Singapore Property Truths for 2016

Singapore Property Market Truths for 2016

Is it time to accept a new normal?

We’re already a few days into the start of a new year and the Singapore property market doesn’t show any signs of a quick recovery. Prices are inching down (though at a slower pace), and buyers are pretty much sitting on the sidelines waiting for either a further fall in prices or the removal of the ABSD (Additional Buyers Stamp Duty) before re-entering the market.

To add salt to the wound, a soft rental market and predictions of a financial downturn is further scaring off potential investors.

Is the property slowdown a good thing? 

Apart from forcing practicing agents to turn to other means of income (helloo Uber), the property slowdown has actually allowed prices to soften so that first time buyer or first time investors can actually get a good bargain if they play their cards right. Look at it this way, if you buy with contingency measures set in place for the worse case scenario, you are actually in a better position than someone who buys in a good market, and who is unprepared for a downturn.

That brings us back to the situation that we are in today. Rather than waiting for a single turning point and for things to return to the ’normal’ of the previous years, maybe it’s time to face facts, to welcome the new ‘normal’ and embrace the opportunities that 2016 will bring.

Singapore Property Market in 2016

1) It’s all about the Long Term

Gone are the days of property prices rising continuously and at such a fast rate that flipping properties becomes the norm. In fact, the Seller Stamp Duty (SSD) was introduced to stop this and with it still in force, property owners have to be doubly sure that they’ll have the holding power to weather dips in property prices and rental demand. The reality is that prices are slowly dipping and might dip further with the impending financial slowdown, so the rental potential of the investment property you buy is extremely important. In a good market, the rental yield or the passive income that you collect each month can be a determinant of a good investment property. However, in a bad market, getting clients just so that you can cover the monthly mortgage should be your focus. See point 2.

2) Lose the battle, Win the war.

In a situation where supply exceeds demand, you will definitely be faced with tenants asking for a lower rent or even demanding more furniture etc, which will come as a shock especially if you had the upper hand for the past few years.

If it is one of only a few offers that you receive, re-consider which of these situations would be worse; a slight loss in income (even if it means topping up a few hundred dollars of the mortgage for the duration of the lease) or paying the whole mortgage by yourself for a few months.

If you are still servicing a loan from a bank, the answer should be pretty apparent.

However, instead of feeling blue about having to suffer a loss, you need to think about the fact that the monthly rent the tenant is paying each month contributes to the capital build up of the property. When you sell the property, this would be part of your profit.

Accept small losses as part of the bigger picture. Even if it is a small loss for one or two years, the money that you are putting in can be considered a form of forced savings for your future.

3) Is your HDB still an investment?

Sorry HDB owners (especially those who bought their property between 2008 and 2014). If you were looking at a quick profit by selling your flat, you would be very disappointed. With prices stagnating, you probably would not have made much cash profits when you factor in the amount of CPF you would have to refund. However, should this be the only indicator of a ‘profitable’ transaction?

Even if most of the ‘profits’ or appreciation is in your CPF, this can still be utilized to offset your next mortgage if you are looking to upgrade to fit the needs of a growing family. If this move is beneficial to your family (and your pockets), you should still take advantage of the CPF appreciation because it’ll take a while for HDB prices to go up this high again. Wait any longer and you would probably run a deficit and end up owing CPF i.e. a negative sale.

Why will HDB prices not rise as high in the short term? 

  1. The massive BTO supply pumped in,
  2. The new method of calculating how much HDB loan you are entitled to i.e. the Mortgage Servicing Ration (MSR) limits the loan amount that can be taken for HDB flats.
  3. The new procedures where the valuation of the flat is “hidden” from the sellers.

Will my HDB ever be profitable? 

It depends on what you consider profits. For you to truly make a cash profit, the price appreciation of your flat will have to exceed the interest rate + the CPF accrued interest rate. If you have a HDB loan, this will mean that to get any cash out from your HDB flat, the prices need to rise at least  2.6% +2.5% = 5.1% each year.

4) Location matters more than ever.

If you are prepared to purchase an investment property, keep in mind its not just about the price of the property , it is also about how easy it will be to rent. A cheap property or low property prices does not necessarily mean that the investment would be profitable.

To determine this, put yourself in the tenant’s shoes. In a market where there’s a lot of choice, why would they go further when they can rent one near amenities and public transportation?

5) Opportunity fund VS using all your life savings

In an uncertain market, the worst thing you can do is to ‘gamble’ your life savings. Even though property investments theoretically can be a relatively safe form of investment, you do not want to add on to the added stress of an underperforming investment.

Set some money aside in an ‘opportunity fund’ that may come your way but make sure that this is money that you can afford to lose.

6) Find legal loopholes & use it to your benefit.

The Government’s Cooling Measure rules are pretty straightforward. 2nd property but you still have an existing housing loan? You’ll only qualify for a 50% loan and you’ll have to pay the ABSD. Buying a 2nd property but you’ve cleared your other housing loan? You’ll need to pay only the ABSD.

Consider decoupling . That way you’ll qualify for an 80% loan and won’t need to pay the ABSD.

7) Find someone who will tell you both sides of the coins.

Everyone hates salespeople. I hate them too. (I know, strange considering my choice of profession) But truthfully, I especially hate how I have to only share how the ‘grass on the greener’ when on duty at a showflat.

You have to understand that agents at showflats are representatives of the developers. They are not allowed to speak ill of a property or to even pitch other properties, even if we think they are more suited to your needs. (That’s natural don’t you think? Imagine walking into an apple store and having the salesperson tell you that you actually need a PC, strange right?)

Speak to us on a one to one basis, and let us understand your needs and requirements. Agents from reputable agencies have access to a whole list of properties as well as get the info first hand when developers give discounts. We’d be more open to giving you the whole story when we’re not in a tight position.

8) Always do a stress test

Remind your agent that you would like do a stress test to measure affordability. The stress test would give you a gauge of how much you will be paying if the interest rate reaches the support level of 3.5%. To add in an additional level of security, predict a scenario where rents fall to a level where you have to top up $200 – $500 to the monthly mortgage of your investment property. Are you still in a good place financially? If not, put off purchasing that property until the market or the rent demand stabilises.

Chicken Little or Warren Buffet?

Chicken little thinks that the sky is falling, while Warren Buffett knows that opportunities are present when times are bad. While we don’t deny the fact that the market is not stable right now, there are also gems out there for you to consider. If you are in a good position financially, consider entering the market when everyone else is skeptical.

After all, would it be better for you to enter the market and have the upper hand when no one is buying or would you prefer to wait for the floodgates to open when the cooling measures are removed?

Can your HDB flat still be used as a retirement plan?

Is your HDB Flat your only retirement plan?

Avoid making this mistake before it's too late.

I felt compelled to write this post after reading this post on PropertyGuru about a 64 year old Singaporean who would not have much cash for retirement even after selling his Tampines Court Apartment. This is even though he bought the unit before privatization i.e. it experienced a substantial increase in price from the time he purchased it.

The owner was appealing to buy a BTO from HDB, most likely for the lower prices, which would free up more cash for his retirement.

Reactions on the Propertyguru FB post showed that most people were not convinced that this could happen and accused him of lying to get special privileges from HDB.

Tamp Court FB Pic Singapore

However, as a practicing agent, I feel that it is important for the general public to know that this type of scenario is NOT an exception.  It is increasingly becoming the norm, and it is especially sad for those who want to retire but then realise that they will NOT have much cash proceeds from the sale even though their flat price has appreciated substantially. 

By that time, you won't have sufficient time to start a proper retirement fund and most would have to resort to working for the rest of their lives. 

If you are still confused about how this might happen, I've included a case study below from a Singaporean couple who I have recently spoken to. Details have been made generic for educational purposes. 


Mr and Mrs XYZ are in their late 40s and have 3 children who are still in school. They bought a resale executive flat in Tampines for $443 000 in 2001. They took a HDB loan with a 2.6% interest rate.  Currently the selling price of that flat (as well as the estimated valuation from SRX) is around $620 000. 

They have been monitoring the market and since prices of flats have been falling, they would like to cash out and downgrade to a fully paid 4 room flat before their CPF gets compulsorily diverted into the Retirement Account.

Outstanding Loan : $195 000

They do not have much CPF in their ordinary accounts (OA).​

MR XYZ : CPF Usage for property + Accrued Interest = $ 230 712 +$61 379 =$ 292 091

MRS XYZ : CPF Usage for property + Accrued Interest : $83 642 + $23 130 = $106 772

Total to be returned to CPF = ​$292 091 + $106 772 = $398 863

Cash Proceeds  = Selling Price of the Flat  minus (-)  the existing loan minus (-) the amount you need to return to CPF. 

Therefore for this couple , the cash proceeds from the sale of their flat would be a mere $620 000 - $195 000 - ​$398 863 = $26 137.

This also means that they are only able to use $398 863 from their CPF funds for their next flat, without even considering additional factors like renovation costs etc. 

If they delay their decision, we predict that the HDB ramping up supply would lead to a further dip in prices, and with interest and accrued interest still accumulating, they might have a negative sale further down the road.

Alternatively, they might want to wait until their children are all grown up, and move into a studio apartment so that they can pocket more cash from the transaction. 

Why were my parents able to retire on the funds from their HDB flat? 

  • ​Prices of HDB Flats were extremely low 30 - 40 years ago and it is a norm to see prices of flats appreciate by 3-4 times. In contrast, the prices of flats of flats purchased about 10 years ago have only appreciated by less than half. 
  • The previous generation most likely paid for their flats by cash (instead of CPF) and this reduces the amount of CPF and the accrued interest to be refunded back into the account.
  • The minimum sum for couples increase according to inflation  which means you will be paying more.

Will the prices of HDB go up? 

There will definitely be an increase based on inflation but we don't forsee double digit growth or a doubling of prices like that in 2008 - 2015. If you look at the HDB Price Index Below, you'll see that the growth did not occur in history and probably would not continue, especially with Ministers promising to keep public housing affordable. 

HDB Price Index 2016

What does this mean for you? 

We are not fortune tellers and we cannot predict how the market would be like when it is time for you to retire but this is some advice that we would like to give so that your situation won't be so tight 20 - 30 years down the road. Of course, you have to carefully consider each one with regards to your own risk appetite and financial situation.

  1. Plan for retirement early and don't depend on your HDB flat as a retirement p​lan. 
    • Just to understand how much interest you will be paying ( believe me it can be a shocker) , find a free mortgage calculator app or online. The total amount of interest you pay will be based on your the interest rate, your total loan amount, and the number of years you are taking the loan for.  Unfortunately there are no calculators online to estimate accrued interest, so you can estimate it using a 2.5% interest rate. 
  2.  If you are the type who allows excess CPF to just sit in your OA, you should consider paying of your home loan early.
    For HDB loans, this reduces the total amount of interest and accrued interest you have to pay. Making Partial Capital Repayment  on HDB loans is extremely easy to do and there are no penalties for early repayment. 
    For bank loans, you need to check with your banks if there are any penalties for early repayment.
    • NOTE : We understand that there multiple point of views about paying off a mortgage loan early. From our point of view, paying off mortgage loans early works well if it is for your own residence. For properties that you rent out, the strategy should be different since it is the tenants who pay for the interest and the principal. 
    • We also know about the argument that a person shouldn't pay off their home loan early because if you die, your home would be covered by insurance and your spouse will get both your existing cpf and the insurance payout ( instead of nothing since you used up your CPF to pay for the loan) . Well we can't argue with that, but we also hope that you have a plan in place if both of you live long and healthy lives. 
  3. Look into other forms of retirement plans or purchasing another private property  to fund your retirement as the rent that your tenants pay will contribute towards your equity. Once the tenants fully pays off your mortgage for that property, it can be a source of monthly income for you. 

Buying a HDB resale property: Does $0 COV really mean no cash upfront?


Resale HDB Prices : $0 COV

Do you need cash to buy a HDB Resale Flat?

On 10 March 2014, HDB revised the procedure for buyers to purchase a resale HDB property from the open market. Since then, prices of HDB flats have been going down, with one very obvious change  being the drop in the asking COV (Cash -Over-Valuation)  prices.

With the change in procedure, sellers are no longer able to dictate how much COV they want but instead have to “package it” into the total asking price for the flat.

What does this mean for buyers? Does this mean that there will not be any COV payable? Does this mean that buying a resale flat does not require any cash up front?

Not quite. There might be COV involved AND there is still some cash involved in the purchase.

Before we explain the COV portion and the cash involved in the process, buyers should first understand the old and new HDB resale procedures, and how it will affect how much cash you need for that resale HDB.

Old Resale Procedure

Prior to 10 March 2014, when the seller of a flat decides to sell, they would purchase a valuation report from a valuer through HDB. The valuation report will give the seller the ‘starting price’ of the flat, and the seller would add on to it by placing a cash premium on top of the selling price.

This cash premium was known as Cash over Valuation or COV and you cannot take a loan to cover this amount. Note that the banks or HDB will only grant buyers a loan based on the official valuation of the flat.

It got to a point where COVs went up to $100 000 and finding a flat with low COV was almost like hitting the jackpot.

New Procedure

When a seller decides to sell his home, he can no longer get an official valuation of the flat. Instead, he can review HDB’s recent transaction of flats in the area or use various tools available online for example on SRX online to make an estimate of the value of his flat.

With the estimated valuation in mind, the seller can then invite buyers to view his flat based on his selling price, which includes the COV if any.

If the buyers are interested in the flat, they will put in an offer.

The negotiation process starts and once both buyers and sellers arrive at a mutually agreed price, the seller will grant the buyers an option to purchase (OTP). The buyer will then put a deposit (also known as option money), of up to $1000.

With this option to purchase, buyers will proceed to apply for a valuation of the flat via the HDB website. HDB usually doesn’t disclose to the valuers the agreed selling price of the flat.

The valuation company will then send the report directly to the buyers, which means the Seller will not be informed about the valuation of the flat. Whether or not the Seller finds out about the valuation, he will not be able to adjust his selling price.

Only with this valuation report, will the buyers be able to determine if they need to top up any cash for the flat based on the following scenarios.

  • If the valuation matches the agreed selling price, the flat is considered to be sold at valuation . Buyers They do not have to top up any cash for the flat)


  • If the valuation is more than the selling price of the flat, the flat is considered to be sold below valuation. Buyers do not need to top up any cash for the flat.


  • If the valuation is below the selling price of the flat, the flat is considered to be sold above valuation. Buyers would have to top up cash to make up the difference between the loan granted (i.e. the valuation) and the selling price.

However, at this stage, the buyer has not confirmed the purchase. If they find that the COV is too high, they are still allowed to back out of the deal but they will not be able to get back the initial deposit made to the sellers.

What are the other costs involved in buying a resale flat?

Apart from the Cash over valuation (if any), there are also other costs, which you would need to pay when purchasing a resale flat.

Costs Payable by CPF

(If your cpf is insufficient, you would need to top up by cash.)

  • Stamp Duty (This is about 3% of the value of the flat)


Costs Payable by Cash only

A) Option fee

This is the ‘deposit’ you pay the seller to kickstart the buying process.

This amount is between $1 to a maximum of $1000. The current market practice is $1k but this is negotiable.

B) Exercise option fee.

This is the fee you pay to the seller to confirm your purchase. after you have received the valuation report and have arranged for a loan with either HDB or a bank. This amount is also negotiable but the current market practice is $4000, which is also the maximum amount legally.

C) Valuation Cost

  • $140.40 for 1-2 room flats and
  • $199. 25 for 3 room and bigger.

D) Resale Application Fee

  • $40 –for 1-2 room flats and
  • $80 for 3 room and bigger


E)Property Agent’s Commission.

For a HDB flat, the market rate is typically 1% of the flat price excluding GST.

In contrast, buying a BTO from HDB is substantial cheaper but has disadvantages like a long waiting time.

If you are still undecided, you might want to read our article comparing a BTO and a Resale HDB Flat .

HDB Resale Flats Property Singapore


You can read up on the costs involved when buying a BTO direct from HDB here.


Good Luck with your home search!


Mid 2015 Singapore Property News Update

Singapore Property Market News

 Mid 2015 Singapore Property News Update

It’s been an interesting 2015 for the Singapore Property Market, with the slowdown showing no signs of immediate relief. When compared with those sold in 2014, sales of new homes were down 57% according to this PropertyGuru article.

Rental yields are also down, and this is attributed to the increasing supply of new homes in the market as well as a supposed tightening of foreign talent inflow.

Even foreign press has given their inputs on the property market in Singapore. Bloomberg commented that defaults are rising especially for owners of multiple properties who most likely cant afford to maintain multiple empty homes.

However, while the volumes have gone down, prices have not budged much, with the non-landed prices dropping only 4% in 2014.

Analysts predict that the government would only take away the cooling measures once prices have dropped a certain level, most likely around 10%.

Banks have also given their forecast of the property market in Singapore, a BNP Paribas report stated that prices might still drop another 10%. UOB research stated however that there would be Government intervention by the end of the year.

From our point of view, there probably wouldn’t be drastic government intervention unless there is a repeat of the 2008 situation. The MERS scare in South Korea might be a critical point since Sars had made a huge impact in the property prices.

You may also want to refer to URA’s website for official statistics.

This is Propertyguru’s forecast for 2015.

For those who want to take advantage of the drop in property prices, you might want to read our article on beating the cooling measures and avoiding the ABSD.


Applying for the May 2015 BTO launch or SBF? Some things you may want to consider.

May 2015 BTO SBF

If you’re in the market for a new home, you’ve probably noticed that HDB has just released the sale of over 9000 Built – To –Order (BTO) Flats and Sale of Balance Flats (SBF May 2015).

9431 units all around Singapore to be exact. This is part of the Government’s drive to increase the supply and possibly to drive down prices to make HDB flats more affordable.

The price of new flats are certainly very tempting, but before you submit an application for a unit, here are a few factors you need to consider.

1. Resale Levy

A lot of prospective buyers of new flats are not aware that they would need to pay a resale levy if this is their Second Subsidized HDB Flat.

What is a subsidized HDB flat?

It is one of the following

A) A flat that you purchased directly from HDB either from a previous BTO or SBF or if you’ve purchased it a while ago, from the ‘Walk-In Selection’ scheme that HDB used to have. Flats bought directly from HDB are typically cheaper than those bought on the open market.

B)A resale flat purchased using a grant, typically the first timer grant of $30 k or a family grant of $40k.

According to HDB, the resale levy is “ meant to reduce the subsidy on the second subsidised flat so as to maintain a fair allocation of public housing subsidies between first- and second-timer citizen families.”

This ensures that owners of subsidized properties cannot or shouldn’t profit excessively from the sale of the first flat.

How much Resale Levy do I need to pay?

The amount of resale levy you pay depends on the size of your first flat.

Resale Levy Table

[Please take note that you might also be affected by the old resale levy policy that was in force before 3rd March 2006. ]

3)Loan amount you are entitled to.

The method of calculating the HDB loan amount you are entitled to or the MSR has changed as part of the Government cooling measures. Even if your income situation has not changed since your last Housing Loan Eligibility (HLE), you may not be eligible for the same loan amount.

As of 9 December 2013, based on the new MSR rule, your HDB or EC loan cannot be more than 30% of your salary. The loan tenure has also been reduced to 25 years.

You should also take note of the no of years left that you are eligible to take a HDB loan.

4) Nearing Retirement age and Minimum Sum

If the purchase of the second BTO takes place while you are nearing 55, you should be aware that you would need to set aside half of the minimum sum in your retirement account (RA), so you would need to plan your timeline properly to avoid being in a situation where you do not have sufficient funds to pay for the BTO/SBF.

4) Miscellaneous costs for renovation

Although getting a BTO may seem like a great deal, you should factor in miscellaneous costs like renovation, furniture etc . Certain developments may come with built in wardrobes, toilet accessories,  but you may want to also hire your own contractors.

You should also read our article on the comparison between BTOs and Resale Flats

5) The falling prices of flats

The introduction of new flats in the market is meant to stabilize the demand and supply. High Demand and insufficient supply led to sky high prices and the Government is working hard to stabilize prices though the injection of supply.

However, this also means that the price of your current flat might fall. Falling prices does not mean that you should not sell your flat. It just means that you should include a buffer amount when doing the calculations to determine your profit.

Good Luck! 


Singapore Condos : Which one should I buy? New Launch, Recently TOP or a Resale Unit?

Buying a private property in Singapore

If you are looking to find out more information on executive condos, click here instead

Which Singapore condo development should i choose

It’s come to that point in your life where you know the time is right for you to get an investment property  to rent out in Singapore. ( For purposes of this article, we shall refer to properties that you rent out as rental properties).

You’ve been patiently monitoring the market and you are ready to swoop in. You’ve done your finances, reorganized your property portfolio around the additional buyers stamp duty (absd). 

Continue Reading

A Quiet 2014? What does this mean for buyers and sellers of HDB Flats in Singapore

HDB Flats in Singapore

Recently, several newspapers have been publishing forecasts of a quiet 2014 for the real estate market including HDB Flats in Singapore. (For example, this one by Straits times.) This, in addition to all the cooling measures rolled out by the Singapore Government since the September 2009. As an observer who owns a HDB or need one pretty soon, its no wonder you’re confused about how it’s going to affect you.

Housing is a tricky topic. It can make a person rich if bought and sold at the right time, but at the same time there are thousands of bankruptcy cases because decisions are made on impulse and without proper planning. Despite that, no one can argue that housing is a basic human need, because everyone needs a roof over their heads. As public housing, HDB flats in Singapore were created for that purpose, i.e. to fulfill the basic human need for shelter.

[Read more…]

First Timers Dilemma : HDB BTO or Resale Flat?

Should first -timers buy a HDB Build to Order (BTO) Flat, HDB ROF (Re-offer of Balance Flat) or Resale Flats?

In Singapore, HDB (Housing and Development Board) is the main developer of public homes. High rise apartments, or better known to those living in Singapore as HDB Flats, is home to more than eighty percent of Singaporeans.

Each Singapore Citizen married couple (or Singaporeans within accepted criteria) is given 2 chances to purchase apartments directly from HDB. These include HDB BTO ( Built- to - Order), SBF (Sales of Balance Flat), ROF ( Re-offer of Balance Flats) as well as Executive Condominiums (ECs). Flats purchased from HDB are usually 'subsidised' or relatively cheaper compared to the existing developments in the area. However waiting time can be substantially longer as you purchase them while they are being developed. The exact duration you have to wait depends on if you purchase a BTO, SBF, ROF Flat.

The difference between BTO, SBF and ROF.

Most Built- to -Order flats (BTOs), Sales of Balance Flats (SBF) and Re-offer of Balance Flat (ROF) start out at the same point. HDB releases a site, and invites Singaporeans to purchase a unit. Singaporeans enter their names in a ballot for a BTO and they are able to select a flat based on their ballot numbers. ( The number of times your name is entered in a ballot depends on the priority schemes you are entitled to. ) 

Unselected flats from that round will be put in the pool for the next SBF. Eligible Singaporeans apply for the SBF and if there are flats that are still unselected, it would end up in the ROF pool. The ROF was previously held twice a year but HDB has recently announced that they will offer the ROF flats throughout the year.  This would reduce the waiting time for a ROF, because the flat would probably be ready for key collection by then. 

However, HDB has also started to offer resale flats which have been returned to them for various reasons ( divorce, death, inability to pay mortgage, unable to sell on the open market etc). These flats are also included in the pool of SBF but the reasons are not disclosed during the sale. You are also unable to see or check out the condition of these flats before you purchase. 

HDB has also started to place 're-purchased flats' into its pool of SBF/ROF flats. When selecting flats, you should be aware that not all of these are brand new flats. 

SBF Flats - Flats that are taken back by HDB

Take note that not all flats sold by HDB during their SBF/ROF is brand new.


Simply put, ROF flats are flats that have not been selected by previous potential buyers because of their attributes. This should be a critical factor for Singaporeans who wants to buy a new flat for its potential appreciation.

ROF FB comment Re offer of HDB flats

What should first - timer couples do? 

For newly married couples excited to begin their lives, there’s always the choice between buying a new HDB (BTO,SBF or ROF) or a resale flat. Until recently, resale flats in the open market have been too expensive for most first timers, with COVs ( Cash Over Valuations i.e. the cash premium above and beyond the flat’s valuation) going for an average of $30 000 to highs of $100 000. With other expenses to consider like wedding, furniture, renovation etc, the COV can be a deterrent to young couples. 

COVs have been falling to the point that it is no longer a norm, however it may still exist if you purchase a flat above the valuation price. (Confused? Don’t worry, we break it down in this article. Does $0 cov mean no cash upfront?  If you need more info regarding the steps to buying a resale flat, read this, " Buying a HDB resale flat ")

However, for new couples, settling into your own home as soon as possible can be one of the single most crucial steps in life. Unless you’ve been living together prior to marriage, a practice not very common to Asians, you would treasure the privacy that a new home provides, allowing you and your new spouse the opportunity to negotiate simple things in married life (like who cooks and does the dishes) and slowly work on constructing your lives.

HDB BTO, ROF or Resale? 

If you are one of those still undecided about if you should be buying a flat directly from HDB (BTO or ROF) or a HDB Resale Flat, these are some facts you can consider.



Resale Flats

Waiting Time

From the time of launch, the waiting times have an average of 2-4 years depending on the developer’s schedule.

HDB hasn't confirmed the duration it will take to get the keys to a flat but we estimate it would take between 3- 4 months.  

Once you decide on a house and exercise the option to purchase, it would take about 3- 6 months to the point you receive keys to the flat. 


For newly married couples, getting a BTO means that you have to live with either set of parents, which can result in a lack of privacy, having to meet the expectations of the In-laws etc.

Getting a flat direct from HDB which you can move right into after marriage is ideal. 


The privacy that comes with your own space, having a room with an en suite is most ideal

Flat Sizes

New flats in BTO and SBF are typically smaller in size.

ROF which are  new flats are typically smaller in size.

Resale HDB flats are much larger in size

Settling on one with an Size and Ideal Position.

Buying a BTO is similar to buying an item virtually or online. You view it on a screen, put in your order and be patient until its delivered. You are unable to see the view, whether you face your neighbours, the direction of the wind, the afternoon sun etc. 

Unfortunately for HDB BTO, there is no return policy if you are not fully satisfied with it.

You pick the flat from a list and you are not able to know how the unit looks likes, the direction it faces etc. 

When buying a resale flat, you would put in an offer to purchase the flat if you are totally satisfied with it. This includes being satisfied with the size, the location and the position of the flat i.e. the direction it is facing, the view, etc.


The cost of a Build to Order flat is subsidized by HDB which means that it is cheaper.

This means that you will NOT be able to utilize your first timer or proximity grants. ($40k - $70 k )

However if the total income of you and your spouse is less than $6500, (depending on the size and location of the flat you select), you will be eligible for the

Additional Housing Grant and the Special Housing Grant.

Also, if your order for the BTO is not put in at the initial launch, i.e. you buy it at the SBF (Sale of Balance Flat) Exercise, the price may have risen substantially to be similar to flats in the resale market.

The cost would be similar to a SBF. It would not be as cheap as a BTO as the unit is already completed. However, it will still be considered subsidised compared to a flat sold on the resale market. 

Resale Flats prices are pegged to the market rate of houses in the area and the current Real estate prices at that point in time.

For first time buyers, HDB provides a grant of $40 000 - $50 000 or more depending on your household income.

This is not inclusive of the $20 000 Proximity grant that you can get if you pick a flat close to your parents/ parents-in-law

You may also qualify for the Additional Housing Grant  of up to $40 000 if your combined income is less than $5k.

Renovation Costs

New BTO flats come unfurnished and you have to factor in renovation costs.

However, as they do not have existing floorings, cabinets etc, you can save quite a lot on hacking costs. You basically have a blank canvas to create your ideal living space.

Another positive point for new couples is that buying a flat that would only be ready in the future enables you to save up for renovation costs instead of paying additional interest on loans

Renovation costs of brand new flats are cheaper, but if you selected a 'repurchased' flat from the SBF/ROF, it would be similar to a resale flat which needs a total makeover

With regards to Renovation Costs, there 2 are scenarios which can happen.

A) You can select an apartment in good condition and save time and effort and money.

B) If you want to redo the flat, you would need to spend more on hacking and tearing down the current furnishings.

Old homes may also come with defects that form over time, for example leakage in pipes, crack in ceilings etc.


New flats in new estates usually do not have established amenities in the neighbourhood.

Similar to new BTO/SBF if they are brand new but similar to resale flats if they are repurchased. 

Mature housing estates have amenities conveniently within the neighbourhood

Potential for appreciation

If you bought a BTO and are able to select one with the best attributes, i.e. good unit in a good location, that is not faced with ethnic quota restrictions, you can somewhat count on an appreciation. 

Flat prices may appreciate to match the resale prices but you may find it hard to find a buyer because of the flat's attributes.

Flat prices might not appreciate as much as BTOs or SBF Flats.

If you are ready to purchase a resale flat but you are not sure where to start, you may find this article useful : Buying a resale flat.

HDB Resale Flat - Where to start