Are you eligible for a Resale/BTO flat?
The main requirement is that if you are buying as a couple, at least one of you must be a Singapore Citizen. For singles, you must be a Singapore Citizen.
For Married Couples: Eligibility
For Singles: Eligibility
You are entitled to more CPF Housing Grants when buying a resale HDB flat instead of a BTO.
For married couples, the maximum grant amount you can get for a resale HDB flat is $160,000, compared to $80,000 for a BTO.
For Couples: Grants
For Singles: Grants
Price
BTO flats are generally cheaper compared to resale flats in the same estate. For instance, in the recent November 2018 BTO launch, a 5-room flat in Tampines is sold at a median of $472,000 compared to a resale flat with a median of $662,500.
BTO flats do consider different locations and attributes when coming up with the sale prices. However, you should not expect all 5-room BTO flats in Tampines to be of the same price since the exact location will be different alongside the attributes.
source: iProperty.com
Location
When considering a BTO, the locations are dictated by HDB and your selection might not be of your ideal choice. If you happen to find a BTO launch at your preferred location, be prepared for the launch to be oversubscribed as such areas are considered “hot-spots”.
Compared to resale flats, you can get good locations at your choice provided there is a homeowner selling their HDB flat. These include the mature estates such as, Marine Parade, Bukit Merah and Queenstown. But of course, be prepared to pay a lot more as these areas are in high demand.
Lease Tenure
Whilst looking for a resale flat, you also must keep in mind that the remaining lease of older flats in good locations could be less than 60 years.
On the contrary, BTO flats have a fresh 99-years lease which likely means that your children can continue staying in the flat for the rest of their lifetime, compared to older flats with shorter lease.
The main question you need to ask yourself is if you are willing to pay a higher price for a shorter remaining lease where you could get a fresh 99 years lease from a BTO flat at a lower price.
Waiting time
Between resale and BTO flats, there is definitely a huge difference. Given that the resale flat has reached its Minimum Occupation Period of 5 years, the hand over time between seller and buyer is generally 2 months. Compared to the latter, it usually takes around 3-5 years for the new flats to be built.
However, to reduce the waiting time for BTO flat to be built, you can consider applying through Re-offer of Balance flat (ROF) or Sales of Balance flat (SBF) exercise. Units that are available during the ROF and SBF exercise are BTO flats that have been offered but are available again for selection because;
1) the buyers who selected the flat have chosen to give it up,
2) these flats were never selected by anyone during the previous BTO exercise.
Renovation Cost
Renovation works on BTO flats tend to be cheaper compared to an older resale flats due to the extensive hacking and rebuilding of existing features that the new homeowners might not want. According to an online renovation cost guide, an average spending for a new 5-room BTO flat is $40,000 compared to a 5-room resale flat for $68,000.
The renovation cost will vary from individual, if you are looking at resale, you might find a well-furnished home to your liking and the cost would be much lower compared to a new BTO flat which is unfurnished.
Future Market Value
BTO flats tend to fetch a higher resale value after its Minimum Occupation Period of 5 years compared to a pre-existing resale flat. To simply put things across, it is newer. For instance, a BTO flat in a mature estate, once it reached its MOP and is available in the resale market, it will be in comparison with other resale flats which might be 10 to 20 years older. Giving the BTO flat an edge in the market, as it is newer with longer lease.
In addition, BTO flats are subsidised by the Government, as such, it’s pricing would be much lower compared to a resale flat which are not subsidised.
Eligibility Schemes to Purchase an HDB flat
In order to purchase a HDB flat, you MUST fall into 1 of the categories listed below:
Summary
The choice is up to you, it depends on what you are looking for. Are you in need of a HDB flat, or do you have the time to wait for a BTO flat? Both have advantages and disadvantages, you got to weigh them for yourself and take a pick.
