For most people, a major decision that they have to make in their lives is buying a home. If you are a first-time homebuyer in Singapore, the obvious choice is an HDB flat. However, do you go for a built-to-order (BTO) one or a resale flat? Both of these options have their pros and cons and there is a lot to consider before you decide to go one way or the other. Here are the most important factors you need to consider before making the decision.
To qualify for either option, you need to be eligible for it. If you are a couple, one or both of you must be a Singapore citizen. If one of you is not, then they should be a permanent resident. If you are not getting a BTO or resale HDB flat as a couple, then you must be a Singapore citizen.
Another consideration is income. If your income is too high, you might not be eligible for the BTO option because you earn too much. For resale flats, this limit does not apply. Also, couples that have purchased an EC, DBSS or HDB flat in the past are not eligible to buy another one, but you can buy as many resale flats as you want.
Couples should also not own any other property, whether in Singapore or overseas. They also should not have disposed of any property in at least 30 months before applying for a BTO. For resale flats, couples must dispose of any private property or HDB flat within six months of completing their flat purchase.
Single people can only apply for a 2-room Flexi, and should only have purchased one property in the past. As with couples, they should not have disposed of any property within 30 months of their application. There is no income ceiling for resale flats, no limits on the size of the flat they can buy, and there are no limits for properties they have purchased in the past.
For a BTO, you have to wait for a long time for everything to be completed. This can be undesirable for those who want to close a sale faster considering that you can complete everything regarding an HDB flat in as little as eight weeks.
For a BTO, you have to have a successful application which might require that you try a few times before yours gets approved. Then you have to wait 3-5 years for the development to be complete. All this means you have to think about whether waiting would be a viable option.
Lastly, BTO flats tend to be oversubscribed. This means there is always a chance of not getting a flat even after your application is successful and have been waiting for a long time.
The first preference for a lot of people is the location. Many of these BTO projects are completed in non-mature estates. Some of them are to be built in locations that do not exist yet. If you are looking forward to living in a certain neighborhood, you might have to wait for a long time for developments to come to that particular estate.
Each BTO launch details estates where the new developments will be. The estates for the Nov BTO 2021 launch have already been announced. Because the exact locations were not announced, Property Guru put together the likely prime locations for the new developments by looking at available records and combining them with data from Google Maps. Property Guru makes it easier to find your dream home by helping you find rental property, property for sale as well as upcoming developments. They also offer advice on mortgages, home refinancing options, and housing market outlooks for investors looking to get into the Singapore market.
The second preference is space. While older HDB flats might have more floor area, the floor areas in flats built in the past 20-30 years have remained the same. The only difference is in the design of the flats. The new designs being used have allowed for the best use of the available space. The better use of the available space also makes it easier to style and decorate the home.
BTO flats are subsidized by the government and this is why they are cheaper than their resale counterparts. However, if you do your research and put some work in, it is still possible to find resale HDB flats that are very affordable. When trying to find a cheaper flat, it is also a good idea to keep other factors such as lease expiry in mind so you do not end up with a flat that will be problematic down the line.
These are some of the fundamental factors you need to think about when deciding between a BTO and a resale flat. Once you decide on either, do talk to a property expert so they can take you through the process of acquiring your first home.