BTO vs Resale HDB? This is how you choose which is better for you

Resale volumes spiked dramatically in June and July 2020, shortly after the two month circuit breaker was lifted. If that tells you anything, it is that the demand for resale flats remains strong. And while the Covid-19 pandemic in 2020 has put the brakes on many areas of our lives, it has not been able to put a dampener on Singaporeans’ home aspirations.
Even the recent August BTO sales exercise by HDB was heavily oversubscribed. Christine Sun, Head of Research and Consultancy at OrangeTee & Tie noted that many good sites were released in the latest August HDB BTO exercise, which could have contributed to the high demand. “It has been a while since new flats were released in some of these estates.” She also pointed out that the November BTO flats will likely have even longer completion periods, “hence those who want a flat earlier would have applied during the August exercise.”
If you miss out on the recent BTO exercise, or are not eligible for them, there are still plenty of resale HDB properties available that might suit your needs. Here are some compelling reasons to consider them.
Unlike BTO sales, where the units are launched at specific locations during different exercises, buying a resale flat means you can specify where you would like to live and start your home search from there.
Some people prefer mature estates that allow them to be near their parents, have better amenities like popular hawker food stalls and good schools, and more developed transportation networks. Many stated that they had a preference for staying in the estates and towns that they grew up in and were familiar with.
Others prefer non-mature estates which are populated by younger families, and have newer public amenities.
If you are wondering how much more a flat would cost between a mature or non-mature estate, here’s how resale prices differ.
Source: Data.gov.sg, OrangeTee & Tie Research & Consultancy
For the seven months to July 2020, the median price for HDB resale flats was S$400,000 for flats in non-mature estates, while that in mature estates was S$430,000.
A big deterrent for buying a brand new HDB BTO flat is the extended expected completion times, due to the new safety measures being implemented at construction sites to curb the spread of Covid-19.
During the August BTO sales exercise, over 38,500 applications were received for the 7,862 units available. The launches were located in mature estates Ang Mo Kio, Bishan, Geylang, Pasir Ris and Tampines, and non-mature estates Choa Chu Kang, Woodlands and Tengah. The apartments ranged from 2 room flexi units to 5 room units, and prices started from $193,000.
What was worrying were the expected completion dates, which stretched from 2024 to 2027.
In comparison, completion times for BTO HDB flats previously ranged between 3 and 4 years pre Covid-19, but the 2 month circuit breaker that halted construction work and the continuing reinfections at worker dormitories is expected to delay construction work even further.
So completions for subsequent BTO sales exercises in November and February 2021 could go beyond 2027.
With a resale HDB flat, you would not need to worry about construction delays since the flats are already built.
If you are facing a space crunch at home after having children and needing a helper and/or a grandparent to help mind them, you would probably want to find a 5 room HDB flat or larger. In this aspect, the HDB resale market is your best bet, and not the BTO market.
New HDB projects currently offer 5 room flats with about 1,200 sq ft of built in area. On the other hand, older HDB projects had larger sized units, including point block 5 room units with over 1,400 sq ft of built in space. Two storey maisonettes, and jumbo flats are also exclusively available in the HDB resale market, and often located in mature estates.
If you are looking for these types of large resale HDB flats, you can try looking here.
Buyers of brand new BTO flats or executive condominiums are bound by income ceiling restrictions, due in part to HDB’s mission to provide affordable housing to the masses. As such, BTO buyers cannot have a combined hou…