BTO vs Resale Flat: Understanding The Differences
One of the most commonly discussed and controversial topic that would cross many young couple’s mind; “to go for a BTO or resale flat?” Many of you might have heard friends and families debating this issue as and when a couple were to tie the knots, or even wrangling the pros and cons of a BTO to that of a resale. There is no right or wrong if you were to be leaning towards either sides as end of the day, it is a home that you go back to, hence it should be carefully purchased.
As the name suggests, are flats that can are being built by our government and sold to us. BTOs are specifically catered to first time homeowners as they take their first step into the next phase of their lives. Supplied by the government, they are the most common flat type any Singaporeans can get off the property market at the lowest entry price possible. That being said, since this property type is of the lowest entry price, it will always be high in demand. Prices would vary depending on the location and demand for the more popular developments.
Right after BTOs the next most common flat type would be resale flats. Resale flats, as the name also suggests being quite self-explanatory, is to purchase an existing HDB flat from another owner. Resale flats can be bought off the market and certain factors such as location, per square feet, or even the level of convenience can affect the selling price. Resale property prices are being set by the law of supply and demand, if a district is not that popular, you would not be able to command a higher than market valuation for your property.
There are bound to be differences between flat types and here are some of them, in no specific order or biasness, which we feel is important for homeowners, to understand the differences, consequently, leading to better clarity when it comes to their decision making.
PROS OF BTO
LOCATION – BTOs are being built at strategic locations to enable the convenience of homeowners where they tend to have facilities or amenities such as gyms, shopping malls, parks, public transports e.g. MRT stations/bus stops etc.
PRICE – The purchasing price of a BTO is the cheapest when it comes to purchasing any property in Singapore in mint condition as compared to buying a resale flat, a condominium or any private property out there.
DESIGN – When it comes to the design of BTOs would replicate most condominium designs in terms of structure and the exterior look and feel. Fresh coats of paint with new architecture perspective will be integrated to these new BTO projects, making them eco-friendly and appealing to the younger couples.
CONDITION – The condition of the BTO is always NEW and it comes with a 99-year leasehold time frame, ready for homeowners to spearhead and design their own dream homes. Though engaging an interior designer would involve costs.
CONS OF BTO
DESIGN – When it comes to the design of a new BTO, you do not get a ready made property unless you are going for a DBSS (Design, build and sell scheme) where the interior design of the flat has already been done up by the developers. Starting from scratch would mean costs involved. For couples who love to have full control over their dream homes, from tiles to walls, and even paint colour or how their kitchen and toilets should look like, a BTO would make more sense to them.
SPACE – As compared to a resale flat, most BTOs these days are smaller in square feet when pitted against the older resale units.
LOCATION – Most BTO flats are being built in non-mature locations where couples would have to re-adapt to a new environment, get used to taking different buses or getting on different MRT trains to get to work. Time taken would be affected depending on the location of the BTO.
PRICE – Since each and every BTO unit is brand new in mint condition, the downside is that the prices are non-negotiable.
TIME – There would be time involved unless you are buying leftover units from previous BTO projects. Upon application of certain BTO developments, couples could wait up to several years before completion of the property.
DISTANCE – Distance taken to travel home, to visit families or relatives could potentially pose as a challenge for most couples as there would be a chance of them not living near their families.
PROS OF RESALE
DESIGN – If you are happy with the current interior design of the existing homeowner, there is totally no need to spend extra money for any renovation work at all.
SPACE – When it comes to space, the older HDB units would definitely be more spacious no matter if it is the kitchen, living room, individual rooms,
PRICE – Prices for resale flats are negotiable as you are taking over from another existing homeowner.
TIME – Minimal time is needed as once both buyer and seller has come to a mutual consensus, preparations can be fixed to move in right away.
LOCATION – Most resale flats would already have established facilities, shopping centres, mini marts around them to ease your daily needs.
PROXIMITY GRANTS – If you are living within the proximity range of your parents, you are eligible to apply proximity grants from the government to help aid the financing of your resale flat.
CONS OF RESALE
PROCESS – There may be a complicated process or additional steps needed where third parties such as property agents and lawyers are needed to be involved.
PERIOD OF LEASE – The period of the lease will not be reversible to a 99-year lease, and you will be taking over from where the existing owner left off.
TIME – Homeowners may take more time than needed as most public housing are HDBs and there are simply just too many units to available to view.
LOCATION – Location may be matured, with facilities such as lifts that are not renovated on time or the exterior building may look “old”.
PRICE – Prices are higher as compared to BTOs as depending on factors such as location, convenience, and any added features, or due to simple supply and demand. If you are not careful, you may end up paying an exorbitant price for a resale flat that is not left with many years.
The takeaway that all potential home buyers should have in mind with all factors considered is to know that this is a long-term commitment. It does not matter which flat type you are going for as either flats would easy costs you over a hundred thousand singapore dollars! After all grants and subsidies deducted, there is still a huge substantial amount to commit to. Hence, having a stable full time job is crucial, and couples should always take into serious consideration if they prefer to compromise between a more comfortable repayment or location. The ideal situation is to have a more comfortable repayment scheme, followed by the location of the development.
To each his own, end of the day everyone have their own unique perspectives when it comes to BTO or Resale. Prioritizing different aspects to be more important than the other. However, you should always make your decisions based on your current living conditions realistically.