqft). The largest condominium by size is D’Leedon at Farrer Road at a whopping 840,000 sqft. Absolutely massive. That is the equivalent of 840 4-room HDB flats combined.
• Site Coverage: The maximum coverage has recently been revised in 2019 from 40-50% but now includes more areas in their calculation.
• This now includes all building structures that protrude more than 1m from the ground as seen from the top-down ‘Site Plan’ view. This means that at least 50% of the land area must be dedicated to greenery and landscaping.
• Maximising the site coverage will help to maximise the developer’s profits whilst a lower site coverage means more exclusivity, usually at a higher price.
• Some standout projects which intentionally promote exclusivity are Goodwood Residence along Bukit Timah Road (80/20 ratio) and Principal Garden along Prince Charles Crescent (80/20 ratio). This can be an important consideration when evaluating the development’s en-bloc potential.

• Facilities: Whilist I am unable to find an exact URA link to define this, condominiums are required to have a certain number of communal facilities such as security posts, lap pools, BBQ pits, function rooms and tennis courts.
• Of course, the list goes on and not having some will not preclude these developments from having condo status.
• The new launch trend these days seems to do away / significantly reduce yesteryear norms such as tennis courts. For example, Avenue South Residence at Silat Avenue, with 1,074 units only has 1 tennis court, as does Parc Esta along Sims Avenue with 1,399 units. Just compare this with Maple Woods at 993 Bukit Timah Road, built in 1997 with 4 tennis courts for 697 units or The Sovereign at 99 Meyer Road with 2 courts for 87 units.
• Some facilities have disappeared altogether, such as squash courts and golf bag lockers as demand for these sports waned over the years.
• Some interesting condo facilities include a bowling alley at City Square Residences at Farrer Park and a velodrome for track racing at Westwood Residences EC near Jalan Bahar.

• Set Back from Boundary: This is admittedly one of the lesser known requirements of what is required of a condominium. Essentially, there is a minimum buffer required between the housing block and the road itself.
• How much buffer is required will be determined by a) type of road and b) height of development. More details can be found on URA’s link.
• What is interesting is that some projects which have met all of the other requirements to be classified as a condominium did not end up qualifying as one due to this boundary requirement.
• A new launch example would be Parc Esta along Sims Avenue, which despite some 70 facilities onsite, including a tennis court, multiple swimming pools and communal gathering spots, is classified as an apartment because of its inability to comply with the set back requirement.

2. Apartment

• Now, having explained the requirements of what makes a condominium in quite extensive terms, an apartment is basically everything that a condo is not.
• Some usual stereotypes about apartments are that they are usually:
  • Low-Rise (<5 storeys)
  • Squeezy between blocks
  • Lack facilities found in condos
• I agree that these points are more or less justified, especially those within private landed enclaves such as Telok Kurau and Bukit Timah. Many of these apartments have <30 units in the entire development and was built after the developer had bought over a single large bungalow.
• Some examples of old bungalows being torn down and rebuilt include Dunman Regency along Dunman Road and Straits Mansion at Sea Avenue.

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• However, there are also exceptions to these stereotypes. Look at Parc Esta – would you really consider it an apartment? It probably has way better facilities than many older condo developments and simply didn’t qualify as a condo because of a technicality.
• Additionally, some apartments are what I would term as “boutique condos” because they are small (below 300 units) but have sufficient facilities which will make living there no different from a condo.
• Some examples would be L’Viv at Newton Road and Espada at St Thomas Walk. Both are high rise developments with small land areas but packed with facilities – tennis court, decent sized pools, BBQ pits and most importantly, sky decks / gardens, which I absolutely adore. Sky gardens allow residents with units on lower floors to enjoy the same high-rise living at a fraction of the price.

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So… back to the main question – do their classification / status matter and why?

• There is no clear cut answer on this. It really depends on what kind of apartment you are considering and for what purpose. I am looking at this purely on a return on investment perspective.
• Apartments are in general, expected to cost less than condos simply because they lack the facilities and land area. However, the exceptions are those are ‘pseudo-apartments’ such as Orchard Residences and Parc Esta mentioned above.
• These aforementioned developments have the makings of a condo and should not be seen as apartments in the first place, despite their legal classification. In these cases, their status should not matter because they offer the same quality of life when compared to condos.
• However, on the flip side, when we consider “proper” apartments such as those being rebuilt from single bungalow units into 20 unit apartments, I am of the view that they will offer limited upside in the longer term.
• This is because of 2 reasons:
  • (i) Desirability – HDB upgraders / landed downgraders are looking for a product which can better their existing dwelling. Why sell your HDB to move into a smaller apartment unit which doesn’t even have a decent sized lap pool to begin with? You pay higher property taxes with no facilities to shout about.
  • (ii) En Bloc Potential – If your apartment has been rebuilt from 1 bungalow into 16 apartment units, chances are the plot ratio has been maximised. This means that when your development gets old, it would appear less attractive to developers looking to acquire land as the site has been “fully built up”. Straits Mansion at Sea Ave has 25 units for 18,000 sqft of land, rebuilt from a dilapidated bungalow. Compare to this to full fledged condos such as Gallop Gables at Farrer Road which has only 140 units for more than 240,000 sqft of land. As an astute developer, and assuming budget is of no issue, which would you be more inclined to pick?
• Look, I am not saying avoid apartments at all costs. They have their purpose in the property market – catering to those who are looking for a private home with little frills and possibly lower maintenance (which may be a myth btw) because of the fewer facilities.
• Personally, however, if I were to purchase an apartment, I would try to look for developments which are more ‘pseudo-condo’ like or an integrated development (which is very popular and most have made money) rather than an apartment in its truest sense as I feel that it is ‘sandwich’ class that will at least allow me to hedge my ‘property bet’.
• It is fair to say that condos in general have better appreciation over the years compared to apartments so that 20% price difference initially may seem steep initially, but may pay off in the longer term.
• Properties in Singapore take a lifetime to repay – hence it is important to know what you are buying into and why.

*Disclaimer* All photos are not my own and have been taken off the internet. This post represents my views as an individual and is not representative of my company or any organisation I am affiliated to.