Buying HDB – Resale Flats in Singapore

Prospective homeowners looking to purchase an HDB flat are faced with two choices; to buy a new, built-to-order (BTO) flat or to buy a resale flat from a third-party seller.

At this juncture, the knee-jerk reaction is typically to apply for a BTO, especially if you happen to qualify for one of the government’s many priority schemes.

However, a resale flat is an equally viable alternative. As we’ll lay out here today, there’s no reason why you should shy away from buying resale.

What are Your Options?

New BTO flats are purchased directly from the Housing Development Board (HDB), typically at a subsidised price depending on the buyer’s status. These flats tend to be located in non-mature estates, where development has yet to take place. To buy a new BTO, applicants need to wait for the launch of a periodic sale before applying directly to the HDB.

In contrast, resale flats can be bought on the open market at any time, depending on their availability, and may be located all over Singapore.

The price of a resale flat varies and can be negotiated between you and the seller. Resale flats have the added advantage of being able to move in immediately after purchase.

Some resale flays may also come already furnished, in contrast to BTOs which present a fresh start.

What You Need to Know About HDB Resale Flats

A prevailing misconception surrounding resale flats is that they are “old” or “second-hand” flats, and as a result are not in great condition.

Due to this belief, resale flats are generally thought to be a poorer option compared to a BTO flat built especially for you. But that’s not necessarily true! There are tonnes of reasons why a resale flat could exceed a BTO.

For starters, the waiting time for a resale flat is much shorter than that of a BTO; where one might need to wait for almost two years for their BTO apartment to be built, the process of acquiring a resale flat takes only two to three months. Moreover, opting for a resale flat opens up the range of possibilities available to you.

Without being constrained by the limits of a BTO, you have the freedom to choose from apartments all over Singapore. If you have your heart set on finding an apartment near your workplace or a particularly prestigious school, then a resale flat could be the home for you! A resale flat could also prove to give more value-for-money where space is concerned, particularly where HDB flats in older estates are concerned.

Given Singapore’s ever-looming land constraints, new BTO flats are becoming increasingly compact. While this is helpful for making full
use of existing living space, it’s not so ideal if you’re planning to have a large family. Of course, if you’re really worried, then you can always arrange a visit with the seller to put your fears to rest.

This also gives you the chance to check out the neighbourhood while you’re there. Keep an eye out for the amenities nearby before you decide if this is the neighbourhood you want to settle down in!

What facilities are nearby?

If you have children, is this is neighbourhood you’d want them to grow up in?

Be it little things like hawker centres and food courts, or ease of access to public transportation, you want to make sure that you’re getting the best option available on the market.

After all, one of the perks of buying resale is the greater flexibility, right?

Is there a resale flat you have your eye on?

Remember to check the lease before you finalise the purchase! If there aren’t too many years left on it, then you might want to reconsider. Imagine moving into your new flat and then having to move out a short twenty years later because your lease is up!

The HDB Buying Process

So you’ve decided to buy an HDB resale flat. Do you know comes next?

The HDB buying process was streamlined in 2018 with the introduction of the HDB Resale Portal, which is accessed using your Singpass credentials. Buyers need to register their Intent to Buy using this portal, following which they will be able to view their eligibility to buy the flat, as well as the housing grants and loans that might be available to them.

The Intent to Buy allows the HDB to assess your eligibility to purchase an HDB resale flat. Buyers do not need to pay a registration fee, and they will receive the results of their assessment immediately. Each Intent to Buy is valid for 12 months; if you do not submit your resale application during that time period, you will need to reapply for another Intent to Buy.

An overview of the buying process can be found below. Assuming that all the required documents are submitted and processed promptly, this process takes about eight weeks. That’s almost one-twelfth the time it takes for a BTO flat to be built!

Image Source: HDB

Are You Eligible?

Before you even consider buying a resale flat, first you need to check if you are eligible to do so. The HDB has several eligibility schemes whose conditions must be met in order for you to buy an HDB resale flat. In addition to other conditions, the flat application generally also needs to include at least one Singapore citizen or two Permanent Residents.

Other eligibility conditions are as follows:

1) Ownership/interest in HDB flats:
If you, or any other applicants, own an HDB flat, you must dispose of it within six months of purchasing the resale flat.

2) Ownership/interest in non-HDB property in Singapore and overseas:
If you, or any other applicants, own a private property either locally or overseas, you must dispose of them before or within six months of purchasing the resale flat. Ownership of private property also disqualifies you from the CPF Housing Grant and HDB housing loan.

Other conditions, such as citizenship, age, family nucleus, and adherence to government housing policies, may vary across the different eligibility schemes. While there is no hard income requirement for buying an HDB resale flat, certain housing grants and loans may have income ceilings.

How can a Real Estate Agent Help?

If you’re on the lookout for an HDB resale flat, consider enlisting the services of a real estate agent.

Real estate agents are a veritable font of knowledge which might not be easily found online, ranging from how external factors might affect the house you have your eye on to the type of neighbours you will be living with.

If you don’t know where to start, a real estate agent can act as a springboard for you to kickstart your search. Not only will they assist you in your search, they can also help you with your paperwork and act as middlemen who will liaise with sellers on your behalf.

Moreover, an experienced real estate agent may also have access to industry tools and know-how that the average lay-person would not. If you’re inexperienced or short of time, tapping on the experience and industry know-how of a real estate agent might not be such a bad idea.

Conclusion

For many future homeowners, a resale flat might be the answer to your needs.

Resale flats have many strengths that make them viable contenders when pit against BTOs. The added flexibility of being able to evaluate and choose your new neighbourhood is a boon, as is the shorter waiting time for acquisition. If you’re pressed for time or looking to move into a specific neighbourhood, why not try out a resale flat
instead?

You never know what hidden gems might be waiting for you to discover them.