Ultimate Guide to Housing in Singapore for First Time Buyers

Resale HDB Flats are those flats that have already been sold to a person but are up for sale.

Resale flats are available in the open market but cannot be bought straightforwardly from HDB.

The sale of housing units shows that the essential occupier has already completed the lock-in period, which is 5 years in Singapore.

Singapore has a law barring people from selling houses right after purchasing.

This law refers to the Minimum Occupation Period.

The MOP states that a person must actively stay in a house for at least 5 years before selling it to anyone.

It is done to prevent the price of houses from escalating without control.

For first-time sellers, the sales proceeds will be divvied up to resale levy if there is any.

Older Resale flats have shorter leases and may face some problems with the housing loan from the bank.

Retired residents can also rent out their flats as a source of retirement income.

They can use their property for investment purposes and turn it into living trusts.

It is best to examine the dos and don’ts of the residential property market before making an impatient decision.

Flat buyers can choose to purchase their homes in almost any part of the city.

Before moving further on Resale HDB flats, let us look at all the housing types in Singapore.

• Public Housing – HDB flats are comprised of public housing.

The Married Child Priority Scheme will be amended accordingly to the location of the building sites.

You should be 21 years old and above and prepared to pay a monthly instalment for the property.

Mortgage repayments start from the first day of the second month once your loan is disbursed, and it will continue until the total amount is repaid.

The Executive condo is a big flat with an estimated 130 Sqm of floor area and comes with a balcony.

The condominium unit has specific ownership restrictions, one of which is the 5-year Minimum Occupation Period.

• Private Housing – Private houses are the opposite of public housing and are costlier, but they have fewer restrictions.

Private housing prices are premium and can be rented out to foreigners for three months if they are on a short-term visit.

However, to become private property owners, you have to clear the MOP of your flat.

Private condos and apartments are the least expensive among private housing compared to other private housing.

Executive condominiums are flats with joint owners for specific facilities like swimming pools, gyms, etc.

• Hybrid Public & Private Housing – The purpose of introducing these types of housing was so that people could afford more space than the standard HBD flats provided.

Property investors in this type of hybrid housing would become owners in due time, meaning it would become a private flat.

The property count doesn’t matter if you are a Singapore PR or a Citizen.

If your purchase property A, you will have to live there for a 5-year lock-in period to gain full ownership.

The average property purchase price of HBD flats in Singapore is around 2 million Singapore dollars per square foot.

The additional non-remittable ABSD rate is 5% for housing developers, amounting to an aggregate ABSD rate of 30%.

To find out more about the entities, rate on purchase, and rate environment, you can google ABSD Rate IncreaseWhy.

Now that we know about the housing types let us get back to Resale HDB Flats.

HDB stands for Housing and Development Board, the public housing authority in Singapore.

All these flats have the HDB initials because the Housing and Development Board regulates these flats.

Residential property can be sold as resale HDB flats or as new units during BTO launches.

There are different types of resale HDB public flats for sale in Singapore.

• 5-room flat
• Jumbo flat
• 2-room Flexi flats
• 3-room HDB flat
• 5-room resale flats
• Terrace houses

Pros of Resale HDB Flats

The main positive about resale HBD flats is that it is affordable to most Singaporeans.

They are sold by the government on a 99-year leash and bear the cost to a good percentage so that it sells for cheap.

The buyers can also apply for the multiple housing grants and other priority

schemes set up by the government.

Cons of Resale HDB Flats

Though the resale HDB flats are affordable, they also come with specific terms and conditions.

HDB flat buyers are bound to spend five years as dictated by MOP. 

They cannot sell the house right after purchase and can rent out only a part.

There is a minimum requirement of 7000 dollars as one’s monthly income.

You cannot rent out these flats to tourists.

The only people eligible for renting the flats are the Singapore Citizens, Singapore

Permanent Resident, people having student passes, employment passes, long-term social visit passes, etc., valid for 6 months.

What is Build to Order (BTO) HDB Flats

Build to Order HDB Flats are the flats that cost the least compared to other housing plans in Singapore.

The purchase price attracts newly married couples or young people.

Even young men and women that want to live alone can apply for the BTO HBD flats, but they cannot get more than 2 bedrooms.

People can avail of CPF Housing grants if the total income ratio in the previous year, from the date of application, does not exceed 9000 dollars.

The current housing loan package for BTO differs from resale flats, going as low as 1.20% depending on special approval from different banks.

The HBD typically sends out a notification mentioning the location of the construction area 6 months before the flats are built. 

Through this notification, people will come to know about the availability and can apply for the residential units.

The HBD has changed the 6-month rule by announcing that they will name the land sites 3 months before the units of housing accommodation are built.

The BTO flats take around 3-4 years to be completed, and you will be given access to the flat only after the completion.

Processing the monthly loan repayment will start after you move into the flat.

BTO DB flats are some of the cheapest housing projects among HDB flats.

They are mostly sought by young men and women who want to move in together to start new families, or by single people that are looking for homes to live in.

 Pros of BTO HDB Flats

A BTO HDB flat is a type of property that is newly built, so the interior designs and infrastructure that come with it will be modern and up to date.

There will be no need to spend extra expenditure on renovations, saving the property buyers a decent amount of money.

The HBD flats are suitable for new couples in Singapore as they do not need to make a significant financial commitment to housing.

Planning to grow a family is complex, and young couples prefer to start in BTO HDB flats with the property market price going up.

If couples are new to living in Singapore, HBD offers heavy discounts on the BTO flats.

BTO flat leases are longer than other resale flats that have already been in the secondary market a couple of times.

Since you cannot sell BTO flats right after purchase because of the MOP, you can put them up for sale for a much more considerable amount after the completion of 5 years.

Cons of BTO HDB Flats

The property developers will take around 3-5 years to complete the construction of the flats, making clients wait for an extended period.

You do not get to choose the area to build the flats as the HDB makes those decisions.

The intending applicants must wait for the notification stating where the building sites are located.

You are not allowed to sell the flat for a 5-year minimum occupation period, which will cost you about 10 years altogether with the 3-5 years waiting period.

If your resale HDB lease is old, the banks might restrict your current home loan package, or you might not get the maximum home loan amount you are eligible for.

What is Sale of Balance (SBF) HDB Flats

The BTO units that the HDB was unable to sell are called Sale of Balance HDB flats.

They launch twice a year, and applying for flats can be done from the HDB

Website.

Any unit that is left after the SBF sales will be open for booking at a later date.

What is Sale of Balance Flats

Some homes and flats are not purchased by applicants.

Those remaining HBD flats are called Sale of Balance Flats.

Pros of Sale of Balance (SBF) HDB Flats

People can move into their homes without having to wait for years.

There are multiple options of location sites to choose from since these flats are remainders of BTO buildings from all over the country.

 Cons of Sale of balance (SBF) HDB Flats

Property buyers will have to spend more than they would on BTO flats because the waiting period is much shorter.

If you decide to sell the SBF, you will not receive the whole amount of your selling price.

Property tax will be levied on the flat along with the agent’s commission fee and the like.

SB flats remain available because former applicants have rejected them due to the area or poor accessibility.

A resale condo is a condo that has changed ownership multiple times. 

You could be the 10th owner of the condo also.

They are cheaper compared to new executive condos.

The resell value is not that high as the previous owners must have profited from their sales.

What is Resale Condo

Some condos keep changing ownership after their leases are over. 

Such condos are called Resale condos and they cost lesser than the new condos.

Pros of Resale Condo

You will find that there are many locations you can choose resale condos from since they are spread everywhere.

Unlike new condos, resale condos are leased out for more extended periods.

The resale condos will be bigger and built-in more spacious lands.

Cons of Resale Condo

An older lease means there will be signs of wear and tear, which can determine the price of the condo.

There are no HDB or property agents involved in this transaction.

Everything depends on the willingness of the buyer and the seller to come to a common ground and agree on the price.

There might be a need to spend a hefty amount on renovations since resale condos are old and outdated.

New launch condo units are buildings under construction and take a few years to complete.

It is one of the most sought-after homes in Singapore, and the new launch condo development comes with developer incentives when bought after its launch period.

The balance units of the Executive Condominiums are released on the 1st and 5th of every month.

Leasehold resale condos are returned to the original owner after the end of the lease period.

A new launch EC is an executive condominium that is more spacious than the regular HBD flats.

These condos come with standard facilities like the gymnasium and swimming pools shared by everyone in the building.

Pros of New Launch EC

New launch condo units come with early bird discounts during a soft launch.

You are not assigned a unit by the developers but can choose them yourselves.

The consideration for stamp duty purposes is equivalent to the total amount you pay for a property.

You will be able to give lower monthly payments, meaning it will be in long-term instalment payments.

There is a fire sale for unsold condos in small units that come with new launch discounts.

There will be direct cash discounts if the installments are paid on time.

Cons of New Launch EC

What you see in the showpiece or advertising pamphlet may not be how the actual condo is.

Advertising well is one of the key features to attracting customers.

You will end up waiting for 4 to 5 years since the condos need to be built.

Resale Executive Condominiums are part of the public-private hybrid housing, examples of which can be a semi-detached house, terraced houses, and child care centre.

They also have standard flat features like swimming pools, gymnasiums, etc.

The residents can make a collective investment scheme so that everyone can profit from it.

What is Resale EC

Resale EC are housing condos that are privatized after a few years.

The occupiers will become the owners and can sell off the properties.

Pros of Resale EC

The Resale ECs are homes where you can move in a couple of months.

Once the resale EC becomes fully privatized, you can sell it for a very high price as the time it takes to become private homes is much shorter than new launch ECs.

Your current bank loan can be up to 60% of your monthly income.

Cons of Resale EC

When you buy a resale EC, the maximum loan tenures of the property are over, giving you access to the home for only a few years.

You will need to make a higher downpayment.

Unlike the standard HDBs, your monthly loan installments will also be higher.