You have found someone to BTO with, but found it difficult to secure your dream home? You are definitely not alone. You may start to think about choosing a resale flat instead.
Common unspoken dilemmas: BTO applications sometimes take way too long.
In some situations, applying for BTO with your partner may not be the most efficient.
After all, in order to successfully BTO, the entire process takes time, a lot of research and one element that is out of your control: luck. BTO refers to the built-to-order flats which the government launches every few months for Singaporeans to purchase. There is also a list of eligibility criteria to fulfill in order to buy BTO flats. But it is often preferred because it is relatively cheaper, and buyers believe they make a good investment option.
However, BTO flats are often oversubscribed, especially the ones located in popular estates such as Kallang, Bidadari and Clementi. There are many cases in which couples make more than 3 BTO attempts and still are not able to obtain a BTO unit. On top of this difficulty, couples would also need to wait about 3-4 years before they can move in because the BTO flats need time to complete construction and renovation.
We have met many of our friends and clients who are in this unfavourable situation. Due to their personal timelines and reasons, they may not be able to wait or attempt for BTO flats repeatedly. Staying with their parents or in-laws could be an option, but not always. If that is the case, we would recommend that you start your first home with a resale flat. What are the pros and cons of getting a resale flat? Let’s break it down for you:
Choosing Your Preferred Location – something you would do even when you are choosing your BTO with your partner.
The number one advantage of getting a resale flat is to pick your preferred location. Getting a unit in a convenient location would help you cut down on hours on your daily commute to work or to town. It is also a timeless advantage when it comes to selling your unit in future.
After narrowing down the estates that you and your partner like, you can start looking for specific units for house-viewing. For couples who want to stay close to their parents, you do not have to wait for a BTO launch to occur in your neighbourhood. Furthermore, the government is no longer rolling out BTO launches in mature estates.
Buying a resale flat will give you greater control over which unit you would stay in eventually.
Check out the transportation network, the traffic noise in an existing thriving neighbourhood.
Greater Control Over Your Preferred Unit
Resale flats provide you an accurate sensing of what living in the unit would actually be like. You could visit the place and do a complete house viewing, know the neighbours, take note of traffic noise, transportation options, and surrounding facilities. There is also 100% certainty in the layout and space allocation for renovation and living space.
As compared, for BTO flats, you will neither know who your neighbours will be, nor will you know the final look of your flat. These are key considerations of living in a home which you will rely on your luck for. Facilities and traffic conditions may change over the course of the construction of the BTO flats as well, during which you would not be able to predict completely.
For resale flats, quick transactions can allow you to move in within 2 months but for BTO flats, you would have to wait for about 3 – 4 years. If you prefer to have control over your home purchase, resale flats would be a better choice for you.
Flat Features & Flat Size
Resale flats tend to be bigger than the newer BTO flats when we are doing a point-to-point comparison.
For example, a 18-years old 5-room resale flat in Blk 596D Ang Mo Kio St 52 S(564596) of 110sqf, as compared to a 41-years old 5-room BTO flat in Blk 430 Ang Mo Kio Ave 3 S(560430) just a street away that is 119 sqf. Size is a necessary concern for couples who intend to raise children in a spacious environment. In addition, if they have parents, domestic helpers, or pets that may share the space with them, this would be an important point of consideration.
New residents of BTO flats may realize key differences between their family home and BTO flats. Namely, certain features such as balconies and in-house rubbish chutes are no longer made available. These are still present in some older resale flats, and if these are critical to you, resale flats could offer this benefit.
Costs and Grants
HDB Resale Grant Source: 99.co
There are many grants afforded to first-time buyers of BTO flats or resale flats.
CPF Housing Grants
Upon successful flat booking, CPF Housing Grants are fully credited into the applicant’s CPF Ordinary Account. This would offset the purchase price of the flat, thus, lowering the home loan amount required. The key grant that you can look at is the Enhanced CPF Housing Grant (EHG). These are the requirements:
Income Ceiling: Your average gross monthly household income for the 12 months before your flat application must not exceed $9,000.
Previous Housing Subsidies: You and all other co-applicants and essential occupiers are all first-timers
Employment: You and/ or your spouse/ fiancé(e) must: have worked continuously for 12 months prior, to the flat application, and would still be working at the time you submitted the flat application.
Remaining lease of flat: 20 years or more Flat must have sufficient lease to cover the youngest buyer and spouse/ fiancé(e) to the age of 95 to qualify for the full EHG. Otherwise, the EHG will be pro-rated.
Other property ownership: You and the other flat applicants must not own any of the following properties whether locally or overseas, or have disposed of any such properties in the 30 months before your new flat application: Private residential property (including privatised HUDC flats and ECs), House, Building, or Land
Grant amount: $5,000 – 80,000, depending on household income. (See here for more information)
For resale flats, there are two other grants available: Family Grant and Proximity Housing Grant.
Depending if you and your spouse are Singaporean citizens (or not), are buying a 2-room,
For 3-room, 4-room or 5-room apartment, you could receive between $30,000 – $50,000 of the Family Grant. (See here for more information)
Proximity Housing Grant
For those who are living with, or close to their parents or parents-in-law (within 4km), you could receive between $10,000 – $30,000 of Proximity Housing Grant. (See here for more information)
Future Property Plans
Just like buyers of BTO flats, buyers of resale flat have to fulfill a minimum occupancy period (MOP) requirement of 5 years. If you do intend to buy a BTO flat in future, in order to be considered a “first-time buyer”, do take note of the requirements as follow:
- Not the owner of a flat bought from HDB, or an EC/ DBSS flat bought from a developer
- Not sold a flat bought from HDB, or an EC/ DBSS flat bought from a developer
- Not received any CPF Housing Grant for the purchase of an HDB resale flat
- Not taken any form of housing subsidy
As such, you may need to consider not to apply for the CPF Housing Grant when you buy your resale flat in order to increase your chances of applying for a BTO flat in future.
We understand that there are a lot of concerns that you may have especially if you did not manage to get your BTO flat of your choice time and again. It may seem like the traditional route to apply for a BTO flat before you can start your family.
However, you may be surprised to know that many other Singaporeans willingly choose to buy resale flats because they want to choose a unit with great location and features, not because they are pressured to choose resale flats as a ‘worse alternative’!
You may be looking at resale condominiums instead of resale HDB flats, for that, read our previous post that compares between new launch or resale condominium flats.
At Home Quarters, we have helped many friends to find their dream home by guiding them through the journey of finding their ideal unit. You may have many concerns – it is perfectly normal – just contact Home Quarters by going over to homequarters.com.sg or send us an email at firstname.lastname@example.org or direct message us on Facebook or Instagram. Let us know and we can start right away to address your needs.
That’s it for this article! Stay safe everybody, and remember, call Home Quarters and start packing!