BTO vs Resale Flats: Which Is Better?

Your Ultimate Guide To BTO Vs Resale Flats

One of the most expensive decisions you will have in your adult life is choosing a home. In Singapore, the two best options include Build-To-Order flats and Resale BTO flats.

While choosing between the two may seem easy if you are only looking at the price, other key factors must also be considered if you want to make the most practical choice.

Are you excited to become a homeowner, but you are not sure yet if you want a Build-To-Order flat or a Resale unit? In this guide, we will let you in on how you can make the best choice.

Here at OMY Singapore, you will discover the following:

What Is A BTO Flat?

BTO Flat Singapore

If your priority is to save money, this is the obvious option for you. This is a real estate program introduced by the Housing and Development Board (HDB) in 2001. People who want to get this apartment must comply with the HDB eligibility requirements and apply for a flat in their preferred location to get one. The construction will begin when the applicants are at least 70% of the apartments in the contract. These flats usually take 3 to 5 years to get built.

What Is A Resale Flat?

Although it is more expensive, resale BTO flats offer more flexibility when it comes to what type of unit you want to own, right down to your location and floor.

For example, if you want to be closer to your parents who live in a mature estate, you can buy a resale flat in that location, so you will not have to deal with stiff competition in BTO units. More than that, these flats are already built so there is no waiting time and there is more guarantee that you will get the unit that you want.

Another advantage of these flats is that there are better housing grants of up to S$160,000 for Singaporeans to finance this major purchase (more on this later.)

BTO Vs Resale Flats: Factors To Keep In Mind

BTO Vs Resale Flats

Here are some things you need to factor in when choosing between resale vs BTO flat.

Eligibility

It is worth noting that BTO flats have tons of eligibility requirements you must check. If you do not meet the requirements below, then resale flats are the only option for you.

  • Citizenship
  • At least one person applying for the flat should be a Singapore citizen. Other applicants can be Singaporeans or Singapore Permanent residents.
  • Income ceiling
  • S$7,000 for two-room flexi (99-year lease)
  • S$14,000 per month (three-room flats)
  • S$16,000 for executive condominium
  • S$21,000 for multi-generation/extended family
  • Age
  • At least 21 years old
  • Those below 21 years old but above 18 years old need written consent from their guardians/parents
  • Property ownership
  • Must not own other local or international property, or have disposed one within the past 30 months
  • Must have only purchased one HDB, EC, or DBSS
  • Should not have received over one CPF Housing Grant

There is no income ceiling to resale flats since the HDB cannot impose restrictions on them.

Average Price Comparison

To give you a better idea of how much you are going to spend when it comes to BTO vs resale flats in different areas, check out this table below.

Area and unit type Approximate Price for BTO Units Approximate Price for Resale Flat
Yishun (4 rooms) Start at S$328,000 S$368,000 to S$920,000
Yishun (5 rooms) Start at S$485,000 S$438,000 to S$1,060,000
Bukit Merah (3 rooms) Start at S$377,000 S$265,000 to S$1,742,000
Bukit Merah (4 rooms) Start at S$540,000 S$395,000 to S$990,000
Queenstown (3 rooms) Start at S$369,000 S$319,000 to S$735,000
Queenstown (4 rooms) Start at S$511,000 S$475,000 to S$1,000,000
Toa Payoh (3 rooms) Start at S$289,000 S$280,000 to S$980,000
Toa Payoh (4 rooms) Start at S$420,000 S$465,000 to S$1,080,000
Jurong West (3 rooms) Start at S$215,000 S$270,000 to S$559,000
Jurong West (4 rooms) Start at S$320,000 S$428,000 to S$710,000
Jurong West (5 rooms) Start at S$412,000 S$530,000 to S$888,000

Location

Location is also one of the major factors you must consider when buying a home in Singapore. Keep in mind that if you want to live in a mature estate, you may not have a high likelihood of securing a slot since most properties there are already taken.

Even if you are able to apply, the competition is high, and luck has to be in your favour to secure a unit.

Meanwhile, resale flats allow you to get a property in any location as long as there are available flats in that estate. While these are more expensive, especially in mature estates, it is a more logical choice for those who can afford them.

Urgency

If you apply for a BTO flat, you cannot live in it right away. You still have to wait two and a half to five years for it to be built. The average waiting time for BTO flats in Singapore is 4.1 years, excluding the time needed for renovations.

Meanwhile, there is no waiting time involved in resale flats since it’s already built. If you don’t have renovation plans, you can move in right away. This makes it the best option especially for

couples who do not want to put off marriage or have a kid, or those who want to avoid living with their in-laws.

For those who insist on getting a BTO flat but do not want to wait for it for a long time, they can choose to get units from the Sales of Balance Flat (DBF) or Re-Offer of Balance Flat (ROF) exercises. These flats have a shorter wait time due to one of the following reasons:

  • These flats were not selected for the exercise
  • The owner of the flats gave it up
  • Repurchased by HDB from existing owners

You may also consider open-booking flats, which are available year-round, but instead of applying for a queue number, it is on a first-come-first-served basis. These flats are booked instantly on the next working day, which is why it is easily bought by interested buyers. If you want to go for open-booking flats, you need to be fast.

Size

If your priority is the size of your home, resale flats are the best option since they are bigger than the BTO flats built today. This applies to all HDB sizes, including BTO 4 room size, HDB 4 room size sq ft, and others.

However, despite the difference in size, keep in mind that the room number may still be the same. The major difference is the size and layout of the home. As expected, newer units have a better layout, especially when it comes to the flow of the space and its privacy.

For families that want better flexibility in customising their home layout, a resale flat is more suitable because of the bigger space. At the end of the day, it all comes down to preference.

Lease

Older flats that have been built first usually have a remaining lease of fewer than 60 years, which may not be an issue for those who do not mind only having a short lease despite paying the high price for it.

Meanwhile, newer BTO flats that have a 99-year lease are great options. If you go for these flats, it means that your children may still be able to live in the flat during their lifetime – something that may not be possible in older flats.

Renovation

When it comes to renovation, resale flats tend to be more expensive since they may not have the features buyers want. This increase in cost is usually because there may be removing, and hacking involved. Here is the average cost of renovation for flats:

3-room resale flat S$40,000
5-room resale flat S$80,000
3-room BTO flat S$38,000
5-room BTO flat S$50,000

It is important to note that you may still save on renovation costs when it comes to resale flats if you are already happy with how it looks. You may also prefer a light renovation which involves changing the paint or adding other minor improvements like a kitchen counter. The high renovation cost only applies to buyers who want to totally redo the flat.

Market value

If you plan to sell your flat in the future, BTO flats are the best choice. The main reason is that the Minimum Occupancy Period is better.

For example, a resale flat in a mature estate may compete with other units that have a longer occupancy period. Customers of resale flats also compete against other homebuyers in the open market who are also not eligible for a BTO flat and are willing to pay more.

Housing grants

Resale flat buyers are entitled to more grants compared to those planning to buy a BTO unit. Take a look at the table below for a complete guide on grants.

Grant Resale unit BTO unit
Enhanced CPF Housing Grant Up to S$80,000 Up to S$80,000
Family grant Up to S$50,000 n/a
Proximity Housing Grant Up to S$30,000 n/a
Total Up to S$160,000 Up to S$80,000

For those who are single, they can get up to S$80,000 for a resale flat, which is still higher compared to up to S$40,000 for BTO units. Take a look at this table below.

Grant Resale unit BTO unit
Enhanced CPF Housing Grant Up to S$40,000 Up to S$40,000
Singles grant Up to S$25,000 n/a
Proximity Housing Grant Up to S$15,000 n/a
Total Up to S$80,000 Up to S$40,000

It is also important to note that bargaining can be a factor when it comes to BTO vs Resale Flats. For example, when it comes to resale flats, there may be more owners that want to sell their units compared to people who are interested to buy. Considering this, customers can enjoy improved bargaining power, which can further lower the price.

Current market

While flats are being sold for over S$1 in recent years and they are not new, the number of units being sold over the said amount has skyrocketed since 2021, and this trend is expected to continue in the next few years.

The major driver of the price increase is the pandemic, with more people now choosing to work from home. Considering this, having your own beautiful space has become a priority for many. Because the rent prices of condo units have also increased, a lot of people have become interested in buying resale flats to avoid paying the high cost of rent and the construction delays when it comes to BTO units.

Buying HDB Resale Flats

Here is how you can get an HDB resale flat.

  1. Log into this portal, and register an intent to buy. Then, check your eligibility.
  2. Apply for a loan eligibility letter if you plan to take out an HDB loan. You may also get a Letter of Offer if you plan on taking out a bank loan.
  3. Choose a flat you’re interested in and get your Option to Purchase or OTP from the seller.
  4. Request a valuation report of the unit immediately after you get your Option to Purchase.
  5. Submit your resale checklist.
  6. Use your OTP before it expires.
  7. Submit the resale application to HDB.
  8. Attend the required HDB appointment.

More From OMY: HDB resale prices rise again for the 26th month in a row

Buying BTO flats

Here is how you can get your own BTO flat in Singapore.

  1. Wait for HDB to launch available flats.
  2. Ensure you are eligible for a unit.
  3. Ballot for a queue number
  4. Finance your purchase by getting a loan.
  5. Book your flat and pay an option fee.
  6. Pay for a down payment after signing the agreement.
  7. Wait for your BTO to finish construction.

Frequently Asked Questions

Still got questions about BTO vs resale flats? We will answer them below.

Is it better to get resale or BTO?

It depends. For example, if your priority is to save money and you can wait for roughly 4 years until your unit is built, a BTO flat is better. However, a resale flat is the only option for those who are unable to meet the requirements of HDB.

How much cheaper is BTO vs resale?

The difference is dictated by your renovation plans, and the location of the unit, among other factors.

Why is BTO cheaper?

The prices of BTO units are subsidised by the government to make them cheaper during their launch.

Is it worth it to buy a resale HDB?

Absolutely. This is an amazing option if you do not want to rent or live with your family while waiting for a BTO unit to be built.

Is it worth buying a 30-year-old flat?

The prices of these units are cheaper compared to newly constructed ones. However, you will need to sacrifice the remaining occupancy period.

Is it wise to buy a resale flat?

Yes. One of the biggest upsides of buying a resale flat is you don’t need to spend for rent, which is expensive in Singapore while waiting for your unit to finish its construction.

Why is resale flat more expensive?

The prices are more expensive due to the market condition and demand.

Which Is The Better Option?

Ultimately, the decision depends on you. After reading this crash course on BTO vs Resale flats, you probably have a clearer idea on which option best fits your circumstance.

More from OMY: Best Mortgage Home Loan in Singapore

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