BTO vs Resale: Which should you go for?

How do you decide which is the best choice for you?

BTO or Resale? That is the first question that couples ask when they are deciding to buy a house. For those who think that there is a straightforward, easy answer, unfortunately, there isn’t. Both types of properties come with its own advantages and disadvantages. It is important that buyers focus on their long-term goals before deciding between the two.

Things to consider

  1. Urgency to move into a home
  2. What do you want your next property to be?

Let’s dive deeper into the top 3 differences –

  1. Waiting period

Both BTOs and resale flats require some waiting time – it takes about 2 to 3 months for you to move in to a resale flat compared to the 4 years it might take to move in to a BTO flat. Since the BTO flats are yet to be built, it requires the couple to do some advanced planning. With a resale flat, you can move in almost immediately after settling the process of buying the house.

“Always think of your next property before purchasing your current one.” – Mr. Ken Seah, Property Agent, PropNex.

The pinch of the long waiting time will be felt when you want to move to your next property. If you intend to sell your property and upgrade to a better one in the near future, you have to take note of the total waiting period. For a BTO, your waiting period plus the Minimum Occupation Period (MOP) can easily be about 9 to 10 years however, for a resale flat, it is only the MOP which is 5 years.

  1. Location

One major difference is that you do not get to pick your location for BTO flats and the trend over the years has shown us that BTOs are rarely launched at the best places since private developers have already taken the “good” areas. Be sure to check the BTO locations. Resale flats however, provides you the flexibility to choose your location. If you choose a place close to your parents, you can apply for the Proximity Housing Grant as well.

Again, as Mr. Seah advises, you ought to ask yourself: What is your next property? Do you intend to rent your current house in the future?

If you intend to rent, you need to think about the location as a property in a non-matured estate will have a higher vacancy rate compared to one in a location with plenty of amenities close by. If you intend to stay longer in your flat and sell it at a later stage, BTOs might work for that. The government is committed to developing every part of the island and sooner or later, the spot that appears less mature will flourish in a matter of years to a beautiful place.

  1. Grants

There are a few grants that you can take advantage of when buying a house as first-timers. Most of the grants have conditions and you have to check if you’re eligible for the grants.

Prices of resale houses can be found on the HDB website.

No doubt resale and BTO HDBs come with their own set of pros and cons. Before deciding, identify the important factors when considering a house – is it accessibility to public transport, proximity to family, or do you intend to live there for long or sell and monetise it after a few years? It’s best to meet with a property agent to analyse your needs and figure out your best options. A little tip: usually the property agents know tonnes of loop holes to navigate around the rules to get the best deal for your houses.

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