You might have heard about BTO, Sale of Balance Flats (SBF) and Resale from casual talk with your peers. But should you actually apply for a BTO flat? Or should you purchase a SBF or resale unit? Which one is the best option for you and your family?
The short and sweet answer is that you should go for a BTO unit if you do not need a flat urgently and that a sales launch has the location you desire.
In this StyleMag article, we will discuss the pros and cons of BTO vs Resale vs SBF to help you make a better house hunting decision!
5 Factors for Consideration:
- Price & Grants – How affordable is the flat?
- Waiting Time – How long before you are able to move in?
- Location & Amenities – Are there useful amenities around?
- Choosability – Are you able to choose the area and unit you desire?
- Future Growth & Value – How will future developments affect the house?
Read our comprehensive analysis on BTO vs Resale vs SBF to help you make an informed decision.
(Click to jump to each section if you would like!)
#1 Build-to-order (BTO)
The most popular option amongst young couples trying to find their first nest. Let’s find out if choosing a BTO flat the the right option for you before you pop the question: “BTO ai mai?”.
Price & Grants:
BTO is meant to be an affordable housing option, especially for young couples and families. As such, in terms of price, it is the lowest among the lot. However, do take note that this only applies for non-mature estates as BTO launches in mature estates like Kallang or Tampines tend to be pricier.
Grants are also plentiful with the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG) available for applicants. Depending on your household income, you may be entitled up to $80,000 for a BTO flat. To learn more, be sure to read up on our guide on BTO financing and grants!
Just as its name suggests, BTO flats are build upon ordering! It takes about 2-3 years before you are able collect your keys for your flat. Thus, BTO is suitable if you do not urgently need a home. If you are, BTO is out of the question and your only options are resale and SBF flats.
Location & Amenities
How well this factor performs truly depends on if you are going for a mature or non-mature estate. New and non-mature estates such as Tengah, Sembawang and Jurong West may seem “ulu” in the beginning, but do be patient! Transportation services, shopping districts and community centres take time to take shape and it will be worth the wait.
Take Punggol for an example. The non-mature estate used be a place where everyone shy away from. Fast forward a few years, Punggol BTO flats are frequently over-subscribed as applicants are attracted to waterfront living with improved amenities such as Waterway Point Shopping Mall and the LRT system.
There are limited choices when it comes to your BTO flat. Firstly, each sales launch only features 2-4 areas. For example, applicants for the February 2018 sales launch are only able to choose between Jurong West, Seng Kang and Kallang.
Secondly, your BTO queue number also decides your priority in unit selection. The lower the number, the earlier you get to make your choice. If your number is too high, the units you desire may have already been taken up.
As such, BTO is a good choice if the location you are interested in is having a launch and that you are not too picky on which unit or floor you are on!
Future Value & Growth
One of the best things of a BTO unit is that you are getting a brand new flat with a 99-year lease. If time is your side, you can expect new amenities and developments to increase the value of your home over time.
One tip which allows you to peer into the future is to look at the proposed future developments. This is unlike buying a resale home in a mature estate which will have a lower lease period remaining and is unlikely to have new developments given its age.
Resale flats may be older (a better word is “mature”) but they might come with attractive amenities such as MRT stations, reputable schools and shopping centres. Let’s see if resale flats are a good fit for you.
Price & Grants
Due to its maturity, a resale unit usually costs much higher than a BTO or SBF flat. This is especially true if the resale flat has desirable amenities nearby. Nevertheless, do note that HDB resale prices has been on a decline and you may find good deals if you look hard enough.
In terms for grants, it is also plentiful for resale flats. There are CPF housing grants or the popular Proximity Housing Grant available. Such grants are available for single Singaporeans, first-time and second-time applicants. We recommend heading over to HDB’s website to see which grants are applicable to you!
Unless the current owners have not found a new place, the waiting time for resale flats are usually the shortest. In many cases, the units have already been vacated.
As such, resale units are often good options for those who urgency need a place to stay. Do remember to double check with the property agent on the exact date for the keys handover!
Location & Amenities
Most resale flats tend to be mature estates with well-established MRT lines, bus stops, shopping malls and nearby markets.
For example, Jurong East HDBs are usually walking distance or 1 or 2 bus stops away from JEM and Westgate Shopping Malls. The area is also served by 2 MRT lines (Green & Red lines) which makes it much more accessible.
Of course, you will need to consider that you are getting an older unit in an aging estate. Some may mind the old age but others may think that it adds to the “homely” atmosphere. It truly depends on personal preference.
Resale flats allows for the greatest choosability as you are able to view, touch (and even smell) the unit before purchasing it. If you like it, you may hand in an offer, Otherwise, move on the next one!
Be sure to take advantage of this and consider the unit based on its floor level, closeness to the lift, interior layout, sun facing and more. To be extra sure, arrange for a second viewing before placing an offer.
Future Growth & Value
As mentioned earlier, most mature estates already have existing amenities and new and major ones may not be on the horizon unless you are really lucky. New developments may come in the future, but it may not be as plentiful or quick as BTO flats.
Nevertheless, if you are going for an older resale unit, you may look forward to the Home Improvement Programme (HIP). This programme is a heavily subsidised by the government and aim to rejuvenate an aging HDB block.
In terms of value, note that all HDB flats comes with a 99-year lease. As such, a resale flat will have a shorter lease remaining. This may affect its future value as it resale price would likely drop as it the unit gets close to the 99-year mark.
#3 Sale Of Balance Flats (SBF)
SBF is quite similar to BTO units except that they have already been built. To put it simply, they are left-over units from BTO launches that have not been purchased.
Price & Grants
In terms of price, SBF units tend to be pricier than BTO flats as you need not wait to get your flat. On the other have, it is usually priced cheaper than resale flats as it is once again in a non-mature estate.
When it comes to grants, both SBF and BTO applicants have access to the same grants. As such, both the AHG and SGH are available.
As the units are already built, successful applicants are able to receive their keys and move in within weeks. However, as both SBF and BTO units are partially bare (unlike resale flats), do take into account of the time required for renovations and furnishing.
Location & Amenities
SBF units are likely to be situated in non-mature estates as BTO launches in mature estates tend to be extremely over-subscribed. As mentioned previously, this means that you will have to be patient for new developments to comes but they are definitely on its way!
As its name suggests, SBF units are usually “unwanted” units left-over from BTO launches. Despite this, there are usually plenty of good SBF units as some BTO applicants might have dropped their queue number. Not to mention, you get to view the unit before actually making the purchase, just like what you get with a resale flat.
Future Growth & Value
SBF units are usually relatively new, hence their lease should be close to 99-years. Once again, similar to BTO units, you may expect the value of the unit to increase as more amenities are built around the area.
Now, you might be asking, which option is the best one for you? To help you decide, we have created a summary table for you. At the end of the day, remember to use these 5 factors to help you make an informed choice – good luck!
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