Is it unromantic to do a ‘BTO proposal’? This typically involves one partner who pops the question about applying for a BTO HDB flat, which hints at marriage.
Last Valentine’s Day, we polled you (our followers) on Instagram Stories whether you felt that a BTO proposal was unromantic. 55% of respondents answered Yes, while the other 45% No.
Despite the results of our little quiz, the majority of Singaporeans are a practical bunch. Seeing that BTO flats typically take an average of four to five years to build – some longer, no thanks to construction delays due to COVID-19 – it makes sense to secure a home before going down on a bended knee. After all, why rush into marriage if you’re not going to live together until half a decade later?
It’s a timely topic, especially since the yearly February 2023 HDB BTO launch is happening really soon. Regardless of whether you think a BTO proposal is romantic or not, let’s minus romance from the equation for a minute and delve into the practical pros and cons of doing a BTO proposal.
HDB BTO Proposal: Pros and Cons
|Pros of HDB BTO Proposal||Cons of HDB BTO Proposal|
|Cheapest housing option, minimal cash outlay||Takes a long time to build|
|Able to ‘flip’ for money after MOP||Gotta wait for MOP before selling|
|Possible stepping stone to a private property||Ballot system means it’s not guaranteed|
|Can use to ‘test water’ of partner’s willingness to marry||Possibility of the relationship ending during the five-year wait|
Pros of an HDB BTO Proposal
As public housing flats, HDB BTO flats are currently the cheapest way to own a property in Singapore as these units are subsidised by the government with CPF housing grants available. After flat owners fulfil the five-year Minimum Occupation Period (MOP), they can sell the flat on the open resale market, typically for a higher price.
Depending on location, demand and flat type, you might even be able to sell your HDB flat for a cool $1 million.
With the money earned from ‘flipping’ your property on the open market, you can get another property (a second BTO flat, anyone?), potentially with money left over for renovation and investment. Some couples even use their BTO as a stepping stone to upgrade to a private property with the proceeds from selling the flat.
Before you sell your HDB flat, do remember that you still need to pay your HDB or bank loan in full, with accrued interest and/or any penalties when redeeming the loan amount early. You’ll also have to put the money back into your CPF if you used money from your Ordinary Account to pay housing loans.
In any case, by casually asking, “BTO ai mai?”, you’re able to suss out your partner’s willingness to get married (to you). However, this is not recommended for those in the early stages of their relationship. Your partner might run far, far away if you start talking about applying for a BTO flat when you’ve only just started holding hands a week ago.
Cons of an HDB BTO Proposal
One deterrent is that currently, BTO flats take an average of four to five years to reach completion. After which, you add on about six months for inspection, correction of any defects, renovation and finally the big move. Add on having to fulfil MOP, and you’re looking at a long time (one decade!) till you are able to profit off your first property.
Some BTO flats, like the upcoming Prime Location Public Housing (PLH) model blocks at Rochor, could take as long as eight years to be built.
Add to this long completion time the MOP of 10 years for this new type of BTO flats, and it’s a total of 18 years before you can actually flip this on the resale market for profits. Even then, you’ll be limited by who you can sell the PLH flat to, as compared to a normal BTO flat.
Additionally, the allocation of BTO flats is determined by ballot. You’ll need to rely on Lady Luck to even have a successful BTO application. Of course, you could apply for projects that see lower demand instead of popular launches, where up to 20 people are clamouring for 1 unit (in the case of the August 2021 Hougang HDB BTO project).
We’ve personally heard of friends who applied over five times before they finally either gave up and bought an HDB resale flat, appealed to their MP for help, or got lucky on their sixth try.
There’s also the possibility of a couple breaking up and having to cancel their BTO flat application. It’s sad, but life’s like that and people, situations change. Forfeiting the $10 application fee and your spot is a small issue; some couples have to forgo their entire deposit. Although the down payment isn’t a small sum, we feel it’s more important to end a relationship that isn’t right instead of forcing a union that’s not meant to be.
While it’s pretty obvious that those who are gunning for a BTO proposal win when it comes to efficiency and practicality (apply for BTO first, plan for the actual proposal and wedding while waiting for the flat to be built), how about those die-hard romantics who insist on a proper proposal first?
Alternative #1: Propose First, Then Buy a Balance Flat
One alternative is to get on with your proposal first, then buy a Sale of Balance Flat (SBF). These are also BTO flats, but from earlier launches, and hence might already be half-completed which shortens your waiting time for the flat. Prices, too, are comparable to that of freshly launched BTO flats, albeit a tad more expensive.
The only thing is, you’ve got to deal with fewer units to choose from. This means that you might be facing even stiffer competition, or can only choose between low-floor units, as all the high floors with great views have all been snapped up.
However, it’s a good compromise as it gives you time to first propose, then pick a flat that takes about one to 1.5 years to reach completion, which is about the same amount of time required to plan a wedding, renovation and move-in.
Alternative #2: Propose First, Then Buy a Resale HDB or Condo
If you don’t have time but you’ve got the cash on hand, opt for a freshly MOP-ed resale HDB flat right after your proposal. If you’re not fussy, resale properties are move-in condition, so it’s the fastest route. However, if you go for an older resale HDB flat, you might need to splash more money on renovation due to hacking works and so on.
In addition, if you’re aiming for a resale HDB flat in a mature estate, perhaps it makes more sense to buy a condominium unit for the same amount of money instead. But for those looking for a resale HDB flat or condo unit, know that non-landed private property and HDB prices touched record highs in 2021, so you might still want to play the waiting game or look for a property in non-mature estates.
You’ll have the advantage of speed with this option but at a price premium. You’ll also need to plan your timeline carefully if you want the whole package of proposal > wedding > move-in to happen smoothly.
Should You Apply for an HDB BTO Flat Before Proposing?
As we mentioned above, we feel it’s not worth rushing to commit to a partner just for the sake of a property purchase or because your down payment has been made. Everyone has their own timeline, so take things at your own pace.
Going for a BTO is not the only way forward. Even if you don’t manage to get a BTO or even a balance flat, there are other ways to work around the property timeline. For example, you can consider renting, living with parents or in-laws in the interim, and so on.
Whatever your decision, make sure it’s right for both of you. In the end, marriage is a long-term partnership, not a competition or a sprint.
Happy Valentine’s Day, from all of us at PropertyGuru!
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This article was written by Mary Wu, who hopes to share what she’s learnt from her home-buying and renovation journey with PropertyGuru readers. When she’s not writing, she’s usually baking up a storm or checking out a new cafe in town.