Owning Property in Singapore : BTO or resale HDB

Updated: January 1, 2018 / Home » English Article

Singapore has one of the most vibrant property markets in the world. Like all vibrant markets, it has developed rapidly over time to offer the different market players diverse options when it comes to investing in the property market.

A key player in the homeowner’s segment of the market, the HDB, has over the years played a critical role in ensuring that the aspiring homeowners can purchase flats at affordable prices thanks to their BTO option. However, they are also those individuals who are offloading their previously owned flats into the property market bringing about the alternative option of the resale HDB.

Now, the begging question has always been – which is the best option for people looking to own homes; the BTO or the resale HDB option? Let’s take a look at some of the advantages and drawbacks of either option before we arrive at a conclusion.

An Overview of Some of the Benefits of BTO flats

1. The Flats Come with Much Better designs

The technology that is used to build flats is changing every day and that can only mean that the flats built recently are far much more superior design-wise than those built earlier. And that is one of the advantages that a BTO flat has over a resale HDB. So if you go with the BTO option, you can expect to experience much better and modern layouts of the house you purchase which will be most probably befitting to your preferences.

2. They are Cheaper to Renovate

The amount of wear and tear on resale housing can be very significant since you can never tell how the previous owner used to handle the flat. In the long term, that could mean that you will end up spending more on renovating the flat for the wear and tear on it or even when remodelling it to fit your preferences. However, with the BTO, you get to choose a house that fits your preference and you are going to be its first owner. Since the materials used in the flat are also modern then the cost of renovation will also be very low as you will not need to spend that much on renovation, as similar materials are readily available.

3. Enjoy a Much Longer Lease On Your Flat

If you look at your flat as a long-term investment then you are probably better off having a much longer lease on it. The BTO flats currently enjoy a lease of up to 99 years that is a good time period in which to hold an asset. If you woke up today and decided that you are going to sell the flat you will have much more bargaining power. And this makes the flat a great investment that will also offer an assurance of a home to your family even when you are long gone.

4. Take Advantage of The Housing Subsidized house Cost and Grants

If you are a first time homeowner looking for a BTO deal you will get to purchase your flat at a subsidized rate. Now, HDB is also going to extend to you a generous housing grant that depends on factors like the flat size, your employment status and whether you are within the income ceiling of up to $5,000. For those who qualify, they will get to enjoy combined grants of AHG and SHG of up to $ 80,000. Now that is a very significant amount of savings for a young couple or individuals who are just thinking about settling down. It is no doubt a huge amount of saving on the housing cost that they can re-invest into other assets to boost their income levels by a great margin.

An Overview of the disadvantages associated with BTO flats.

  • The houses you settle on might necessarily not be in the best locations so you might not be able to have easy access to important amenities.
  • The flats are being constructed in a time when the land has become very scarce so you will most probably purchase a house that is very much squeezed in terms of space.
  • You only get to view the flat once it is completed, otherwise, in the mean time you will pay for a flat that is still a concept on paper and you have to wait for an average of 3 years before actually seeing the completed house.
  • They are quite costly since they offer less for the same price of resale HDB all factors held constant.
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An Overview of Some of the Benefits of Resale HDB flats

1. You Get To Choose A Better Location

The location of a flat is a very important factor to consider while purchasing one. Now, most resale HDB flats constructed a while back were located in prime areas which have several advantages over the BTO flats. First, if you are lucky to get a good location you will benefit from prime access to better views and amenities like schools, water and vital infrastructure like roads. The long-term benefits of this are that your family will get to have a better quality of life.

2. Space is Much Bigger

Resale HDB flats that were built 20 years ago come with the advantage of space since they were built when the availability of land was not an issue. A much bigger space in a flat is preferable any day than a flat that is squeezed because it will go a long way in securing your personal comfort. For instance, most resale flats come with much bigger rooms which you can keep bigger beds in and even remodel to add features like wardrobes which are not a luxury you can enjoy with a smaller flat. They also have features like balconies that you can use to get fresh air or just relax from and enjoy the views that come with your flat.

3. View and Purchase the flat immediately

Since you get to purchase a resale flat from an already existing owner you can purchase the home immediately you settle on the one that you want. This is very crucial especially if you are a young couple who is looking to settle down immediately. You will not have this luxury if you are going to consider a BTO which normally takes around an average of 3 years waiting time before you can get your house ready. And all this time the idea of you have of your house will be a concept. The question is what will you be doing during the waiting period? You will be limited to the option of living with your parents, renting out a flat or waiting till your house is finalized to get married. All these options come with cost implications and the inconvenience of interference with your personal space.

4. The Price Factor

On a comparison basis especially if you are a private resident who does not qualify for the housing grants, the BTO’s are quite expensive if you make the comparison on the basis of what you pay for vis-a-vis what you get. For instance, if you consider advantages like space and location that comes with most resale HDB then the price you pay for them is much smaller compared to BTO’S. You actually get more for less and a life that is much more quality.

An Overview of the disadvantages associated with resale HDB

  • The flats were built a long time ago and so they do not come with modern designs that are much more appealing.
  • The wear and tear on the house are quite significant and that means the cost you will spend on renovating the houses over time. will be very high.
  • Most of these houses were constructed a long time ago and so the lease on them is very shorter when compared to BTO flats which are recently built.
  • Since they are old they do not enjoy any subsidies from the HDB which would significantly reduce the amount spent on purchasing the houses.


Now the answer to the question on which of these two home purchase options is the best will depend entirely on two factors; whether one is a Singapore resident or a permanent resident. This is because these two groups have very diverse needs and limitations.

For instance, it is highly recommended for a young Singapore couple with modern tastes to go for the BTO flats option since they have the opportunity to own a flat at a much lower cost given the subsidies and grants. On the other hand, a Permanent Resident who does not qualify for these grants and subsidies is better off purchasing their flat through the resale BTO flats option since they have the opportunity to get more value for their money.

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