Most of us in Singapore have spent our childhoods growing up in Housing Development Board (HDB) flats. Since the 1960s, HDBs have become the default choice of a first home for most couples. However, the more popular question you might ask today is, “should you apply for a Built-to-Order (BTO) or purchase a resale flat?”

Eligibility criteria aside, both options have their pros and cons. No problem: today we’ll give you a panoramic view of BTOs vs resale flats and help you find the best fit for your needs.


The 5 Considerations of BTO vs Resale Flats

Like true Singaporeans, we instinctively look for the most cost-effective and efficient way forward. That’s why we’ll compare BTO HDBs and resale flats against these 5 practical considerations:

  1. Cost of BTOs/Resale Flats
  2. Availability of Grants
  3. Convenience
  4. Return on Investment (ROI)
  5. Location & Amenities


1. Cost of BTOs/Resale Flats

Let’s be honest: money talks. You’re committing to hundreds of thousands here, not some meager sum.

BTOs are designed to be the most affordable property option for first-time buyers. You can get a typical BTO flat from $200K to $500K. Several factors affect the price: the location, size of the property, number of rooms, the floor you are staying on, etc.

Resale HDB prices are affected by the same factors. However, resale flats are generally located in more mature estates and are equipped with better facilities and amenities. So even if you may be paying slightly more on a per-square-foot basis, you might be getting more bang for your buck, so to speak.

On top of that, older resale HDBs offer a larger floor space compared to their successors. If you’re the hospitable kind, a resale flat may be a better choice to host guests.

Here’s a pleasant surprise for you: it’s possible to find a decent 3-room resale HDB with a $200K – $300K price tag. This range is relatively competitive compared to a BTO. You can expect to pay $700K to $800K for 5-room in a prime location like Toa Payoh or Queenstown.


2. Availability of Grants

If you’re a first-time applicant, you can claim up to $80K for BTOs and $160K for resale flats. The grant amounts are pegged to your income, so lower-income families get more in subsidies.

In fact, with the Enhanced CPF Housing Grant introduced in September 2019, the government has effectively leveled the playing field for those considering resale flats over BTOs. No longer are you likely to be stuck between the long wait times of a BTO and the high price tags of a resale: if you play your cards right, you could get a resale flat at a cost comparable to that of a BTO.

The grants do come with a few caveats though: you have to be under the stated income ceilings, and the funds have to be returned to your CPF account (plus accrued interest) if you let go of your flat down the road. (You can always use it again for your next home purchase though.)


3. Flexibility in Time & Choice

The road to applying for a BTO HDB is an arduous one. You’ll go through the balloting process and compete with thousands of hopeful couples for a slim chance at getting a flat. If you’re unlucky, you might even take a few years to ballot.

After successfully balloting, you’re randomly allocated a queue number to choose your unit. If you get the later queue numbers, you’ll be left with limited choices. Following that, your BTO flat will take another 2 to 5 years to build. Yikes! That’s a long time before you get your first home.

With resale flats, you skip the painful balloting and unit selection process. You have access to all the resale flats in the market: just gotta find one that you like. After that, it’s up to you to negotiate a good deal with your seller.

When you buy a resale HDB, you can expect the handover to be completed in as short as 3 months. Even if you account for another 1-2 months of renovation, you can expect to get your home in under a year.


4. Return on Investment (ROI)

Another benefit of getting a BTO is the high ROI it offers would-be owners. As BTO flats mature, you can expect more amenities and developments to be added to your surroundings. This increases the value of your property over time.

Resale flats, on the other hand, face a challenge against the clock. Because they’re often situated in mature estates, it’s unlikely that there will be new developments. With a lease limited to 99 years, the value of your resale flat will decrease as it nears the end of its lease.

I wouldn’t put my hopes on en-bloc either as only 4% of HDB flats were put through the scheme since 1995. If your flat is one of the few to be selected, it’s like winning the lottery.

5. Location & Amenities

As BTOs are often built in developing estates, you may not have the luxury of  readily-available amenities within a 5 to 10-minute walk. You may be living at some ulu corner with only one bus servicing your area. In a few instances, you might even have to take a 20-minute bus ride out to the nearest shopping mall to get your groceries.

Contrasting this with the developed areas, you live with convenience at your doorstep. You’re surrounded by schools, hospitals, supermarkets, and sports centers. Anything you need is at your disposal.

Moving Forward:

Everyone has different considerations. Some don’t mind paying more for comfort while others are more cost-sensitive. We recommend that you and your spouse set out an agreed-upon price range and list of priorities, especially considering that you’ll have to live there for a minimum of five years before you can let go of the place.

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