ALL YOU NEED TO KNOW ABOUT

HDB RESALE FLAT

WHAT ARE THE DIFFERENCES BETWEEN HDB RESALE FLATS AND BTOs?

BTOs, or BUILT-TO-ORDER FLATS

These flats built by the government based on citizen demand. These flats vary vastly in price, depending on their number of rooms and the maturity of the surrounding estate. A BTO in Tampines would be more expensive compared to one in Woodlands, for example.

On the other hand, a resale flat is one that has already seen tenancy and is being sold on the open market. HDB resale prices are also affected by the remaining lease on the flat: a flat with barely any lease left is worth very little. Although it may seem like a minor detail, it will play a critical role in the resale value of your flat if you intend to move in the future.

HDB RESALE PRICES VS BTO PRICES
BTOs are cheaper than resale flats because the prices are heavily subsidized by the government during launch. Resale flats are also subject to market valuation, and can thus fluctuate in price. In the following price comparisons, we will be looking at figures in the lower end of the resale market.

As of March 2019, a 4-room BTO in non-mature estates such as Yishun costs around $259,000 to $304,000. A 4-room BTO in Punggol will set you back around $270,000 to $353,000.

In comparison, the resale flat price of a 4-room HDB in Yishun ranges from around $289,000 to $330,000. The Punggol counterpart is pricier, averaging about $500,000.

As you can see, HDB resale flats seem to be more expensive, but not by an extravagant amount. However, a glance at other non-mature estates shows that the price difference between them does not actually vary that much. In most cases, the resale flats are about $50,000 more expensive than the BTOs in the same location. For instance, Sengkang BTOs go for $270,000 to $353,000, while a resale flat goes from $348,000 to $430,000.

HDB resale prices are currently declining, and the gap between the prices of resale flats and BTOs are quite narrow. Despite the initial price tag of BTOs being lower, there is a chance that you can actually save more money by getting a resale flat. As your appointed agent, I will look through your financial and lifestyle needs and I will advise on what is the best choice for you. The one that will benefit you in the long run. Click below button for a FREE CONSULTATION.
HOUSING GRANTS FOR BTOs AND RESALE FLATS
There are many housing grants available for homebuyers, but most of them have an income ceiling tied to them. For instance, if you and your spouse have a combined income of more than $8,500 a month, you’re no longer eligible to get any grants if you get a BTO.

Furthermore, resale flats get a CPF housing grant bonus of $50,000 for first-timers applying as a family. If you’re staying within 4km of your parents, that’s another $20,000 in grants.

To use an example, let’s say that you and your fiancee are looking to buy a 4-room flat in Yishun, near your parents. The cheapest BTO in Yishun is $259,000. You earn a total of $8,700 and thus become ineligible for any BTO grants. The final cost remains at $259,000.

Now, let’s look at the resale flats. The lowest resale flat price in Yishun is $289,000. You do not qualify for the Additional Housing Grant since your income ceiling is over $5,000, and there is no Special Housing Grant available for resale flats. However, you can claim $50,000 as a first-timer, and an additional $20,000 since you’re located within 4km of your parents. That lowers the resale flat price down to $219,000.

Here’s a table of the various housing grants available to you, including the household income ceilings.
HDB GRANT CEILING GAP GRANT AMOUNT (BTO) GRANT AMOUNT RESALE)
CPF Housing Grant for Resale Flats (first-timers applying as a family) $12,000 N/A $50,000
Special Housing Grant $8,500 $5,000 to $40,000 N/A
Additional Housing Grant $5,000 $5,000 to $40,000 $5,000 to $40,000
Proximity Housing Grant (live within 4km of parents) - N/A $20,000
Note that the grant amounts vary depending on your household income.
The flat cost is not the only thing that you have to pay for. 
I WANT TO BUY A RESALE FLAT
PROs AND CONs OF RESALE FLATS
The biggest argument for buying a resale flat is the amount you can obtain from grants. If you’re looking for a home and aren’t worried about resale values, then a resale flat may work out better for you.

Adding to that is the fact that older flats tend to have more floor space. Most 4-room BTOs being built today are around 90sqm (968 square feet). Older flats have an average of 104sqm (1,119 square feet). Calculating the price per square feet (PSF) might be a better way to determine the value of your flat. If we reuse the Yishun example, that works out to $267.56 PSF ($259,000 / 968 sqft) for a BTO. The resale flat will end up being $258.26 PSF ($289,000 / 1,119 sqft).

Of course, it can be argued that you’re not just looking to buy the cheapest flat available. The higher end of resale flats can be far more expensive than the costliest BTOs, and grants won’t be enough to make up for it.

Article source: 
https://www.propertyguru.com.sg/singapore-property-resources/property-tips/hdb-resale-flats-are-they-as-unaffordable-as-they-seem-13039

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