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For many first-time property owners in Singapore, whether local resident or foreign, the most common choice is HDB flats. HDB stands for Housing Development Board. It's the body that monitors the public housing market in the country. HDB housing also refers to the country's public houses.
But when buying HDB's the widely asked question is whether to go for a Build-to-order (BTO) or resale flats. Of course, there are advantages to each. For example, BTO's tend to cost less than resale flats. On the other hand, resale flats don't need long waiting periods. Truthfully, there is a lot more to keep in mind — keep reading below!
First, you've got to be eligible for these flats. BTO's have stricter eligibility criteria than resale flats, including an income ceiling, a limit on previous flat purchases, and more.
For couples looking into BTO's, one half must be a Singaporean citizen; the other can be a permanent resident or a citizen too. The income ceiling for couples is $14,000. For single buyers, one must be a citizen, and the income ceiling is $7,000.
To qualify for BTO's, you must not have purchased more than one HDB, EC, or DBSS flat in the past. You mustn't also own other properties in the country or outside. Also, you must not have disposed of any property in the last month of your application.
These limits don't apply to resale flat purchases. There's no income ceiling or limit on previous flat purchases. But if you own an HDB flat in-country or overseas, you must dispose of it within 6 months of buying the second property.
BTO's require patience. While most resale HDB flats deals are finalized in 8 weeks, BTO purchases take years. First, you've got to qualify; it may take a few tries to qualify, even years. After qualification, your house will be built within 3-5 years.
Of course, there are other factors to consider before making the big step forward. Factors like price, space, location renovation costs, and the number of years left on the lease matter.
New HDB housing flats (BTO's) carry a 99-year lease. On the other hand, resale HDB flats have a limited period remaining on their lease, depending on their age. For example, an HDB flat built-in 1980 has 59 years still remaining on its lease in 2020.
Generally, older resale HDB flats have lower market values because once the lease expires, the property is surrendered to the government making it invaluable. However, it's not always that straightforward; older resale HDB's are attractive to buyers looking for properties in mature estates. These buyers are willing to pay more for these properties.
Source: Housing Development Board 2020
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