With this pandemic lasting far longer than expected, we’ve all been hit hard with BTO delays and cooped-up WFH situations. It’s a tiresome ordeal, especially for young couples out there looking to start their own lives. While “BTO ai mai” might’ve been the standard proposal line back in pre-Covid days, the delay of BTO projects are now causing many to reconsider.
In order to fly the nest sooner than later, we’re looking at affordable alternatives – so we can get our own space. But in our quest for independence, we want to know which is most worth it: renting while waiting for their BTO flats or paying a markup to immediately own a resale flat.
Scroll all the way through if you’re looking for an easy takeaway on whether rent or resale suits you best!
Option A: Rent while waiting for your BTO
The common sentiment is that renting is a waste of money, but that’s not always the case. It’s a tempting option for many while waiting for their BTO flats, as a fix where you can score both privacy and flexibility. After all, it’ll be your very own pad so no need to worry about cramped living spaces or moving in with your in-laws.
Make sure to discuss all rental issues thoroughly with your property agent before committing.
Image credit: TheSmartLocal
But the rental market doesn’t come cheap in Singapore. Be prepared to fork out a substantial amount of your pay every month, and remember to also factor in upfront costs like a downpayment and security deposits.
On the bright side, you might still be saving in the long run. If your monthly household income is below $9,000 before applying for the BTO flat, you’ll also be able to claim the Enhanced CPF Housing Grant – which could potentially save you up to $80,000.
Option B: Get a resale flat immediately
Another option is to purchase a resale flat – unless heavy renovation work is needed, you’ll be moving into your new abode in no time. Despite a shorter lease term, many still favour resale flats for their typically more convenient locations and larger floorplans.
Image credit: TheSmartLocal
You can also apply for several housing subsidies when it comes to resale flats, such as the Enhanced CPF Housing Grant (up to $80,000), CPF Housing Grant (up to $50,000) and the Proximity Housing Grant (up to $30,000). In total, that’s a hefty $160,000 you could be saving.
Of course, this all depends on your household income and financial situation so it’s worth reading up on CPF housing grants for resale flats.
Should I rent while waiting for our BTO or buy a resale flat?
So for folks looking to move out ASAP, the question boils down to this: should we rent while waiting for our BTO or buy a resale flat? The average waiting time for a BTO is three to four years, but with delays due to Covid, it might very well add on another year or two.
For comparison, let’s look at renting for four years as opposed to buying a resale flat now – we’ll be looking at 4-room flats solely as these are often touted for their balance between desirable layouts and fair pricing. We’ll also be factoring in the maximum grant amounts you can get in both scenarios so you can easily tell which is the more affordable option.
Additionally, these rental rates are based on the assumption that you’ll want to rent somewhere near your future BTO flat – just for convenience’s sake. Here are three key BTO projects launched in August 2021 compared to resale flats within similar vicinities:
BTO #1: Toh Guan Grove, Jurong East
No doubt that Toh Guan Grove will be a top pick, since the last BTO project launched in Jurong East was roughly 10 years ago. It’s known as the CBD of the West and isn’t a mature estate but has a number of shopping malls and schools.
Image adapted from: Google Maps
The BTO prices for a 4-room flat range between $347,000 to $436,000, depending on the floor level and orientation. There’ll be 569 units in total, including 2-room, 3-room and 4-room flats.
Renting in Jurong East while waiting for BTO
Rental prices for the surrounding Jurong East area range between $1,650 to $2,700 for a 4-room flat.Thanks to our trusty SRX having a year’s worth of data on the Toh Guan HDB estate, we’ve figured this out:
Average price for 4-room BTO flat: $391,500
Average rental price: $2,196/monthly, which works out to $105,408 over four years
Total price factoring in max. grants: $415,000 – remember that this figure doesn’t include renovation fees or any other hidden costs.
Buying a resale flat in Jurong East to immediately move in
When it comes to purchasing a 4-room resale flat, you can expect prices between $385,000 to $580,000 – most of the HDBs in the Toh Guan area were built in 1998 or 1999, so it all depends on the flat’s condition.
Image credit: TheSmartLocal
Once again, you’ll have a bunch of grants to claim. The maximum amount you can save when it comes to resale flats is $160,000. With the average resale price of a 4-room as $493,000, your resale flat is bound to cost you somewhere around $333,000. It’s a rare situation that households can claim the maximum amount of grants, so make sure to check out what you’re qualified for.
This sum doesn’t include reno costs either, but typically, it’s more costly to renovate an older flat since you’ll probably want to uphaul a ton of fixtures if it hasn’t been updated since 1998.
Average price for 4-room resale flat: $493,000
Total estimated price factoring in max. grants: $333,000
*All property sale and rental data for the Toh Guan Road HDB area is taken from SRX, dating back to October 2020.
BTO #2: Towner Residences, Kallang-Whampoa
Another popular BTO choice: Towner Residences at the Kallang-Whampoa area. This will be a coveted spot mostly for its location – it’s an easy 15-minute drive into the CBD and is within walking distance to Boon Keng MRT. As the smallest development in this August 2021 BTO launch, it has just 316 units. Prices range between $50,000 to $656,000 for a 4-room flat.
A 10-minute walk to Boon Keng MRT.
Image adapted from: Google Maps
We’ll be comparing this project to the nearest HDB estate: McNair Road estate.
Renting in Kallang-Whampoa while waiting for BTO
To rent in the McNair Road area, you can expect monthly rates between $1,900 to $3,600 for a 4-room flat. There’s good reason behind the huge discrepancy in rental rates – some of the flats in the area date back to 1987 while others were built as early as 2017.
Average price for 4-room BTO flat: $578,000
Average rental price: $2,477/monthly, which works out to $118,896 over four years
Total price factoring in max. grants: $616,000 – not one of the more affordable BTO flats by any means, but you’re certainly paying for convenience and location.
A short jog to scenic spots like Kallang’s Kolam Ayer Waterfront.
Image credit: TheSmartLocal
Buying a resale flat in Kallang-Whampoa to immediately move in
The price of resale flats in the Kallang-Whampoa estate will raise an eyebrow – it ranges from $455,000 to $865,000. But similar to the wide sprawl of rental rates, it’s simply because some flats are much more modern compared to those from the 80s. In any case, the average figure comes in at $562,000 which sits nicely in the middle of the resale market.
Average price for 4-room resale flat: $562,000
Total estimated price factoring in max. grants: $402,000
*All property sale and rental data for the McNair Road HDB area is taken from SRX, dating back to October 2020.
BTO #3: Queen’s Arc, Queenstown
Queenstown hasn’t had a BTO launch since 2012 and many will be clambering over this newly-launched Queen’s Arc. While the site isn’t exactly close to the MRT, with Queenstown MRT further than a 10-minute walk, this mature estate still has IKEA and foodie-raved hawker centres nearby.
Queen’s Arc is near many food and shopping joints.
Image adapted from: Google Maps
There’ll be 610 units, made up from a mix of 3-room and 4-room flats – the latter’s price range lies between $540,000 – $670,000.
Renting in Queenstown while waiting for BTO
To rent near Queen’s Arc, more specifically, the Stirling Road HDB estate, rental rates range between $1,500 to $3,100. While there are several HDB estates nearby, there are only a handful of developments featuring a 4-room flat model. These date between the years 1968 to 2000, so you can expect rental rates to be reflective of the flat’s age and condition.
Average price for 4-room BTO flat: $605,000
Average rental price: $2,489/monthly, which works out to $119,472 over four years
Total price factoring in max. grants: $644,000 – so far, this is the most expensive BTO project of those we’re looking at, but take into account that Queenstown is one of the more highly-sought after estates.
Image credit: TheSmartLocal
Buying a resale flat in Queenstown to immediately move in
Unfortunately, resale prices in Queenstown are a little all over the place. But that’s because it’s also an estate with HDB terrace houses in the mix. We ran the numbers from SRX anyway, just to get a gauge of things, and you can expect resale prices to range from $698,000 to $975,000.
Don’t be too shocked by the last figure – after all, this is the exact same area where a terrace HDB listed for $1,000,000.
After taking off up to $160K in grants, you can assume a 4-room resale flat in this area will set you back around $691K or so.
Average price for 4-room resale flat: $851,000
Total estimated price factoring in max. grants: $691,000 – just keep in mind that in some cases, you’re comparing entirely different layouts – a 4-room terrace is drastically different to a 4-room flat.
*All property sale and rental data for the Stirling Road HDB area is taken from SRX, dating back to October 2020.
Which is most worth it?
In order to figure out whether rent or resale is more worth it, we’ve done up a loose representation of pricing so you can form your own conclusions.
The estimated cost of renting for four years while waiting for your BTO flat.
You can see that the estimated cost for a BTO flat + four years rental range from approximately $415,000 to $644,000.
The estimated cost of purchasing a resale flat.
In comparison, a resale flat starts from $333,000.
Based on the numbers, it appears that most resale flats are slightly cheaper than the combo of renting + BTO. Of course, this doesn’t apply to the more “unique” estates – so in the case of Queenstown, they boast housing layouts that are no longer offered by HDB. Other estates like Tiong Bahru and Whampoa are also coveted for their terraces or quaint walk-up apartments.
You can find these pre-war spiral staircases in Tiong Bahru and other photogenic HDB estates.
Image credit: TheSmartLocal
Remember that our estimated costs didn’t include renovation charges either since this all depends on the state of your unit and what you have in mind. This could be done cheaply on a $30,000 renovation budget or possibly soar up to a triple-digit sum.
You’ll also need to consider which CPF housing grants are applicable for your situation. Yep, you can supposedly claim up to $160,000 when it comes to buying a resale flat, but very few folks will be able to garner the absolute amount in subsidies.
Another massive thing you’ll want to consider is the lease term – many of these resale flats were built decades ago whereas you’re starting brand new with a BTO flat. Besides affecting the property’s value in the long-term, be prepared to pay more for maintenance when it comes to overlooked fixtures, plumbing or even rotting ceiling and floorboards.
Choosing between a BTO or resale flat in Singapore
Image credit: TheSmartLocal
Our take on things? It depends on what you’re looking for. Ultimately, it’s not an easy task to figure out what fits your lifestyle best. As a rule of thumb: apply for a BTO if you’re willing to wait it out in a temporary house or go for a resale flat if you’re wanting to start your life in your forever home.
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