HDBs make great first homes thanks to their affordable price tags and the fact that you can shave thousands of dollars off your purchase price with all the government grants in place. Then comes the age-old question: BTO or resale?
By now, you’ve probably read debates exploding across online forums or discussed the topic among your circle of friends. But given the amount of conflicting standpoints, narrowing down your choice isn’t as simple as one might think. If you’re overwhelmed by all the information, ask yourself these seven simple questions to help you land on the right choice.
1. Are you eligible?
Before moving on to the nitty-gritty questions, here’s a quick checklist to help you identify your eligibility for either a BTO or resale flat:
The Singapore passport comes with a long list of perks, and having your pick of public housing is one of them. If you’re a Singapore citizen, you’re automatically eligible for both a BTO or resale flat.
You’ll be able to apply for a BTO flat with anyone who is a fellow citizen or Permanent Resident (PR).
Foreigners, on the other hand, will require the golden ticket of permanent residency to qualify for the purchase of a BTO flat. Otherwise, a resale flat will be the only choice.
While some of us would jump at the chance to move out of our family homes, the minimum applicant age for both BTO and resale flats is 21.
C. Income ceiling
BTOs and Sale of Balance Flats (SBF) are subsidised housing options that come with an income ceiling of $14,000. This means that the combined household income of all applicants shouldn’t exceed the stipulated amount.
Resale flats on the other hand, do not come with any income ceiling so if you and your future home-buddy have been working sometime and have “bust” the income ceiling, resale flats are a viable alternative.
OVERALL WIN: Resale – thanks to the fewer restrictions on purchase eligibility.
2. Who can you apply with?
A party of two or more spices up pretty much everything – even your home. Depending on which stage of life you’re at presently or who you’ll be sharing your little space with, either BTO or resale can be your winning choice.
A. Fiancé/ Fiancée Scheme
Just before tying the knot, scouting for a good home could be your priority. It’s possible under the Fiancé scheme, as long as you have officially registered your marriage.
Simply submit a photocopy of your marriage cert to your HDB branch:
- within 3 months of BTO key collection
- within 3 months of resale completion date
You might want to add an extra three to five years to your timeline for your BTO flat to be completed.
B. Public Scheme
Although not to the extent of your parents’ kampung days, living under one roof with your family is still quite possible. With the Public Scheme, you can apply for either a BTO or resale flat with any one of the following:
- Spouse and children
- Parents and siblings
- Children under your legal custody, care and control
While this scheme has its pros because many groups fit under the umbrella with little restrictions, you have to be dead certain about who you’ll be staying with. Why? If you fall out with your housemate sometime down the road, you won’t be able to throw out old names or include new ones to the list that easily.
C. Non-Citizen Spouse Scheme
As the name suggests, the Non-Citizen Spouse Scheme is especially useful for Singapore citizens hunting for homes with partners who aren’t Singaporean citizens or PRs. Your partner will need to hold a valid Work Pass and still be gainfully employed at the time of application.
OVERALL WIN: Resale
3. What kind of grants can you enjoy?
To help you afford your very first home, there are a slew of CPF housing grants available. The amount you get depends on factors such as the household’s combined income, who you’re intending to live with and the location you’re hoping to live in.
Here’s a quick run-down of grants you can deduct from your hefty bill for both BTO and resale first-timers:
A. Enhanced Housing Grant (up to $80,000)
Whether you’re fresh-out-of-school or new to the workforce, you might be just beginning to accumulate those dollars in the bank. As long as you and your house-partner earn a joint monthly income of less than $9,000, you are eligible to receive varied grant amounts.
These are the grant amounts you can receive according to your income:
Image adapted from: HDB
Families with a lower income threshold will receive larger grant amounts. And here comes the best part: you can easily claim the Enhanced Housing Grant regardless of whether you’re leaning towards BTO or resale flats.
B. Family Grant (up to $50,000)
Living with your family has its perks, and in this case it’s a deductible sum of up to $50,000 from the cost price of your flat. The family grant is a sizable chunk of funds saved, but the caveat is that it’s a resale flat exclusive benefit.
For those who are leaning towards resale HDBs, here’s some bite-sized info on grant amounts you can receive:
Image adapted from: HDB
Being eligible for the full family grant might be akin to hitting the jackpot if that 5-room flat you’re eyeing is over-valuation, but you’ve got to make sure your total monthly income stays under $21,000. And if you’re gunning for a 2-room to 4-room resale flat, your income ceiling comes in at $14,000.
C. Proximity Housing Grant (up to $30,000)
Leaving the cosy comfort of your parents’ home can cause major heartache – especially when you have to settle for an ulu area that’s less costly. Good news, you can save on money – and tears – by applying for the Proximity Housing Grant.
This grant can slash up to $30,000 from your home loan if you’re intending to live with your parents in your new home, and up to $20,000 if you’re looking to purchase a nearby resale flat under 4KM away from your parents’ home. And unlike the previous two schemes, you don’t have to qualify under a fixed income ceiling.
You can double-check by using HDB’s handy distance enquiry tool here.
OVERALL WIN: Resale – two out of three grants are resale-flat only exclusives.
4. Are you going to sell your home in a few years?
House flipping: a term that means buying a home at a low price and quickly reselling it for profit, is quickly becoming a new trend among BTO buyers. While there aren’t any rules to make this illegal, just make sure that you’ve fulfilled the Minimum Occupancy Period (MOP) of five years before flippin’.
A BTO flat’s fresh 99-year leasehold status also gets rid of ‘lease decay’ – which includes lower property value from the advanced age of a flat. For example, the 2008 Punggol Sapphire BTO creeped up from an average of $362,500 to $495,765 post-MOP. Just the thing to look out for if you’re into property investment.
But if you’re just looking for a humble abode to stay in, opting for a resale flat isn’t the worst. Although it’s likely to have a lower price tag five years down the line from older age, this shouldn’t be a problem if you’ve decided to stay till retirement.
On that note, choosing to sell your resale is not all bad. Some buyers love the bigger floor spaces, balconies and squarish layouts that come with older HDBs. It might even win you some wiggle room to earn an extra buck or two from your flat successor.
OVERALL WIN: BTO – Assuming most of us first-timers would want to move out at least once, BTOs take home the trophy in terms of extra cash.
5. How much would you need to spend on renovation?
Contrary to what you’re used to hearing, renovating from scratch does not necessarily equate to higher costs. We’ve crunched the numbers for you to get a rough estimate on what you’ll be needing for your home makeover:
The higher numbers for resale flats can be surprising, but think of it this way. Since BTOs are literally blank canvases, much of its interior is bare. This means that you have free reign over whether you want to add built-in carpentry, do up your tiles and add a false ceiling.
Resale flats, on the other hand, can be more cost-intensive especially for flats that require hacking of existing carpentry and tiles before your contractors are able to give your flat a facelift. Some of these factors may stretch your bill, including hacking old flooring, plumbing or rewiring odds and ends. Some quick figures to put those costs in perspective:
Source: Qanvast Cost Guide
Other factors involved in your renovation:
A. Family size
The larger your tribe, the more you can expect to spend on reno for your new home – with some price variations. Assuming you’re applying for a 5-room flat, renovations would cost you about $45,000 – $52,000 for BTO and $59,000 – $79,000 for resale.
B. Home concept
While ogling at those cool home magazine centrespreads, upping the aesthetics in your home becomes a burning want. Whether you’re gunning for a rugged industrial pad for two or a minimal Scandinavian home that will accommodate your soon-to-be-expanding family, your chosen interior type dictates your overall reno bill.
For example, rolling out marble flooring comes with a higher price tag of $15 – $48 per square foot whilst laminate flooring is about $4.50 – 7.50 per square foot.
OVERALL WIN: BTO – Especially for first-time buyers, spending less on renovation can be a favourable launchpad in terms of budget.
6. How important are amenities and location to you?
Many of us keep our eyes peeled for new BTO launches with our significant other. BTO launch sites generally come with their own cluster of amenities, from nearby MRTs to ever-needed NTUCs.
But with that being said, BTOs are usually built in non-mature estates that are still undergoing a degree of development compared to their mature counterparts. You probably might not find a shopping centre or a KOI outlet within walking distance.
However, this condition doesn’t ring true across all BTO projects. The newest launch series in Bukit Batok, Kallang, Tengah and Toa Payoh (Bidadari) in Feb 2021 guarantees prime access to a range of megamalls for shopaholics and nearby schools for your kids.
Resale flats, on the other hand, grant almost full leeway for your choice of residence as long as you find a willing seller. They are also sprawling with MRT stations for super-easy commuting. Especially if you want a well-connected home smack in the middle of all the action, choosing resale could be most ideal.
OVERALL WIN: Resale – These have lesser restrictions in terms of location and amenities. If you are flexible with locations, though, waiting a few extra months to score the BTO neighbourhood of your choice may not be overly daunting.
7. Can you afford to wait?
If you have sunk your feet into the BTO balloting process, you’d be familiar with lengthy procedures like eligibility checks, automated shortlisting, booking a flat and so forth. Because everyone’s competing for the ‘best’ unit, the balloting process can be quite hit-or-miss.
Waiting times are also extended by about three to five years for your building’s construction, depending on its level of completion.
However, this might actually be good buffer time to iron out finer details concerning your future abode – when you’re still pulling through uni with your significant other or don’t mind staying with your in-laws temporarily.
You can even crunch this buffer period down further by applying for balance flats under the Sale of Balance Flats (SBF) exercise – which are ‘leftover’ flats that usually take a shorter time to obtain as they are close to completion. For those married with children, you can even sneak your way into the Priority Waitlist as HDB makes sure you get your home first.
But if any intermission period is a big no-no, resale might still be your best bet. There are virtually zero waiting times as long as you’ve sealed the deal with your home-seller and mutually agree on a date for your grand move-in. Whether you’re married with children and need a bigger play-area immediately, or a newlywed couple who desires well-deserved privacy, opting for a resale flat could be most convenient.
OVERALL WIN: Resale – Ensures that you can move in immediately once you’ve purchased your flat.
Choosing Between BTO VS Resale Flats
We hope this checklist helped to quell that endless debate in your head a little.
In summary, resale flats seem to be a better bet if you’d like to move in sooner, are pickier with your choice of neighbourhoods, or are simply not eligible for BTOs.
BTOs, on the other hand, reign in terms of affordability and possible capital appreciation. Plus, possible lower renovation costs.
Whether you’re hopping onto a new BTO chapter with your longtime beau or scouring a resale home, choosing the perfect home boils down to your desired preference. Happy house hunting!
Cover image adapted from: MyNiceHome