When it comes to buying their first home in Singapore, the majority of Singaporeans tend to opt for HDB flats. Singaporeans have two main options when it comes to purchasing an HDB flat. They can apply for a new Build-To-Order (BTO) flat, or buy a resale HDB flat from the open market1.
A Build-to-Order (BTO) flat is a newly-built HDB flat launched prior to its construction. These houses have a fresh lease of 99 years. This public housing scheme was introduced in 2001 to offer potential homebuyers more flexibility in choosing the location of their new homes.
On the other hand, a resale HDB refers to an HDB flat sold by an existing owner, after it has reached its Minimum Occupation Period (MOP), in the open market. Resale flats have shorter lease tenures than BTOs and usually command higher prices that rise and fall according to demand and supply.
There are several factors to consider when deciding between a BTO or resale flat, including eligibility criteria, price, location, lease tenure, waiting period, renovation cost, size & layout of the home, future market value, and grants.
Eligibility Criteria – Resale
If you are not eligible to apply for a BTO flat in the first place, the question of which type of flat you should choose wouldn’t even matter. Hence, the first thing you should check is whether you are eligible to apply for a BTO flat. Here are some of the key criteria that you should know about. Citizenship: At least one person applying for the BTO flat needs to be a Singapore Citizen and at least one other person applying (if applicable) needs to be a Singapore Citizen or Permanent Resident. Income Ceiling: The current income ceiling for a BTO flat is $14,000 per month. If you and your spouse earn more than this, you do not qualify for a BTO flat and will need to buy a resale flat.
Price – BTO
It’s widely known that BTO flats are cheaper compared to resale flats in the same estate.
Location – Resale
BTO flats are usually located in non-mature estates, while resale flats can be found in both mature and non-mature estates. This means that if you want to live in a mature estate with more amenities and better transport connectivity, you may have to opt for a resale flat.
Lease Tenure – BTO
BTO flats have a fresh lease of 99 years, while resale flats have shorter lease tenures.
Waiting Period – Resale
BTO flats usually take around 3-5 years to be completed, while resale flats are available for immediate occupation. However, due to the pandemic, the waiting time for BTO flats has been much longer due to the shortage of workers and construction delays.
Renovation Cost – Resale
BTO flats usually require more extensive renovation as they come unfurnished, while resale flats may already have some furnishings and fittings. However, this also means that you have more flexibility in customizing your BTO flat according to your preferences.
Size & Layout of Home – Resale
BTO flats usually have a standard layout, while resale flats may have more variation in their layout and size.
Future Market Value – Tie
The future market value of your flat will depend on various factors such as location, remaining lease tenure, and market demand and supply. It is difficult to predict which type of flat will have a higher future market value.
Grants – Tie
There are various grants available for both BTO and resale flats, such as the Enhanced CPF Housing Grant (EHG) and Proximity Housing Grant (PHG). You can check your eligibility for these grants on the HDB website
Summary
Deciding between an HDB BTO or HDB Resale for your first property in Singapore depends on various factors such as eligibility criteria, price, location, lease tenure, waiting period, renovation cost, size & layout of the home, future market value, and grants. Both options have their pros and cons, and it ultimately depends on your personal preferences and priorities. It is important to carefully consider all these factors before making a decision. We hope this article has provided you with useful information to help you make an informed decision. As usual, if you need any professional advice or recommendation on your next property, please do not hesitate to contact me at +6597719040.
