In 2009, resale ECs were on average 12.6 per cent cheaper on a per sq ft basis than comparable mass-market homes. But that difference has narrowed, coming down to 6.3 per cent in 2013 and 5.8 per cent last year, a study by SRX Property found.
SRX compared 13 ECs in areas such as Tampines, Jurong East and Woodlands with condos nearby that had similar leasehold and surrounding facilities.
Experts say the price gap is narrowing as ECs may offer larger unit sizes than their private counterparts, while also featuring similar physical attributes in terms of location, design and facilities.
EC units on the resale market had an average size of 1,267 to 1,350 sq ft from 2009 to last year, with an average price of about $1 million last year, said Mr Alan Cheong, Savills Singapore research head.
In comparison, suburban resale private condos were slightly smaller, with an average size of 1,227 to 1,328 sq ft over the same period, but they had a higher average price of $1.2 million last year.
"The size and price point for resale ECs may be meeting the needs of many, whose family size has grown and who wish to upgrade from a smaller Housing Board flat. It also appears that an average EC unit sold is larger than a private non-landed property," said Mr Cheong.
"Coupled with the lower price on a dollar foot basis, it does make financial sense for some to purchase ECs in the resale market since they are getting a larger unit while paying a much lower absolute dollar amount."
The price gap between new ECs and new mass-market condos used to be 20 per cent to 25 per cent, although this increased to about 30 per cent from 2013.
Once their five-year minimum occupation period (MOP) ends, resale ECs typically start selling at a slight discount to their mass-market counterparts as they can be sold only to Singaporeans and permanent residents, added Mr Nicholas Mak, SLP International executive director.
"But the price gap narrows over time as they can be comparable even in location. For example, there is sometimes a mix of ECs and private condos within a certain radius from an MRT station."
SRX Property also looked at seven districts with ECs which were at least six years old. It found that the price gap shrank markedly last year for District 20, which includes Ang Mo Kio and Bishan, and District 27, where Sembawang, Yishun and Admiralty are located.
The difference fell from 9.1 per cent in 2013 to 3 per cent last year for District 20.
For District 27, the only EC with resale transactions last year - The Lilydale - even trumped five comparable mass-market condos, registering a 1.2 per cent price premium last year, up from a 5.7 per cent price discount in 2013.
The gap was largest for District 22, which includes Boon Lay, Jurong and Tuas, and District 19, which has Punggol and Sengkang.
It fell slightly for District 22 from 23.3 per cent in 2013 to 22.1 per cent last year, but rose for District 19 from 12.8 per cent to 14.7 per cent.
Mr Mak noted that District 20 is a mature estate where condo prices are relatively high, so EC resale prices would increase as well. Furthermore, there is just one EC each in Bishan and Ang Mo Kio which has crossed the five-year MOP.
On the other hand, District 22 and 19 are larger in area and each has three ECs that meet the MOP. Both also have a growing number of mass-market leasehold condos.
As capital values for resale ECs have risen at a faster rate than those of suburban resale private condos over the past five years, capital gains have also been stronger, added Mr Cheong.
Non-landed private properties in the resale market had an average capital gain of 15 per cent from 2009 to last year, while ECs easily trumped that with gains of 56 per cent.
The demand for resale ECs is expected to stay strong if the total debt servicing ratio and cooling measures remain in their current state.
"The price gap between resale ECs and mass-market condos should continue to narrow as there are those who see value for money in buying a resale EC for their own stay, or perhaps even leasing it out," said Mr Cheong.
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