Agent Recommendation: The Pros and Cons of Buying a BTO Flat

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Agent Recommendation: The Pros and Cons of Buying a BTO Flat


Listen up homebuyers, if you’re torn between choosing an HDB BTO flat or a resale flat, you’re not alone. Ohmyhome’s very own CEA-licensed super agent weighed in on the dilemma that has homebuyers reaching an impasse: whether they should purchase an HDB BTO or a resale flat. There’s much to unpack here so settle in.

The pros

Potential return on your investment

HDB BTOs could appreciate in value, ideal for you if you are looking to sell off after the 5 years Minimum Occupancy Period (MOP) and pocket some cash. This is because BTOs are heavily subsidised and comes with an increasing amount of amenities and updated flat design that will boost its value on the market. Recently, a Punggol Sapphire loft – originally bought for $452,000 during the 2008 BTO launch – made waves when it was sold for $910,888 due to the property’s high demand. For older resale flats, depending on certain market conditions, there’s a risk of making a loss in your CPF as they can depreciate in value over time. According to the Straits Times, resale prices dropped by 0.9% in 2018.

It’s more affordable than resale

That’s right, BTOs are subsidised by the government and comes with a slew of government housing grants (particularly if you’re a first-timer) such as the Additional CPF Housing Grant (AHG), Special CPF Housing Grant (SHG) and the Staggered Downpayment Scheme (SDS). Say you’re looking for a 4-room BTO in Tampines which costs $352,000 with a downpayment of $35,200 (10%). This is even more feasible for first timers who qualify for the SDS which allows you to pay half of the downpayment when you sign the lease agreement and the rest when you get your keys. In comparison, the average 4-room resale flat in the same estate costs $425,000. Since its a resale flat, you won’t be eligible for SDS. As such, a BTO gives you more wiggle room in your budget to set aside for renovation costs, furnishing, repairs, etc. The home of your dreams is just that much more attainable.

Renovation costs are a lot cheaper

This is because you will literally have a blank slate to work with should you buy a BTO flat. However, should you want to start renovating a resale flat, there’s the previous owner’s existing interior design to dismantle before you can even start work on yours. According to Qanvast, the renovation costs could increase by 40%.

Agent Recommendation: The Pros and Cons of Buying a BTO Flat

The cons

The long waiting period

Typically, the resale flat is the preferred option for those who can’t wait to move into a new home. This is understandable as there’s a considerably long waiting time of 4-5 years for BTOs to be completed.

Harder to spot for defects

There are defects to the BTO that you might unexpectedly find only after you’ve moved in. This wouldn’t normally be the problem for resale as you are able to get an up close and personal view of the flat before making your decision.

Predetermined location

BTO is determined by HDB launches and as such, if you are looking to settle down in a very specific area like, say Bedok: you might be out of luck. You won’t be able to pick and choose the location you want. As of 2019, the HDB announced its BTO 2019 launches that are set to be built at Sengkang, Jurong West and Kallang Whampoa.

Typically smaller unit than resale flats

A 4-room BTO and a 4-room resale can look as different as night and day. Back then, an average 4-room resale flat can be sized anywhere between 85-105 square metres while 4-room BTO flats are set at 90 square metres.

Agent Recommendation: The Pros and Cons of Buying a BTO Flat Smaller unit than resale flats

In short, BTOs are ideal if you are not in any rush to move, looking for a starter home, not picky about specific estates and working with a tighter budget. Otherwise, resale flats are always an option if you want the luxury to pick and choose a unit that fits your exact needs. Happy house hunting!

Are resale units more your speed? If you’re looking to buy a resale unit, check out our non-duplicated listings and DIY your housing transactions completely free of charge. Rest assured, there is no hidden or success fee.

Sources: Qanvast,, HDB, Dollars and Sense, HDB, CPF Board

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