HDB BTO or resale? Pros and cons to consider for first-time buyers
Ready to settle down soon? If so, you and your partner may be on the lookout for your ideal HDB flat!
While we all hope to live in the home of our dreams, this may look different to different people. For example, if one couple wants to live near their parents, perhaps a resale would be more suitable as they’d be able to choose from any location in Singapore.
Another pair may think it’s more important to keep within a specific budget — BTO may just be it for them, as it is subsidised by the Government.
The key is to find one that best suits your wants and needs!
Finding the right home can be stressful, but to help you narrow down your search, we’ve gathered the things you should consider when choosing between a BTO and resale flat.
Location
Each BTO launch typically features units in 4 to 5 housing estates. For instance, the upcoming May 2023 launch features estates in the Bedok, Kallang/Whampoa, Serangoon and Tengah neighbourhoods. These estates may also be further broken down into two categories: mature and non-mature estates, with the former usually being pricier.
If you’re not particular about your location, consider picking a non-mature BTO flat to leverage the subsidised price. Fret not about the lack of amenities in non-mature estates — even newer towns like Punggol and Sengkang have rapidly grown to be chockfull of malls, parks, and schools.
For resale flats, you can purchase one from any location in Singapore. This would be ideal if you need to live in a specific location. For example, near a good primary school for your future kids, or close to an MRT line that goes to your workplace or your parents’ home.
Size and layout
Even with the same number of rooms, a BTO flat is generally smaller than a resale flat. This could be an important point to consider if you plan to have children, or if you simply prefer having more space at home.
However, having a smaller home is not necessarily a bad thing — it could help motivate you to minimise clutter and think twice before spending on things, and makes it easier to clean to boot!
The layout of your home may also differ between a BTO and a resale. A typical BTO flat layout today has the living and dining area next to the kitchen, with a small hallway separating the bedrooms. The bathrooms are closer to the bedrooms instead of being in the kitchen. This may be preferable if you want separation between the different areas in your home.
Older resale flats tend to have a large open living and dining area, with the kitchen and bedrooms around it — ideal if you prefer a communal feeling.
You may also have more unique layout options to choose from when it comes to older resale flats. For example, maisonnettes have two levels, executive apartments are larger and shophouses may have unusual layouts, which give your home character.
Lease
Being brand new, a BTO flat would have a 99-year lease. This means you can probably live there for your entire life and so can your children.
If you choose a flat in a mature estate, it’s possible that the remaining lease is less than 60 years. This means that you may outlive your lease. This will make it harder for you to take out the necessary loan, and you may have to fork more cash upfront.
Renovation costs
With BTO flats being new and hence a blank slate, the renovation costs will definitely be lower than that of a resale flat. Not to mention, some of the costlier expenses in a renovation are hacking and disposal of built-in furniture and replacement of tiles — these are non-issues with a BTO flat.
For resale flats, depending on how the previous homeowners designed and maintained their home, the renovation work could be extensive.
For instance, if their bathroom tiles are old and worn, you’d have to replace them, which costs a substantial amount.If they have clogged pipes or leaking air-con trunking, you may have to fork out more plumbing fees. However, to receive the most accurate advice based on your situation, it’s best to speak to a skilled interior designer!
Protecting your home
Whether you choose a BTO or resale, it’s important to protect your home. For starters, the Home Protection Scheme (HPS) is a mortgage-reducing insurance that protects you and your loved ones from losing your HDB flat in the event of death, terminal illness, or total permanent disability. If you’re using your CPF savings to pay your mortgage, it’s mandatory to be insured under HPS.
Similarly, if you are using an HDB loan, it is mandatory to buy and renew HDB fire insurance, which covers the cost of reinstating damaged internal structures, fixtures, as well as areas built and provided by HDB. However, it does not include home contents such as furniture, renovations and personal belongings.
To better protect your home with more comprehensive coverage, MSIG Enhanced HomePlus® fills in the gap. For instance, it provides up to $270,000 coverage for renovations, movable household items, household contents and personal belongings. Additional coverage also includes accidental breakage of mirrors and glass at home deterioration of frozen food, and more.
Find out how to keep your home safer with MSIG Enhanced HomePlus®
*Cover and limits based on Ultimate Plan.
