7 Factors to consider when deciding between New or Resale HDB properties in Singapore
Have you and your special someone recently decided to take the huge step of buying a place together? Or perhaps you are looking to buy a new home in Singapore for yourself? Whatever your reasons, buying an HDB flat is an exciting move! But before you proceed in your journey, it is important to first decide which housing option would be best for you – a new HDB flat, or an HDB resale flat. Many differences exist between the two options, so if you are wondering how you can possibly decide between them, you have come to the right place!
Because in this article, we will walk you through 7 basic differences between the two main options offered by Singapore’s Housing Development Board, to help you decide which type of property is right for you!
What are New and Resale HDB flats?
In buying new HDB flats, you would be the first owner and occupant of a brand-new home. On the other hand, if you choose an HDB resale flat, you would be buying a home from a previous owner, who would have lived in the flat for several years. While this might seem inconsequential at first sight, the difference in the type of property you buy can significantly influence many factors of your home owning experience.
Factor #1: Eligibility
Arguably, the most important difference between the two types of properties are the eligibility criteria for homeowners. Specifically, only Singaporean citizens are eligible to apply to purchase a new HDB flat, while HDB resale flats are also open to Singapore’s Permanent Residents as well, assuming they also fulfil the requirements of an HDB scheme.
Your income can also make a difference in your eligibility for the two property types. This is because while there is no income ceiling for HDB resale properties, the monthly average of the household’s gross income cannot exceed 21,000 SGD if you apply for the flat with your extended family, and cannot exceed 14,000 SGD otherwise.
Factor #2: Waiting time
One of main benefits of buying an HDB Resale property is the much shorter waiting time. New HDB flats are often built-to-order (BTO), and so after a successful application to purchase a new HDB flat, it is not uncommon for the applicant(s) to have to wait 2 to 4 years before the construction of their flat is completed. For this reason, many have opted to buy HDB resale properties instead, which are already built at the time of purchase. In fact, once you complete a purchase of an HDB resale flat, you can move into your new home almost immediately!
Factor #3: Location
While HDB’s sales launches do include new flats in mature estates from time to time, these are often in short supply. Most new flats released will be located in developing estates. For this reason, if you have your heart set on a coveted town in Singapore, an HDB resale property might be more suitable for you. Because HDB resale properties can be offered in all parts of Singapore, more locations are available.
Factor #4: Lease Period
Of course, new HDB flats also have substantial advantages. Because previous owners of HDB resale flats will have lived in the home for several years, HDB resale flats tend to have fewer years remaining on the 99-year lease. As such, if you are considering buying an HDB resale property, it is important to take note of the number of years remaining on the lease, as this can affect the value of the property over time. For this reason, new HDB flats may be a more worthwhile long-term investment.
Factor #5: Customisation
Another advantage of buying a brand new HDB flat is that you can have the flat built specifically to suit your preferences! Because you would be the first owner of the home, you have the benefit of designing and renovating the space according to your desires. While you can also perform heavy renovations on HDB resale flats, the cost here might be higher if you need to remove structures set in place by previous owners.
Factor #6: Price
Prices of both property types can vary greatly, especially depending on factors such as location, number of years remaining on the lease, and the presence of previous renovations. HDB resale flats’ prices can be negotiated with the previous owner. On the other hand, new HDB flats are subsidised by the government, and because they have the full 99-year lease period, and are often located in non-mature towns, their potential to increase in value is often greater.
Factor #7: Housing Grants
Finally, when buying a new HDB property, it is important to consider the housing grants and loans for which you are eligible, as these can significantly aid you in managing the financial cost incurred by the purchase of a new property. For both property types, you and your family may be eligible for up to 80,000 SGD in a housing grant if you are a first-time buyer of HDB properties. In addition to this, if you opt for the HDB resale option, you may be eligible for an additional Proximity Housing Grant (PHG) if you are buying the flat to live with or near your parents or children. The maximum
PHG amount varies between families and singles, as singles can receive up to 15,000 SGD in a PHG, while families can receive up to 30,000 SGD. Some other housing grants are also only available to buyers of HDB resale properties.
As we break down the differences between a New HDB property and a resale HDB property, do you get a clearer picture of which should be your choice?
if you wish to know more about November 2020 BTO launch, you can CLICK HERE . Are you going to be meeting interior designers for the first time? What should you prepare? What do you need to ask? We got it all covered! CLICK HERE. Are you planning to get a renovation loan for your flat? Here is a USEFUL GUIDE FOR YOU.