Choosing between a BTO and resale flat? Here's what you should know

With close to eight in 10 Singapore residents living in HDB flats, it's highly likely that most of us will have to consider the age-old conundrum of purchasing a Build-to-Order (BTO) or resale flat at some point in our lives.

And if you're not familiar with the main differences between both public housing options, it can be tough navigating the overwhelming sea of information. But fret not, we've got your back with our handy list of fast facts that will help you make sense of your options. 

Waiting time

How urgent are your housing needs? If you need to move into a new place ASAP, BTOs are definitely out of the question with their infamously long wait. It can take up to five years or more for a BTO project to be completed, whilst a resale flat can be ready in a matter of months after the deal is sealed.

Budget

How's your budget looking? For the cash-strapped, or young couples with a conservative budget for their first matrimonial home, the BTO route is likely the most inexpensive housing option in the market with its subsidised prices, and especially so in non-mature estates.

But if you are in a hurry to move out of your current place and have moolah to spare, then resale flats are the way to go. 

Income ceiling

Now that we're talking about numbers, it's time to consider income ceilings too. For BTOs, household incomes are generally capped at $7,000 for singles and $14,000 for families or couples. On the other hand, there are no restrictions for resale flats — unless you're planning on receiving housing grants. 

Grants

TLDR: First-time buyers can receive up to $80,000 to finance their purchase of a BTO, and double the amount for resale flats. These housing grants are available at the moment: the Enhanced CPF Housing Grant, CPF Housing Grant, and Proximity Housing Grant.

All three are stackable for resale flats, whilst only the first applies to BTO purchases. All amounts are halved for singles. 

Size it up

Does size matter to you? Whilst there are definitely exceptions to the rule, BTO flats tend to be smaller in size than their resale counterparts in older estates. So that's definitely something to keep in mind if you have a big family and space is a concern. 

Renovation needs

Have a think about your renovation plans — would you like a blank canvas to work with for your home interior goals, or would you prefer to opt for a flat that requires little to no work?

A BTO will meet your needs for the former with the Optional Component Scheme; you can choose to have a bare unit or with essential fittings installed. On the other hand, a resale flat that has been done up nicely can help you do away with renovation woes. 

Amenities and location

Are you particular about amenities and food options around you? Or would you prefer a specific location that's near your folks or workplace?

If so, opting for a resale flat allows you to pinpoint exactly where you'd like to live, and there wouldn't be a need to face stiff competition in balloting for a unit too.

Plus, new BTO projects — especially in non-mature estates — tend to fall behind in terms of nearby amenities like sports facilities, supermarkets and F&B choices. Again, something to think about. 

Capital growth

It may seem a little premature to plan for the sale of your potential flat before even purchasing it, but it's always prudent  to buy with an exit strategy in mind. Is it purely for your own stay, or are you planning to cash out when the time is right?

If it's the latter, consider choosing a BTO for its fresh 99-year lease. Newer flats tend to hold their value better, and the subsidised price you bought yours at means you may potentially rake in a neat profit from reselling your flat in the open market after fulfilling the five-year Minimum Occupation Period (MOP).

This article was first published in Wonderwall.sg.