This story is republished with permission from DollarsAndSense
 While there is no denying that sizes of flats have shrunk in recent years, we think the layout of today’s HDB flats is far superior to flats from earlier generations. Photo: Lian Beng Group
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We think getting a BTO flat makes sense for many young couples. Here are some advantages that we would like to highlight.
(1) Optimal Flat Layout
It is common to hear Singaporeans complain about how small flats are these days. And while there is no denying that sizes of flats have shrunk in recent years, we think the layout of today’s HDB flats is far superior to flats from earlier generations.
For example, a fair bit of the size reduction we see in today’s HDB flat is due to the smaller kitchen and absence of a balcony. Flats these days also have the living and dining area beside the kitchen, with a small walkway separating the bedrooms. In our opinion, the layout in today’s HDB flat is a lot more efficient.
(2) Longer Lease
BTO flats come with a fresh 99-year lease. In contrast, older flats built in the 80s may have less than 70 years remaining on its lease.
From an investment perspective, it is better to have a longer lease on your home. The reason is simple, if you buy a flat that currently only has 70 years remaining on the lease, this would be down to 50 years in 20 years time. And with a lease that is lesser than 50 years, you may start to see your flat value decrease rather quickly.
In contrast, a fresh 99-year lease means you not only retain the value of the home for many years to come, but will also be able to pass it down to your children.
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"These homes are likely to cost you much more than what you read about online.” |
(3) Cheaper Renovation Cost
Generally speaking, BTO flats cost less to renovate compared to their counterparts in the resale market. That is because there is less hacking required to be done for existing walls, tiles and built-in cabinets.
When renovating a flat, there are many cost items to take note of. Do not be fooled by the numerous articles trending on social media promising you your dream home for less than $30,000. These homes are likely to cost you much more than what you read about online.
(4) Lower Price
BTO flats are priced by HDB such that they are cheaper than older resale flats in a similar area. For example, in the recent February 2016 BTO launch, a 4-room flat at Sengkang would cost about $300,000. In the resale market, the medium price of a 4-room flat at Sengkang is currently $410,000.
Aside from having a much lower sales price, buyers also save more money in the future. This is because they will incur lower interest cost in the long run as their housing loan would be smaller. It also means they will have more money in the future that can be used for investments.
The difference in price can potentially add up to a lot in the long-term. We encourage you to look beyond just the selling price of the flat when buying your flat.
(5) Enjoy Government Grants
In the past couple of years, the government has introduced and enhanced a host of grants that first-time homebuyer can tap on. There is absolutely no reason why you shouldn’t take full advantage of them.
| ♦ Grants for first-time homebuyers |
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The enhanced SHG of up to $40,000 aims to further help lower- to middle-income first-time homebuyers earning up to $8,500 purchase a new flat from HDB (up to 4-room) in the non-mature estates. |
In conclusion, we believe buying a BTO flat in Singapore does bring with it many advantages to homeowners, with the most important being the fact that you actually have a place you can call home.
