HDB Built-to-Order (BTO) flats are brand new HDB flats that are yet to be built. HDB sell BTO flats directly without involving middle-man i.e. real estate agent. HDB collect bookings of between 65-70% before proceeding with the construction that usually takes between 3-4 years to complete except when there is construction delay during the Covid-19 pandemic due to shortage of construction workers.

Resale flats are second-hand HDB flats that are already owned by someone else. There is a market for resale flats, and you can search them in all HDB estates in Singapore.  

What are the differences between BTO and Resale Flats?

Eligibility Criteria

First of all, in order to be eligible to purchase a BTO flat, one person applying needs to be a Singapore Citizen (SC), and the other person can either be an SC or a Singapore Permanent Resident (SPR). The income ceiling for single or combined household income is $7,000 or $14,000 respectively. It means that if you are earning more than the ceiling, you are not eligible. Any of the purchaser also must not own other property overseas or locally, and have not disposed of any within the last 30 months.

For resale properties, a couple with residency status of Singapore Permanent Residents are eligible provided the two of them have obtained their PR status for at least 3 years, and there is also a scheme for Singapore Citizen with foreign spouse, and a single scheme for Singaporean age 35 years and above. There is no income ceiling requirement for buying an HDB resale flat. However if you intend to receive grants from CPF and/or to take loan from HDB, there is income ceilings.

The official HDB portal offers more details about the eligibility criteria for various schemes.

Waiting Time

With BTO flats, you have to wait for the construction between 2-3 years whereas with resale flats you can move in within a few weeks after paying for down payment. So if you are going for BTO flats, you need to plan your temporary housing, either live-in with parents or move into rental property.

Choice of Location

With BTO flats, locations of the flat depend fully on HDB launch sites at that point in time. Generally, launch sites of BTO flats are in the less mature estates as lands are very limited in mature estates. If there is any available, more often than not it will be heavily oversubscribed i.e. number of ballot many times over number of supply available. Whereas with resale flats in the market, you have the entire HDB estate in Singapore to choose from.  

Value for Money

BTO flats are offered at subsidised rate whereas resale flats buyers take advantage of the various CPF Housing Grant schemes available depending on income level of purchaser(s). With BTO flats, you will get the price quoted, while with resale you need to negotiate with resale flat sellers, and afterwards apply for all the CPF Housing Grants that purchaser(s) is/are eligible for, depending on income level and proximity to parent’s or child’s house.

Another important factor to consider beside price is the balance lease of the flats. BTO flats come with fresh 99-year leasehold whereas resale flats come with various balance lease that is older than BTO flats e.g. 90 years or 80 years balance lease.

Between the subsidised rate for BTO flats and after-CPF Housing Grant for resale flats, which is more value for your dollars?

I would like give an illustration in assessing a 5R BTO and resale flat in Sengkang. Assuming BTO flat price offer price of $380,000. Resale flat price $500,000 with balance lease of 90 years and purchasers qualify for CPF Housing Grant of $80,000. Here you think of your HDB flats, either BTO or Resale, as rented apartments and calculate how much you’re paying per month for rent.

A 5R BTO flat in Sengkang was offered from S$365,000 while resale flat market rates ranging from $480,000 - $600,000. 

BTO flat 99-year leasehold balance = $380,000/99 years/12months = ~$320/month

Resale Flat 90-year leasehold balance = $500,000 – CPF Housing Grant $80,000 (assumed) / 90 years = ~$389/month

In general, BTO flats are more value for money compared to resale flat.

Size of Flat

Resale flats are generally bigger than BTO flats in the same category.

Renovation

Think of a BTO flat as a blank canvas. It comes in a default form, with no faults or damages to rectify and only fittings to dress on your brand new house. With resale flats, renovation works tend to be more expensive due to extensive hacking and rebuilding of existing features within the flat that a new house owner may not want. According to a cost guide from Qanvast, average renovation spending for HDB resale flat is $67,000 as compared to $44,000 for a BTO flat.

Conclusion

If you are eligible for BTO flats, have no issue waiting for 2-3 years until it is completed, and there is available location of your choice, you shall go for it without hesitation. It is more value for money, and at the end of the day you get a brand new house.

At Pinnacle Estate Agency, we strongly believe in sharing our real estate knowledge to the public.⁠ For more content like this article, check out our Singapore Property Guides.