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Built-To-Order (BTO) Flats Versus Resale Flats

Updated: May 12, 2020

This is one question that always lingers in the minds of people who are looking to purchase a HDB flat. In the past, resale flats have always been more popular amongst buyers but that trend has seemed to slowly dwindle off, especially with the newer BTO flats having a more modern condominium layout and also very beautiful exterior. So let us walk you through on the pros and cons of both the BTO flats and the resale flats so that you can better make your choice.

First thing that we need to look at will be the Citizenship. For buyers who wishes to apply for BTO, at least one of the owners will need to be a Singapore Citizen. For resale flats, the owners can be a full Singapore Permanent Resident (SPR) household. Both types of houses will have a 5 year Minimum Occupation Period (MOP) from the date of ownership and within this MOP, the owners and essential occupiers will not be allowed to own any other residential properties both local or overseas.

Another very important thing to note will be Income Cap. For BTOs, there is an income cap of $14,000 for the household income. Household income means the income of everyone staying in the house, even if they are occupiers and not owners. There is no income cap for purchasing of resale flats and that is a very big attractive point for buyers who are holding high-paying jobs.

Next will be property ownership. For anyone who have just sold off or disposed off their private residential property, they will not be eligible to apply for a BTO flat immediately. There is a time bar of 30 months to wait out before they can apply for a BTO flat. There is no such restriction for the resale segment so if you are someone looking to shift from a private residential to HDB, then the resale flat is your only choice.

Now comes the factor which made resale flats the more popular choice in the past and that is Location. Commonly for resale flats, you literally have a choice on the location especially if you are looking at more prime areas which are also older and more matured estates. There are also BTO launches in matured estates but the number of flats will be limited. And usually such launches will also be terribly over-subscribed. Majority of the BTO flats are in the newer non-matured estates and people used to shun such launches. As mentioned from the start of the write-up, people are more receptive to BTO launches nowadays and one big reason is because of our transportation infrastructure. With the introduction of the many MRT stations and also LRT stations all over Singapore, it is no longer that difficult to travel to any part of the country nowadays. Coupled with the fact that the newer houses have more modern condominium styled layouts which appeals to a lot of younger buyers.

Another thing that many buyers often miss out is, is what you buy really what you want? For BTO flats, we are often buying the unit based on floor plans and site maps. From these 2 items, we will not be able to deduce whether is the house bright and breezy? What is the exact view that you see everyday from your window. For resale houses, what you see is what you get. You can see exactly how the house is like, whether is it bright and whether the wind flow is good. You will also see what are the views that are outside your house. Most importantly, you can also feel the house, whether are you comfortable staying in the house.

Price will be something that we can never neglect when making the choice between BTO and resale. For BTO flats, it is heavily subsidized by the government and hence the price is always lower the its counterparts in the resale market. There are many times when we tell buyers that the best house is the house that you stay in without stress.

This article does not aim to sway your decision to either side of the pendulum. It really serves to highlight the pros and cons of both BTO and resale flats. Different buyers will have different thoughts and requirements that affects their choices. If you still have any questions or feeling unsure, please feel free to contact us and we will gladly have a non-obligatory discussion with you.

<Woman photo created by drobotdean>

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