In the recent BTO launch in February, a total of 4,056 Build-To-Order (BTO) flats were launched in Punggol, Clementi and Tampines. The original planned Woodlands project had been deferred because further reviews of the site conditions are required.
This is the first exercise of 17,000 flats to be launched in 2017. The BTO flats range from 2-room Flexi to 3Gen flats. The wide selection of flats will meet different budget and needs. The price for these flats ranges from $81,000 for a 2-room Flexi at Punggol's Waterway Sunrise II and Northshore Cove to S$571,000 for a 5-room flat at Clementi NorthArc and Clementi Peaks, excluding grants. About 2,900 applicants applied for the 7-hundred 2-room flexi flats in Punggol.
Under the Fresh Start Programme, families that once owned a subsidised HDB flat and now live in public rental homes enjoy priority in buying 2-room flexi flats - on cheaper and shorter leases of 45 to 65 years.The normal lease is 99 years.
So why are BTOs so popular?
Because BTO flats are not built yet, they are newer than HDB resale flats.
New flats have a fresh 99-year lease. This means that these flats have a longer lifespan than Resale flats. Estates such as Ang Mo Kio could easily have leases with less than 70 years remaining.
And the renovation cost for the BTO flat might be cheaper due to the absence of hacking required. For a resale flat, you might need to incur the additional hacking cost of tiles and existing spaces that might have been built by the previous owner.
The layout of a typical 4-room BTO flat has also changed. Dining space has been moved into the living hall. This makes it more family-friendly, especially during meal times. Having the common bathroom nearer to the bedrooms as opposed to being situated in the kitchen also makes more sense.
And the downside of BTOs?
BTOs take about 3 years to be built. Sometimes even longer if the main contractor delays the project. So couples would need to do a proper marriage planning prior to getting their dream homes.
Due to land constraints in Singapore, newer flats tend to be smaller than older HDB flats too.
Unless you are lucky, it is likely that the location of your selected BTO would not be your most ideal choice. This is because most of the “prime locations” are highly contested.
HDB has also reported that about 2 in 5 BTO applicants invited to selected did not book a flat. The top three reasons for their rejection include their preferred units being taken up, their intention to apply for flats in other sales exercises, or them changing their minds and considering other housing options.
About 18,000 BTOs had reached the end of their minimum occupation period (MOP) as at end-2016. This is 80 per cent higher than the number of units that reached MOP in 2015.
In the recent Budget 2017, the government has offered more grants to move the HDB resale market. Young couples buying a resale HDB flat for the first time will be enjoying higher subsidies of up to S$50,000. And with the additional CPF Housing and Proximity Housing grants, it would mean getting up to S$110,000 in subsidies.
Also, HDB resale flats offer you a place to stay once contract is signed and loan is approved.
So is BTO cheaper than Resale flat?
SRX Valuation team has done a detailed price analysis of each BTO launch, financing forecast, required down payment amount, median price comparison of BTOs and HDBs, and investment opportunities. We have also analysed the median prices of BTO versus Resale flats in each HDB town.
Check out SRX.com.sg/hdb/bto if you are thinking of getting a BTO in future exercises.
If you decide to get a HDB resale flat, you can find out more about the floor plans, market X-Value, last transacted prices, HDB performance trends on srx.com.sg/hdb