Buying Selling HDB Property

Why You Should Buy A HDB Resales As Your…

Why You Should Buy A HDB Resales As Your First Property?

Getting married is one of the major milestones in life. During that process, you have thousand and zillion things to worry and get ready about. Such as

  • Preparation of wedding lunch / dinner
  • Going for photo shoot
  • List of guest to be invited
  • Discussion with both parents on wedding detail
  • Where to go for honeymoon
  • Budget for all expenses
  • and more.. and more… and more…
Buying selling of HDB property

By the way, have you missed out on the most important thing? Where are you going to stay? What option you have? You have either HDB or EC to choose from.

Being a Singapore Citizen, be it both of you or either one. I will strongly recommend you to purchase an HDB flat for the start.

As we are all aware, HDB flats are public housing for all Singapore Citizens. These flats are generally more affordable. In addition, there are CPF housing grants made available for first-time purchasers, in turn making it more attractive.

What are the choices you have under the HDB flat of selection

  • Buying directly from HDB, a BTO (Build To Order) flat. which is NEW
  • Buying from the resales market which age of flat is minimum 5 years

Let’s compare between BTO and Resale

Age of flat

A BTO flat as it is new, the age of flat is very much an infant, whereby we have a long runway of the lease.

As for resale, you potentially be getting a flat that is older than 5 years old.

Amenities

BTO, normally are in the newer estate. In those estates, the amenities and accessibility are not that well established. Not that they don’t have it, just is yet to be completed

I recalled my uncle moved into Tampines when it was newly developed, it has the bare minimum amenities, but look at what it is today!

As for resale, you can pick anywhere within Singapore. In fact, you decide where you want your flat to be. You can prioritize base on the following:-

  • Amenities
  • MRT
  • Mall
  • School
  • etc…

Investment to the property

For BTO flat, you are potentially looking at a lower gross purchase price as compare to resales.

One of the key reason is, HDB do take into account the different location and attributes when setting the selling price of the new flat.

As for resales, seller’s call for the price they want. But that does not mean, they will get it. The flat will still be going at the fair market value, as there is a valuation process involved during the whole purchase process.

Buy Sell your HDB

CPF Housing Grants

Since the above topic is about the gross price of both BTO and resales flat. Let share with you, what are the grant available with both the option.

To ensure affordability, CPF has come out with various grant for both the BTO and resale market

For BTO, you can apply for Enhanced Housing Grant, which amount to a maximum of S$ 80,000 depending on your household income

As for resale, in addition to the Enhanced Housing Grant, you will be eligible for Family Grant, Proximity Housing Grant. All amounting to a maximum of S$ 160,000 depending on your household income

Location

For BTO, the location is kind of limited. It is mainly located in new estates. The new estate is normally not very well developed and accessibility is yet to be as convenient. These will be matured over time

From time to time, HDB does offer blocks of flat in a mature estate. To be able to get it through balloting, it is really like striking TOTO. As they are normally oversubscribed

As for resale flat, you can potentially get a unit in the location you wanted. There is a very high possibility that there will be someone selling their flat in almost all estates.

The choice location gives you the flexibility to stay near your parents. You will able to “tag” onto the convenience. For example, your newborn child can be well taken care of by your parents as grandparents are usually most happy to do so.

Timeline Required

Buying a BTO flat. The procedure is, wait for the release of news from HDB, go for balloting (which is many times. This is an iteration process, not knowing when you will get it). After which, pay and wait.

By the time you see your block of flat above ground, it is easily 2 to 3 years later. When you get the key to you flat. It is potentially 5 years if not longer from the day you have successfully ballot your unit.

As for the purchase of resale flat, even if you are very fussy over the flat that you wanted. I am quite sure you will be able to find something within a year. This made the plan must more predictable.

Renovation

For BTO flats, it comes bear which you will need to put in air con, kitchen cabinet, wardrobe to make it a home.

As for resale, chances are quiet high that you can find something that require minimum renovation.

Therefore, the investment to the renovation for BTO potentially higher as the unit comes bear as compared to resale.

Size of flat

In many situations, the size of flat was being overlooked. This flat size may not be critical during the initial stay, but will turn out to be a limitation over time.

Flats in the resales market tends to be bigger than BTO flats. The difference in sizes of the same model of flat depends on the age of the flat. Example of 4 Room flat have the following sizes

Type of FlatSize of FlatLease Commencement
4A in Tampines107 sq meter1995
4A in Sengkang96 sq meter2010
4A in Sengkang92 sq meter 2015

Future market value

As I shared earlier, BTO are normally in the newer estate and to have an estate totally established over 5 years. This is impossible.

Once you flat reached 5 years, which is the MOP duration. You might be considering selling and upgrading. Your flat can be fetching a higher price than when you buy as the flat is relatively new. This is truth is you are comparing both flats within the same estate. Example, your flat is in Sengkang and you are comparing again those earlier flat in the same estate.

But, if you are buying from the resales market in the mature estate. the numbers can be very different. You might also be fetching a price higher than what you have purchased. In additional, those CPF grants that you have benefited.

More importantly, the interested buyer can be more. The same as, when you first started sourcing for your first flat. This give you a upper hand in selling your property in shorter time.

As in all marketing, any product that is over exposed in the market will directly / indirectly impact the value.

That means, the selling process can be much easier and you are able to have your flat upgraded and better control of your cash flow.

Conclusion

With the above sharing. you will understand, both BTO and resale have their respective Pros and Cons.

To show a simpler breakdown, the benefit of BTO will be

  • Age of Flat – Brand new
  • Lower investment of Property

As for resale flat, the number of benefits, be it tangible or intangible is much higher than what BTO is providing. Some of the key benefits are

  • Amenities
  • Location
  • Timeline
  • Size of flat
  • Future market value

In real estate, we have this saying, which is,

You can do what you want within the flat you own, but you can’t move the MRT to your doorstep. Neither you can move your flat to be on the side of a mall.

For many newly wed couple like yourself, the current HDB flat you are buying, may be temporary . In long run, you might be considering upgrading after staying for 5 years. What is your value of your HDB comes post MOP? What option I have after my MOP? How can I move forward after MOP?

Lewis Tee

Lewis became part of the family of Orange Tee and Tie in 2020. He has been in the real estate since 2005, with him joining, he has brought along with him, was a long history of experience in both HDB and Private property.

His personal belief is, to share the truth and facts with everyone. With that, he has good credibility with all his client

As the world is moving into digital, there are still some “human touch” that must not be missed. Now, let’s ring me at +65 90107188 if you have any queries relating to real estate. I do understand you might be busy. Tap onto the following to WhatsApp me and i will respond to you

Lewis+65 9010 7188Buy and sell property. call us now
Buy Sell rent property Property

6 Steps in Buying HDB Flat

6 Steps Guide to Buying HDB Property

WHAT IS MY AFFORDABLE BUDGET FOR MY HDB FLAT

HDB Resales price
Indicative Price Chat since the year 2000

While you are very keen on getting a property of your own, it is very important for you to know, how much are you willing to pay for your new home. 

This is recommended to be done before sourcing starts. Some of the key payment milestones to consider will be

Deposit to Seller

In purchasing of HDB, some of the payment required during the initial stage will be

Deposit / Option Fee, this normally amounting to not more than SGD 5000.  This amount, paying directly to the owner of the property will be used as part of the sales price.  The amount that will have to be paid in CASH.

Why the deposit/option fee is SGD5,000. Can i pay more or less? The answer to that is,
Nope, you can’t pay more. this is stated in the option document, that the maximum amount for deposit is SGD 5,000. It is also a safeguard, so that, no fake seller trying to run away with large cash amount.
Yes, you can pay lesser, but that is subjected to the agreement of the seller also. Generally, the deposit paid, as it will be part of the purchase price, has no implication to buyer. But, from the seller mindset, it makes a different. The amount seller received, means he / she will stop marketing the flat and waiting for you to exercise the option.

Legal and Stamp Fee

Non sales-related amounts payable consists of stamp duty, legal fees, and other administrative charges. This amount can be paid using your CPF OA account.  Your lawyer or the HDB will assist you in arranging such payment.

Should you required to understand more on the stamp fee. This link to the information will be of great help to you,

Small payment

In addition, there are some payments that is payable, but not directly relating to the agreed price of the purchases.  These are submission fees, valuation fees, etc, which cost less than S$ 1,000 respectively. 

Agent services fee

Lastly, there will be a final payment, after completion of the transaction, is the Agent services fee.  This fee is agreed upon by both parties during the sourcing stage of the property.

This agreed amount does not include the GST element, as GST is a goods and Services Tax that is not received my the salesperson non the agency.

Above are the general guideline and is not limited to only the above items.

What are the housing grants available?

Buying your HDB, what are the grant available

f you are the first-timer applying for HDB Flat, which means, you have never owned an HDB flat ever before, are may be eligible for the Enhanced CPF Housing Grant (EHG).

Of course, there are requirements to fulfill the grant

Household Income Ceiling The average monthly household income over 12 months must not exceed $9,000 before the application of the flat.
Employment Both you and / or your spouse must be working continuously for 12 months before the application of the flat. Either of you must still be working at the time you submitted the flat application
left over Lease of the Flat The flat you are looking to purchase, must have at least 20 years or more left. The flat must have enough lease to cover the youngest buyer of the application up to the age of 95. Should this is not fulfilled, the EHG will be pro-rated.
Ownership/ Interest in Property              Both the applicant must not be holding/owning any other properties. Properties include both local and oversea or you have not any disposal of any such mentioned properties in the last 30 months before the new flat application. Other properties include privatized HUDC flats and EC, shop houses etc… 
Total Grant AmountThe grant amount can go as high as S$ 80,000 depending on the total household income

Size / Type of Flat

Generally, in the open market, there are the following types of HDB Flat available.  Depending on your needs and wants, consider something that makes your stay comfortable.

3-room flat – more for a compact living space that caters well to living needs.

Flat features

  • About 60 meters square
  • 2 bedrooms, of which 1 with attached bathroom
  • Kitchen
  • Living/ dining area
  • Common bathroom
  • Service yard

 4-room flat – is a great place for young couples or young parents. These flats come in a variety of layouts.

Flat features

  • About 90 square meters
  • 3 bedrooms, of which 1 with attached bathroom
  • Living/ dining area
  • Kitchen
  • Common bathroom
  • Service yard
  • Storeroom-cum-apartment shelter

5-room flat – It provided great for larger households of 4 to 5 members, with room enough for extended family.

Flat features

  • About 110 square meters
  • 3 bedrooms, of which 1 with attached bathroom
  • Living/ dining area
  • Kitchen
  • Common bathroom
  • Service yard
  • Storeroom-cum-apartment shelter

Executive flat – good space for families that like to have delegated space. It features an additionals space for a study room that can be easily converted into a cozy living room or TV nook. Some Executive flats also have a balcony space for added alfresco enjoyment.

Flat features

  • About 130 square meters
  • 3 bedrooms available, of which 1 with attached bathroom
  • Living area
  • Dining area
  • Kitchen
  • Common bathroom
  • Storeroom-cum-apartment shelter

Not limited to the above, there are also bigger units such as Jumbo flat and smaller units such as 1- and 2-bedroom units. 

LOCATION

Many times, when you wanted a brand new flat, you will turn to HDB for BTO (Build To Order).  But, you realized, BTO is kind of limited in location.  You may not get near your parent, no near MRT (maybe 10 years after you have stayed in, but immediate may not etc…)

Accessibility is key before buying your property

When you start to look at resales, you realized there is plenty of options available.  Those shortfalls in BTO are overcome.

Before you got too happy over the available option you have, bear in mind, there is a price to pay for those “convenience” . For example, while a $500,000 budget would get you a comfortable 4- or 5-room flat in a suburban estate like Woodlands.  You might be paying as high as $900,000 for the same, sometimes smaller unit

AMENITIES

Although the delivery services have made us more convenient to live further.  But it will still be nice to have eatery or supermarket and ATM nearby.

Other than the basic amenities, you might also like to have something that closes to your lifestyle such as stadium, swimming pool.  Other than, dragging yourself to the fitness center for a workout.

Other than getting close to what you want, transportation is also another key consideration.  That will be the distance to MRT / Bus Interchanges. 

I have a client, which felt some 20 mins walk to MRT is fine, as it is quieter, and the price is lower.  Never he realized, after 6 months, he felt walking to MRT can be a tiring task and he now and public buses will loop him around before reaching the station.  The situation got worst during raining days

After years of staying and you have upgraded to a private apartment.  You may not want to sell your current HDB, but to put if for rental.  The amenities, such as MRT, schools, hawker centers, supermarkets, shopping mall can be for your target demographic. This means identifying beforehand what the tenants likely wanted.  For example, single expatriates or students will need access to MRT as compare to those with the family that is more likely to drive.  This will work out better for them and increase your rentability.

WHAT IS MY AFFORDABLE RENOVATION BUDGET

There will be renovation work required, in many if not most of the buyer, after buying the flat.  The amount of renovation effort depends on the condition of the flat you purchased.

Selling your property with newly renovated seller.

Even so, that you decided to purchase and stay on as it is, do take note, the flat is sold base on caveat emptor.  This means it is the buyer’s responsibility to check and ensure the quality and suitability of the flat.  Any defect after the handover is fully the buyer’s responsibility.  

With the above consideration, the scale of renovation work required will directly impact the investment.  This cost can be from tenths of thousand to over hundred thousand. 

There are loans available for the purpose of renovation, but that repayment is via cash and it should be taken into consideration before committing the purchase.

I had a client, which bought a relatively well done up unit, but they have decided to redo the electrical cabling and water piping work.  Never he realized, the work affecting the wall and more work needs to be done at the end and cost has gone up by an additional 30% from what he has budgeted for.

Lewis of Orange Tee and Tie
Ring me at +65 90107188

Lewis became part of the family of Orange Tee and Tie in 2020. He has been in the real estate since 2005, with him joining, he has brought along with him, was a long history of experience in both HDB and Private property.

His personal belief is, to share the truth and facts with everyone. With that, he has good credibility with all his client

As the world is moving into digital, there are still some “human touch” that must not be missed. Now, let’s ring me at +65 90107188 if you have any queries relating to real estate. I do understand you might be busy. Tap onto the following to WhatsApp me and i will respond to you