The Singaporean First Time Home Owner’s Dilemma: HDB Build-To-Order or A HDB Flat?

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In Singapore the Housing & Development Board (HDB) is the largest developer of public housing. High rise apartments or better known to Singaporeans as HDB Flats is home to more of 80% of people in Singapore.

Each Singaporean couple is given two opportunities to purchase subsidized flats directly from HDB. These new flats are known as Build-To-Order Flats or HDB BTOs.

For first timers eager to start a new life without their parents, there’s always the dilemma of choosing between purchasing a new Built-To-Order (BTO) flat from HDB or a resale flat from the open market.

Until recently, resale flats in the open market have been out of reach for most first time buyers, with Cash Over Valuations (COVs) – the premium paid in cash above and beyond the flat’s valuation price- going for an average of $30 000 to highs of $100 000. Unless these young couples have been saving for years, it is unlikely that they have that much cash to fork out, especially if you factor in the wedding and other miscellaneous expenses.

At the same time, getting settled into your own home as a new couple can be one of the most important first steps in your life. Living together without intervention or comments from either side of the family helps you and your spouse slowly negotiate and build a life together peacefully.

If you are one of those undecided whether you should be purchasing a HDB BTO or a HDB Resale Flat, these are a few facts about both types of housing that you should consider.

How long you need to wait before you get possession of the new home

HDB BTO: This is the current disadvantage about HDB BTOs, i.e. the waiting time range between 2- 4 years depending on the development in question.

HDB RESALE: Once you decide on a flat, it would take about 3 months for you to get possession of it.


HDB BTO: While waiting for your flat to be built, young couples usually live with either set of parents which means a lack of privacy. In addition there is the added pressure of having to meet the expectations of the In-laws. Not a good thing when you are already trying to adapt to a new environment.

HDB RESALE: The privacy that comes with living in your own home, especially with an en suite bathroom is usually priceless.

Flat Sizes

HDB BTO: New Flats are usually smaller in size.

HDB RESALE: Resale flats are usually larger than new flats.

Ideal Position and Size

HDB BTO: Buying a BTO can be similar to buying an item online. You see it virtually, place an order and wait for a while for it to arrive. Unfortunately, there is no returns if you do not like all aspects of the flat.

HDB RESALE: When buying a resale flat, you would only purchase one that you are entirely happy with. This includes being happy with the size, the location and the position of the flat i.e. you know where the flat is facing, you know the direction of the wind etc.


HDB BTO: A HDB BTO is usually cheaper than existing Resale flats. However, if you do not purchase the flats at the initial launch, i.e. you later purchase them at the SBF (Sale of Balance Flat Exercise), the price may have risen substantially to be on par with market value. BTO or DBSS or any flats that are purchased directly are considered sold at subsidized prices and are not eligible for HDB Grants.

HDB RESALE: Resale Flats prices are pegged to market value, the condition that the flat is in, the proximity to amenities etc. This usually increases the price substantially. For first time buyers, HDB provides a grant of $30 000 – $40 000 or more depending on your household income.

Renovation Costs

HDB BTO: New BTO flats come unfurnished and you would have to spend money on renovation. However, as they do not have existing tiles, cabinets etc, you can save substantially on the cost of hacking. You also have a clean canvas to create your dream house in.

Another plus point for new couples is that buying a deferred flat allows you to save up for renovation instead of going for renovation loans and having to pay additional interest.

HDB RESALE: With regards to Renovation Costs, you can go either way, i.e.

A) You can either purchase a flat with existing renovations and save substantial costs, time and effort or

B) You would need to spend substantially more on hacking, tearing down the existing renovation to create your dream home.

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


HDB BTO: New flats, unless they are built in mature estates, rarely come with amenities around the corner.

HDB RESALE: Mature housing estates come with convenient amenities usually just around the corner.

Given the above details, there isn’t a definite answer on whether you should buy a HDB BTO or a resale flat. It all depends on the choices and preference of each couple and their comfort level with purchasing an asset that you will be paying for a substantial period in your life.

Source by Siti Zubeidah Binte Kadir

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