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Singapore Property Cheat Sheet 2018: BTO vs Resale vs EC

Every Singaporean Dilemma: Should I Get A BTO, Resale or an EC

This article will serve to answer you this question that all Singaporeans planning to get their first property will ask:

“What are the differences, Pros & Cons of each type?”

You should be able to know at the end which type is best suited for you accordingly. I have included a real-life example below

(Editor’s note: I’m writing this article from a first-person buyer’s perspective, as I have been considering this with my Fianceé with much research)

Factors we considered

As with any other kiasu Singaporeans, we went through the whole process back in 2016 to apply for BTOs in Mature estates… Lo and behold, we failed to ballot on 6 occasions (including one Sale of Balance Flats, SBF) Yes, the odds are real. Here were our top considerations:

Factors to considerReasons
Location (most important)Near to MRT, not too far away from our family, accessibility to workplace
PriceAffordable repayment schedule
Potential resale valueAfter 5 years, will this property have appreciated in value
Condition of houseHow much effort and money needed to make it our dream home

At the end, we will share why we decided not to go for an EC – Hundred Palms, the most over-subscribed EC in Singapore’s history.

Also, we have invited a panel of experts for our FB LIVE on 8 Feb 2018 which will bring you through the process of decision making, and many other things to look out for as well. You can find more details here. Don’t worry we have nothing to sell, it’s purely for sharing purposes only! (more details at the end)

A Simplified Guide – For Newbies

Seedly Property Singapore EC vs Resale vs BTO

As mentioned above, I will try to list out what all these mean in as simplest terms as possible for each category!

1. BTO: Brand new HDB Flats

These are the most common type of flats offered by our government. Mainly built for first time home buyers, they are offered at the lowest entry price possible, which also often leads to heavy demand and often tough to ballot for more popular sites.

  • Non-mature sites (eg. Punggol, Chua Chu Kang): 3 room ~$160,000
  • Mature sites (eg. Toa Payoh, Geylang): 3 room ~$380,000
ProsCons
Brand new as first occupantsNeed to wait 3 to 4 years before moving in
Lowest ever prices land subsidised by govtNeed to stay the MOP (Minimum occupancy) for 5 years
High appreciation potential to re-sellMany restrictions on who you can sell and rent to

You can find out more about the grants and application process here.

2. Resale: Older HDB Flats

These are the next most common type of flats. However, this is on the secondary market, which also means the prices are set by demand and supply accordingly. From one HDB owner to others. It’s a free market and you can use sites like SRX, 99.co, and PropertyGuru to find your dream home.

  • Non-mature sites (eg. Punggol, Chua Chu Kang): 3 room ~$350,000
  • Mature sites (eg. Toa Payoh, Geylang): 3 room ~$450,000
ProsCons
Can come with some existing furnishingLimited appreciation potential (limited life)
Get to choose your locationsLimited subsidies available
Can move in immediately after purchasePotential re-design needed (e.g hacking, ID)

You can find out more about the grants and application process here.

3. Executive Condominium EC

The least most common type would be ECs. These became popular in the 1990s where there was a need for an upper semi-public housing option with full facilities. These will also get privatized 10 years upon completion. There is sadly only 1 EC launch near Sengkang this year in 2018.

  • Non-mature sites (eg. Punggol, Sengkang): 3 room ~$750,000
  • Mature sites (eg. Toa Payoh, Geylang): 3 room ~$950,000
ProsCons
Fully furnished condition (with cupboards, toilets etc)Most expensive with many fees (legal, stamp duty)
Highest appreciation in short time 3 to 5 years (privatised in 10 years)High downpayment and unable to take HDB loan option
Full ammenties available (eg swimming pool, tennis courts, gym)Need to stay for minimum 5 years before renting or selling

You can find out more about the grants and application process here.


Conclusion: Find what fits you best

To continue from the story above, we decided NOT to go ahead with the Hundred Palms EC which was the most oversubscribed EC in history.

Here were the reasons why we did not commit:

  • Cost was the main one and we did not want to borrow from our parents to finance it
  • Essentially we had to wipe our CPF OA (ordinary accounts) dry and top up Cash for a $192k downpayment
  • Huge commitment and the fear of getting out of job is real (having to stay in our current jobs for at least the next 10 years and more for monthly repayments)
  • Location was also a secondary concern, as it was not the closest to any train station and it was only best for couples and families with cars

We concluded that it was better to have less financial stress to think about and have a more comfortable repayment amount and duration. Hence, that was our decision. However, you may choose otherwise and see how the potential upside could be way more! (You can check out the calculations below for a 4 room EC)

EC No joke - Hundred Palms Seedly

 

Tips, Tricks, and Strategies on FB LIVE!

We’ll go even more in-depth to understanding more about getting your first property in Singapore for FREE. Just in time for the Feb 2018 BTO!

Getting Your First Property In SG

1) Timothy Ho, Managing Editor at DollarsandSense, a leading personal finance blog in Singapore

2) Nicholas Woon, Real Estate Consultant at ERA Realty Network Private Limited Singapore

3) Johann Lim, Happiness Champion at Qanvast – Interior Design Ideas, a one-stop portal


Further Reading:

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