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How Much Can You Save By Opting For A BTO Flat Over A Resale Flat

New BTO flats are cheaper compared to resale flats but possibly, not as much as what many home buyers may expect – once HDB resale housing grants are included in.

Most people generally accept that that Build-To-Order (BTO) flats are cheaper compared to resale flats in the same area. Thus, it’s usually advisable for first-time Singapore homeowners to apply for BTO flat as long as they can 1) wait for the flats to be completed and 2) find a location that they are satisfied with.

BTO flats also come with fresh 99-year leases, making it easier for these flats to retain their value over a longer time as compared to resale flats.

But how much do first-time homeowners save when choosing a BTO flat over a comparable resale flat in the same vicinity?

Before we make the price comparison, we need to point out that if you don’t need a home immediately (e.g. you are only getting married in 3 to 4 years), then applying for a BTO flat makes sense since the wait time isn’t going to be an issue for you.

Comparing Pasir Ris Flat Prices For The August 2020 BTO Launch To Resale Flat Prices

The August 2020 BTO launch offers us eight different estates that are launching BTO flats. Some estates such as Tengah have comparable flats that are about 16-17 years old, making it hard for a comparison.

However, the Pasir Ris BTO launch is good for our comparison. This is because Pasir Ris has 3-room, 4-room and 5-room resale flats that are about 6 years old. Launched originally in 2011, homeowners of the Costa Ris estate got the keys to their units in 2014 and received their Minimum Occupancy Period (MOP) in 2019.

Both Costa Ris (launched in 2011) and Costa Grove (August 2020 Pasir Ris BTO launch) are conveniently situated right beside the Pasir Ris MRT station. Costa Grove is also the first BTO launch in Pasir Ris since Costa Ris was launched in 2011.

Disclosure: The writer owns and lives in an HDB flat in Costa Ris.

(Pasir Ris Flat Prices Comparison, Source: HDB)

Let’s compare the median flat prices of the BTO launch at Costa Grove against the median flat prices of the comparable resale flats (at Costa Ris).

Median BTO Flat Price Median Resale Flat Price Difference
3-Room $281,000 $386,000 $105,000
4-Room $417,000 $528,500 $111,500
5-Room $537,000 $640,000 $103,000


From the table above, we can see that the difference between median sales price of the resale flats and the BTO flats is about $106,500 on average, with the resale flats being more expensive. On top of that, BTO flats have a fresh 99-year lease upon owners receiving their keys, as compared to the resale flat, which is already six years old if you buy it in 2020.

With the resale flat, however, you can move in immediately while the Pasir Ris BTO flat have an estimated completion date of 4Q2025, which means a waiting period of about five years.

Family Housing Grant

For first-time Singaporean buyers opting for HDB resale flats, they are eligible to receive a Family Grant of $50,000 for 2-room, 3-room and 4-room resale flats. Buyers of 5-room or bigger resale flats will receive a Family Housing grant of $40,000.

2-room, 3-room, 4-room 5-Room or bigger resale flats, Executive Condominium
Both Singapore Citizens $50,000 $40,000
One Singapore Citizen, One Permanent Resident $40,000 $30,000


Proximity Housing Grant (PHG)

If we live within 4km of where our parents/child live, we will be eligible to receive the Proximity Housing grant of $20,000. If we intend to live with them, we will receive $30,000. This is only applicable for resale flats.

In other words, as a first-time buyer considering a resale flat, we would qualify for additional housing grants of between $40,000 to $80,000.

For comparison purposes, we are not taking into account the Enhanced CPF Housing Grant since this grant applies to both BTO and resale flat buyers.

Difference In Resale Flat Cost Once You Include In Resale Housing Grants

For our comparison, let’s assume first-time homeowners want to buy a 4-room resale flat at Pasir Ris to live near their parents. In this case, they will be eligible for both the $50,000 Family Housing Grant and a further $20,000 Proximity Housing Grant.

As the average cost difference between 4-room resale flats and BTO flats is $111,500, the $70,000 grant will reduce the difference to just $41,500. Further examples below.

Median BTO Flat Price Median Resale Flat Price Difference Difference with Family Grant and $20,000 PHG
3-Room $281,000 $386,000 $105,000 $35,000
4-Room $417,000 $528,500 $111,500 $41,500
5-Room $537,000 $640,000 $103,000 $43,000


In our example for a 4-room flat, what looks like a substantial difference of $111,500 is now reduced to a reasonable difference of $41,500 once the Proximity Housing Grant (if you are eligible for it) and Family Housing Grant is included. However, that is not all.

BTO homeowners have to decide whether to opt for the Optional Component Scheme (OCS) for flooring, internal doors and sanitary fittings. For 4-room flats without balcony, this adds up to $7,890. With this, the difference in price is now $33,610. Of course, homeowners can opt not to have the OCS but this means their renovation cost will be higher.

The OCS is far from a complete renovation, even if you opt for it. It does not include essential renovation work such as lighting, grills, kitchen cabinet and appliances. This means you will still need to spend more on your BTO renovation. In contrast, resale flat comes with the renovation work that you may already need, thus potentially reducing the cost of your renovation.

That said, renovation is mostly a personal preference and if you buy a poorly maintained resale flat, you will still need to incur significant amount of money with renovation work. Also, most homeowners would prefer just taking the cost difference of $33,610 (or more) between a resale and a BTO flat, and to do their own renovation.

However, if you find a well-maintained resale flat that you like, you may incur minimal renovation costs. Savvy home sellers may also expect a higher price for their well-maintained homes as it’s like to fetch a higher demand.

A BTO Flat Is Still Cheaper As Long As You Don’t Intend To Rent During The Waiting Period

To end off, it appears that HDB does sell BTO flats at a substantial enough discount such that even after we include resale housing grants for first-timers, the BTO flats are still going to be cheaper. However, the difference is not as significant as some people may expect, once resale housing grants are included. Ideally, you want to be able to tap on the Proximity Housing Grant, which would give you $20,000 or $30,000 more in grants. However, this means you must find a resale flat within 4km of where your parents live.

In addition, with all other things being equal, your BTO flat is likely to better retain its value as compared to resale flats. This is because if you sell it after the 5-year MOP, you will still have a 94-lease remaining on your flat, which makes it more attractive for future home buyers looking to buy resale flats.

Assuming you are satisfied with the location, the down side here for BTO flats is the wait. If you are intending to rent elsewhere during the 3 to 5 years waiting period when the flats are being constructed, then your rental cost will easily exceed the savings that you are getting in the first place. In such circumstances, you may be better off just searching and buying the right resale flat instead, and to tap on resale housing grants that you are eligible for.

Read Also: Buying A Resale Flat? Here Are 8 Things To Consider When Choosing Which Unit To Buy aims to provide interesting, bite-sized and relevant financial articles.

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