So, you’re thinking about buying an HDB flat, but you do not wish to wait years for a brand new Build-to-Order (BTO) flat to be built. Your other option? Buy an HDB resale flat.
In this article, we'll cover the pros of buying a resale flat, the available schemes, eligibility, how to buy one on PropertyGuru, and more.
Let's get started!
What is a 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 you buy a resale flat, you are taking over the property from the previous owner. That also means you can collect your keys as soon as the transaction is completed.
Unlike brand new BTO flats, resale flats do not come with a fresh 99-year lease. The older a flat is, the fewer years will be left on the lease. So, it is important to consider how many years the lease has left when determining if a resale flat 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 Picking a Resale Unit
Despite not receiving a brand new flat, there are some clear advantages to buying a resale flat over a BTO flat:
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.
Max household income is $14,000 for couples, $21,000 for extended/multi-generation families, and $7,000 for singles.
No income ceiling limit.
Limited, dependent on the launch.
No restriction of location, you have the freedom to choose a resale flat anywhere.
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.
At least one of the applicants must be a Singaporean.
PRs are allowed to buy resale HDB flats.
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).
#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.
With 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 for Resale Flat Buyers
Unlike BTO flats, which has 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 resale HDB flats.
#4. More Locations to Choose from
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. Resale flats give you the freedom to get a flat in the location you want, especially if you want to live closer to your parents.
Recommended article: Comparing HDB Flats in the Same Estate: How Old Should You Go? (BTO vs Resale)
#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 HDB Resale Flats (in addition to EHG)
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.
Tip: Shopping for a new home? Then it's time to work out a feasible budget and compare home loan interest rates. For more personalised advice, PropertyGuru Finance's home finance advisors can help (and for free, too!).
HDB Resale Flat Eligibility Criteria: 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:
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).
Related article: Single and Over 35? Should You Buy an HDB BTO or Resale Flat?
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 with your family members aren't Singaporean citizens or Singaporean PRs
If you and your siblings are orphan and single and want to jointly buy a resale flat together
When you and your family members want to buy to adjoining flats that are 3-room or smaller and combine them into one unit
Don't Forget to Check the Ethnic and PR Quota Too!
Before you can buy a resale flat, 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 savings 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 90%, meaning you only need to pay a 10% downpayment upfront.
Those with more cash/CPF savings consider bank loans too: although it requires at least 25% downpayment (thanks to a 75% LTV), the interest rates are usually more attractive than HDB's.
Read more about these home financing options in this article: HDB Loan vs Bank Loan: Which one is right for you?
At the same time, you might want to speak to our Finance Advisors to plan your financial health and future.
Related article: Is Now the Right Time to Buy an HDB Resale Flat?
Tip: For The Best Experience, Shop for HDB Resale Flats on PropertyGuru!
We shouldn't have to tell you this, but of course, the PropertyGuru portal is the best for browsing HDB resale flats for sale in Singapore. You can search according to flat type, location, price and number of bedrooms.
To start, make sure the “Type” is filtered to “HDB Apartment”. Click on the HDB resale flat listings that interes you and you will be taken to the property’s individual page with its full details.
Here's a step-by-step guide on maximizing the PropertyGuru platform:
1. Check the Lease Expiry
On the PropertyGuru listing, scroll down to “Project Info”. The “TOP” indicated is the year the 99-year lease begins (i.e. when the first owner bought the unit from HDB). For example, a flat with a “TOP” of 1978 would be 42 years old in 2020, with a lease that would expire in 57 years’ time.
2. View Several Units with a Property Agent, and Let PropertyGuru AreaInsider Help You Arrive at a Decision
The easiest way to view property units is to use a property agent. The agent will set up an appointment for viewing the property.
If you hire an agent in the capacity of a buyer, you will have to pay agents’ fees on the purchase. However, if you liaise with an agent that the seller has hired, you do not have to pay agents’ fees. The agents who leave their contact details on PropertyGuru listings have typically been engaged to act for the seller, but be sure to check.
When viewing units with an agent, you should analyse the property to determine if you are getting good value for money and any additional costs you might incur.
Other than factors like location and direction the unit faces, which apply to all flats, resale flat buyers must also consider the extent to which renovations must be undertaken. Examine the flat closely for wear and tear. In the case of older flats, you should also consider whether the flat has been recently upgraded and ask the owner about the age of wiring and appliances like stoves, which might have to be replaced if they are too old or outdated.
Not sure which area you’d like to live in? Check out PropertyGuru AreaInsider to get the scoop on the various residential areas in Singapore.
3. Negotiate On The Price and Sign The OTP
The prices indicated on most property listings in Singapore are usually negotiable, so do try to bargain. Put on your thickest skin!
Once you and the seller have come to an agreement, it is time to sign the Option to Purchase (OTP). The OTP should be printed out and provided by the seller. You will also need to pay an option fee (also negotiable) of $1 to $1,000.
4. Submit Resale Flat Application to HDB
The next step is to submit the resale application to HDB. Both buyer and seller must complete their part of the application and submit it to HDB separately. If you are using a property agent, the agent should be able to submit the application on your behalf.
After the submission of your application, you will have to attend two appointments with HDB and arrange for financing. The whole process from the submission of the resale application to collection of keys usually takes about 11 to 13 weeks provided there are no hiccups.
More FAQS Related to Buying a HDB Resale Flat in Singapore:
Can I buy a HDB resale flat from HDB?
HDB resale flats are sold by existing HDB flat owners. All listings and transactions are done with the involvement of the sellers and the agents.
Can I buy a HDB resale flat without a agent?
It is possible to do so, provided that you are very well-versed with the procedure, listing details and paperwork involved. Making any mistakes can lead to a hefty disaster. It is definitely best to have a professional to guide you along the way.
Can a single PR buy a HDB resale flat?
Unfortunately, no. A single PR cannot buy a HDB resale flat as they have to make the purchase under the Public Scheme (buying with family) or the Fiance/Fiancee Scheme (buying with a spouse). Read more about it here: Can a Singapore Permanent Resident (PR) Buy an HDB Flat in Singapore?
How long does it take to buy a HDB resale flat?
It takes roughly eight weeks for a successful transaction to occur. Read more about the process on HDB's website here.
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