Buying HDB resale flats offers several advantages over patiently applying and waiting for a brand new Build-to-Order (BTO) flat to be built. For one, you can move in quickly and this is especially useful for those with more urgent housing needs.
In this article, we’ll cover the pros of buying HDB resale flats, the available schemes, eligibility, how to buy an HDB resale flat on PropertyGuru, and more. Let’s get started!
Watch Our Video on Financing an HDB Resale Flat
What is an HDB Resale Flat?
Resale flats are HDB flats that are currently owned by someone else. They have already been lived in for at least the Minimum Occupation Period (MOP), which is typically five years.
When buying HDB resale flats, the buyer is taking over the property from the previous owner. That also means you can collect your keys as soon as the transaction is completed.
Unlike when purchasing brand-new BTO flats, buying HDB resale flats means you are getting a property that does not come with a fresh 99-year lease. The older a flat is, the fewer years will be left on the lease. So when buying HDB resale flats, it is important to consider how many years there are left on the lease to determine if purchasing the property is worth the price.
Another thing to note is that the cost of renovating resale flats tends to be higher than that of renovating BTO flats since you will have to remove or modify renovations carried out by the previous owner.
HDB BTO vs Resale Flats: 7 Benefits of Buying HDB Resale Flats
Waiting Time
3-5 years
Immediate
Chances of Obtaining a Unit
Based on luck. Balloting is required and the chances of successfully getting a flat is slim especially if the location is a popular one.
Very high, as it is just a matter of reaching an agreement with the seller.
Income Ceiling
Max household income is $14,000 for couples, $21,000 for extended/multi-generation families, and $7,000 for singles.
No income ceiling limit.
Locations
Limited, dependent on the launch.
No restriction of location, you have the freedom to choose a resale flat anywhere.
Flat Size
You’ll find most 4-room BTO units at 92 sqm, and 5-room units at 110 sqm.
If you’re lucky, some older 4-room HDB units are at 100 sqm, and 5-room units at 130 sqm.
Eligibility Criteria
At least one of the applicants must be a Singaporean.
PRs are allowed to buy resale HDB flats.
Housing Grants
Under the Enhanced CPF Housing Grant (EHG), first-time BTO flat buyers can receive up to $80,000.
On top of the EHG, resale flat buyers are eligible to apply for the Family Grant ($50,000), and a Proximity Housing Grant ($30,000).
There are some clear advantages to buying HDB resale flats over BTO flats.
1. Shorter Waiting Time for Resale Flats
You can move into a resale flat immediately after the sale is completed. The resale procedure typically takes under three months. By contrast, the waiting time for a BTO flat is typically 2.5 years from the date of application.
2. No Need to Ballot for Resale Units
Getting a BTO flat is largely a matter of luck. First, you need to successfully ballot for a flat in a development. When you have successfully been selected, your ability to pick a unit you like will depend on your queue number.
When buying HDB resale flats, there is no balloting process. As long as you and the seller come to an agreement, you can buy the unit, provided of course that you satisfy HDB’s eligibility requirements.
3. No Income Ceiling When Buying HDB Resale Flats
Unlike BTO flats, which have a monthly household income ceiling limit ($14,000 for families, $21,000 for extended/multi-generation family flats and $7,000 for singles), there’s no income ceiling limit for those buying HDB resale flats.
4. More Locations to Choose from When Buying HDB Resale Flats
BTO flats tend to be launched in non-mature estates such as Punggol and Sengkang, typically far from the city centre. While there are some BTO launches in mature estates, these are always highly sought-after and therefore difficult to successfully ballot for. Buying HDB resale flats gives you the freedom to get a flat in the location you want, especially if you want to live closer to your parents.
5. Resale Flats are Usually More Spacious
New BTO flats tend to be smaller than older flats of the same type. Resale flats tend to be more spacious with bigger bedrooms.
6. PRs Can Buy Resale HDB Flats
While BTO flats are only reserved for Singaporeans, PRs can buy resale HDB flats (see the full requirements for PRs here).
7. More Housing Grants for Those Buying HDB Resale Flats
With the new Enhanced CPF Housing Grant (EHG), the maximum grant amount that first-time BTO flat buyers can receive is $80,000. However, first-time resale HDB flat buyers can receive even more grants compared to BTO flat buyers.
In addition to the $80,000 grant amount from EHG, resale flat buyers are also eligible for $50,000 (Family Grant) and $30,000 (Proximity Housing Grant) in grants. This means the total grant amount that resale flat buyers can get is $160,000.
Buying HDB Resale Flats: What Is the Eligibility Criteria and Who Can Apply?
To be eligible for HDB resale flats, you must check all the boxes:
- At least one Singaporean citizen or two Singapore Permanent Residents listed in the flat application
- At least 21 years and above if you’re buying in an approved family nucleus, or 35 years if you’re buying as a single
- Within the Ethnic Integration Policy and Singapore Permanent Resident quota of the block/neighbourhood
- Not own any other residential properties or any houses/buildings/land whether locally or overseas, or have disposed of them in 6 months before the resale flat application
In addition to the above, you’ll also need to fall under these schemes before you buy an HDB resale flat.
Public Scheme
If you’re planning to buy a resale flat with a family member, for example, wife and children, parents and siblings, and your children
Fiancé/ Fiancée Scheme
If you want to buy a resale flat with your fiancé/ fiancée
Single Singaporean Citizen Scheme
Singaporean singles who want to buy an HDB resale flat (you’ll need to be 35 years old or above if you’re unmarried/divorced, or 21 years or above if you’re widowed or an orphan).
Joint Singles Scheme
Singaporean singles who want to jointly buy an HDB resale flat together (have to be 35 years old or above if you’re unmarried/divorced, or 21 years or above if you’re widowed or an orphan)
Non-Citizen Spouse Scheme
If you’re buying a resale flat with your spouse who is either on a Long Term Visit Pass or Work Pass
Non-Citizen Family Scheme
If you’re a single Singaporean looking to buy a resale HDB flat but your family members aren’t Singaporean citizens or Singaporean PRs
Orphans Scheme
If you and your siblings are orphans and single and want to buy a resale flat together
Conversion Scheme
When you and your family members want to buy adjoining flats that are 3-room or smaller and combine them into one unit
Check the Ethnic and PR Quota When Buying HDB Resale Flats
When buying HDB resale flats, you will also need to ensure that you are within the ethnic quota of that particular block or neighbourhood. If you are a non-Malaysian PR, you will also have to make sure the quota for PRs has not been exceeded.
The ethnic and PR quotas are updated on the first of every month and affect resale applications in that month. As such, you may have to check the quotas again if you submit your application in a later month. You can check your eligibility on HDB’s website.
Is There a Minimum Occupation Period (MOP) for HDB Resale Flats?
Yes. Besides the eligibility criteria, the main regulation resale flat buyers need to worry about is the Minimum Occupation Period (MOP), which is typically five years from the key collection date.
During the MOP, the buyer is expected to live in the flat and is not allowed to rent out the entire unit. Rental of rooms in the unit is permitted so long as the buyer continues to live in the flat.
Financing Your HDB Resale Flat: How to Pay for Your New Home
The savings in your CPF Ordinary Account (OA) can be used to pay for your flat, as well as your monthly mortgage instalments.
If you are taking an HDB housing loan, you are required to drain your CPF OA balance or opt to retain up to $20,000 in your OA. For flats with a balance lease of under 60 years, there might be withdrawal limits on your CPF OA.
The two main loan options for buying a resale flat: an HDB loan, or bank loan. Generally, those with less cash flow opt for HDB loans as the loan-to-value (LTV) ratio is 85%, meaning you only need to pay a 15% downpayment upfront.
Those with more cash/CPF savings consider bank loans too: although it requires a 25% downpayment (due to the 75% LTV limit) and the interest rates are usually more attractive than HDB’s.
HDB or Bank Loan? 4 Things You Should Always Consider
Read more here.
At the same time, you might want to speak to PropertyGuru Finance’s Mortgage Experts to plan your financial health and future.
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