Buying an HDB Flat? Here’s How to Decide Between HDB Loans and Bank Loans

A Millennial Mum Shares Her HDB BTO Flat Buying Journey

What You Must Know About Applying for HDB Sale of Balance Flats (SBF)

While the Build-to-Order (BTO) exercise is the most common way for home buyers to purchase a new flat, there are other sales modes for them to consider – one of which is the Sale of Balance Flats (SBF) exercise.

SBF exercises are launched twice a year in May and November, usually together with BTO exercises. You will have to decide which mode you want to buy a flat through – you can only choose one during the same launch.

One of the main reasons why people choose to apply for SBF instead of BTO flats is the relatively shorter waiting time. As its name suggests, many of the flats sold under the SBF exercise are balance flats remaining from earlier BTO sales launches. These units are either undergoing construction, or already completed. While SBF is definitely an option to consider, here are some things to take note before you submit your application.

1. Flat Information Made Available During Sales Launch

SBF comprises a variety of flat types located across different estates. In the last SBF exercise in May 2021, popular estates like Bishan and Bukit Merah were included as well.

Information about the available flats is released during the sales launch. These include the flat type, location and number of units available. Home buyers have a week to make their decision – from selecting a flat to submitting the application for the SBF exercise.

2. Flat Leases Can Vary

While the vast majority of SBF units are new flats left over from previous sales launches, the selection also comprises older flats such as surplus flats from Selective En Bloc Redevelopment Scheme (SERS) projects, and flats repurchased by HDB from previous owners. You’ll need to consider the lease length when choosing to purchase a flat from the SBF exercise.

3. CPF Housing Grants Are Applicable
As with BTO flats, home buyers can enjoy CPF housing grants such as the Enhanced CPF Housing Grant (EHG) of up to $80,000 and the Step-Up CPF Housing Grant of up to $15,000, depending on eligibility. More details on CPF housing grants here.

4. Demand Has Seen an Increase

Application rates have remained high for SBF flats as the shorter waiting time makes them popular among buyers, so do keep that in mind when considering SBF over BTO. As there is usually a smaller number of SBF flats available as well, your chances of successfully applying for a flat will vary.

Should You Opt for SBF? 

The SBF exercise is a good option for home buyers looking to shorten the waiting time for a flat. This sales mode also offers more flexibility in terms of choice, thus suiting home buyers with specific housing needs. However, as SBF exercises are typically open twice a year, home buyers who are unable to wait may want to consider resale flats.

This article was adapted from 99.co, Singapore’s fastest growing property platform for information like resale HDBs for sale and rent in Singapore. Check out the original article here.

Source: mynicehome.gov.sg

A Guide to Prime Location Public Housing (PLH)

A Guide to HDB Flat Priority Schemes

5 Things to Know About the Community Care Apartments

Community Care Apartments (CCA) are public housing jointly developed by the Ministry of National Development (MND), Housing & Development Board (HDB) and Ministry of Health (MOH). The CCA combine senior-friendly housing with care services, offering an option for seniors to age in-place and independently in a community setting.

The first batch of CCA, which will be in Bukit Batok, was launched in February 2021. Seniors can look forward to the second batch of CCAs in Queenstown, to be launched later this year.

If you or your family members are looking to apply for a CCA, here are 5 key things to note.

1.  Wide Range of Facilities and Amenities

The upcoming CCAs will be situated within the Health District @ Queenstown. There, HDB will work with partners to create a built environment conducive for healthy living and active ageing. There will be common facilities such as roof gardens, fitness stations, and community living rooms to promote social interactions between all residents. With Alexandra Hospital nearby, residents will have easy access to healthcare and medical services.

The first batch of CCAs is located at Bukit Batok West Avenue 9, close to parks such as Little Guilin, Bukit Batok Nature Park and Bukit Batok Central Park. Besides shopping malls and wet markets, there are also several healthcare facilities nearby, including Bukit Batok Polyclinic, St. Luke’s Hospital and Ng Teng Fong General Hospital. Within the development, residents have convenient access to an activity centre, a community garden, and fitness stations to maintain an active lifestyle. The CCA development will also house a hawker centre offering a variety of affordable food options.

2. Minimal to No Renovation Required

Interested seniors would be glad to know that little to no renovation is required for these units! Each 32sqm CCA unit adopts an open layout, with sliding partitions to separate the living room and bedroom for greater privacy.

The flat also comes ready with senior-friendly design features and other pre-installed fittings, including:

• Wide wheelchair-friendly main door with a built-in bench at the side
• Large wheelchair-accessible toilet with grab bars and slip-resistant flooring
• Built-in wardrobe and cabinets
• Furnished kitchen (without fridge and washing machine)
• Service yard accessible from toilet, with clothes drying rack

On each floor of the CCA block, there will also be a furnished communal space for residents to mingle, share meals and take part in group activities.

3. Integrated Care Services

Care services are provided at the CCA to meet seniors’ needs, to support independent living within a social setting for an enriching retirement life.

Residents will have to subscribe to a Basic Service Package. The package offers 24-hour emergency monitoring and response, basic health checks, and the service of an on-site community manager who will organise regular activities and programme for the residents. The community manager will also ensure that the following services are provided:

• Care and support services
• Simple home fixes
• Activities at the communal spaces
• Key card access to individual flats

Depending on their needs and preferences, seniors can also choose to add on optional services that cover different activities in day-to-day living.

4. Eligibility Conditions

As the CCA is intended as an affordable housing option for seniors, the applicant(s) and their spouse (if any) must be 65 years old and above. Applicants have the flexibility to choose a lease ranging from 15 to 35 years (in five-year increments), as long as it covers both the applicant and their spouse (if any) until at least 95 years old.

Those who have taken up housing subsidies twice, and have bought a Studio Apartment or short-lease 2-room Flexi flat before are not eligible to purchase a CCA.

Here’s a quick summary of the eligibility conditions:

5. Full Upfront Payment for Flat Purchase

Successful applicants for CCA are required to make full upfront payment for the flat by cash and/or CPF. For the mandatory Basic Service package, applicants can decide to make either full or partial upfront payment in cash, with a monthly fee throughout the lease term.

This is illustrated in the indicative prices for the CCA at Bukit Batok:

Using the 15-year lease tenure as an example, an applicant has 2 payment options.

While both options require full upfront payment of $40,000 for the flat itself, the applicant may choose either to pay $22,000 upfront (Option 1) for the Basic Service Package, or make partial upfront payment of $13,000 (Option 2) with the remaining fees to be paid monthly. If partial payment is chosen, the applicant would have to pay an estimated $50 per month throughout the remaining lease tenure of 15 years.

Another key difference between a CCA unit and other HDB flats is that it cannot be resold or rented out. Owners who do not require the CCA anymore can return it to HDB. They will receive a refund of the value of the remaining lease of the flat.

Source: mynicehome.gov.sg

Why I Won’t Buy a Million-Dollar HDB Flat (and Why You Might)

It’s undeniable that the resale housing market is hotter than it was five years ago.

In the past two years, the prices in the broader HDB resale market have risen steadily. Pandemic-related BTO construction delays are one reason why.

Super low interest rates during the pandemic also drove up demand for homes, as people found it easier to take loans (this happened globally, not just in Singapore).

Another is more flats reaching their MOP, as these newer flats may command higher prices than older flats in the same location.

One phenomenon we’ve noticed is an increasing number of million-dollar HDB flats. Though they are only a fraction of the total HDB transactions, they’ve received a lot of attention.

Many of our readers have asked us whether it’s a good idea to buy these flats.

Here are my thoughts on why I (Ruiming) am strategically not inclined to buy one. And why this might apply to you.

Just to be clear: We’re not saying you SHOULDN’T buy a million-dollar HDB flat.  Some people might have reasons for buying these flats, we’ll explain this later.

What makes a million-dollar flat?

A million-dollar resale HDB flat would typically have a few main qualities that allow it to command its hefty price tag.

The more of these qualities it has, the more likely it’ll reach the magical $1,000,000 price tag and beyond.

Location: The more popular a location, the higher price it will command. An extreme example would be this 43-year-old flat that was sold in Tiong Bahru for 1.1 million dollars in 2020. The buyer thought it was old, but gold.

Size: The larger the flat, the more expensive it will be. This gives flats in less popular areas the ability to command higher prices. The recently sold jumbo flat in Yishun is one example.

Lease: Generally, the newer the flat, the more expensive it will be, and vice versa. The Singapore Land Authority (SLA) has a rough guide known as ‘Bala’s Table’, which kinda shows how property prices are affected by their lease.

Older flats also have a limited pool of buyers, because if the lease of the HDB flat doesn’t last the youngest buyer till 95, there will be limitations on how someone’s CPF can be utilised.

Why is understanding Location, Size and Lease important?

Because these are effectively the trade-offs you have to make if you want to buy a home within your means.

Why you might not want a million-dollar flat

Why?

It’s for the simple reason that more money spent on my home means less money elsewhere.  As the saying goes, every decision for something is a decision against something else.

These are some things I’d keep in mind while buying a home.

Financial security:

Buying an affordable home means financial security during turbulent times.

If history serves as a guide, our adult lives – like our parents’ – will have its share of economic highs and lows. This could mean times of unemployment and uncertainty.

By buying a flat well within your means, you’ll need to worry less about your mortgage in bad times.

While millennials have only known the era of low interest rates, it’s important to remember this isn’t always the case. Singapore Interbank Offered Rate (SIBOR) actually hit interest rates of 3.56% in 2006, and home loans upwards of 7% during the late 1990s.

Case in point: Some readers who’ve signed up for floating mortgages during the pandemic are beginning to worry about interest rate hikes. They should. Paying 3.85% vs 1% interest on a six-digit loan definitely adds up!

Also, despite recent events, it would be wise to remember that prices of HDB flats don’t go up all the time.

From 2013 – 2019, both public and private property prices were on the decline. The same can be said for the late 1997, where the HDB resale index fell by almost 30%, and only recovered in 2008.

Those who’re thinking of treating their flat like an investment, take note!

Don’t pay *too much* for centrality and convenience

“Time is money.

So, if you’re financially savvy, shouldn’t the smart thing be to save time, by living in a mature, central location closer to the CBD?”

This is something people often say to us when we advocate buying a more affordable but less centrally located home.

While I see the logic, perhaps it’s worth considering the following points:

More centrality and convenience always costs more.  This is the same whether you’re in London, Tokyo, Paris, or Melbourne. If you need to spend a lifetime working to pay this difference, it might not be worth paying for.

For example, it might make sense for a couple earning a combined income of $20,000 to buy a $900,000 flat in a central location to save time. They can comfortably afford the payments, and it makes sense to reduce their commute time.

However, if you need to borrow money from your parents, or look for ways to get around the loan limits offered by financial institutions, it’s usually a sign you cannot afford the convenience you desire.

Not all workplaces are in the CBD. There are many smaller commercial centres around the island. Jurong East, Paya Lebar, Changi, One-North etc. Even if you work in the CBD, with flexi-work arrangements you might go into the office less and less.

If you intend to buy a car or a motorcycle/scooter (like many people do), then centrality might not matter as much. You are effectively already paying for convenience when you decide to   own private transportation.

Finally, in places not as well served by public transport, some creativity can go a long way. Speaking from first-hand experience, I’ve found that using a bicycle can often help you get to your destination faster if it’s less than 10 km away. Otherwise, you can still use a bike to cover that last mile to the MRT station.

If you are able to make this lifestyle change and your workplace is supportive, you might not need to fork out hundreds and thousands of dollars for that unit in a central location.

Paying for space you don’t use:

As someone who might not have lots of kids (or even remain child-free), a large flat is wasted on me (and by extension, I’ll be wasting money on a larger flat).

Sure, having more space is always a luxury in land-starved Singapore. Or any city.

The question is whether it makes financial sense.

Don’t get me wrong; I like to have enough personal space. But not at the expense of my freedom to do other things.

For reference: I currently rent a 3-room HDB flat with my girlfriend that’s about 700 sq ft. It’s serviceable, though I certainly could be happier with 900 sq ft.

Do you have enough for other life goals?

A roof over your head is important. But I dare reckon that it won’t be the only aspiration you have in life.

My own personal goals include:

• Experience working overseas at some point in life ($200,000 for living expenses) / be a digital nomad
• Embark on a year-long cycling trip ($100,000)
• Be able to choose to do a job that I like (have a passive income of at least $2,000 a month)

If I spend too much on a house, these goals will remain just that – dreams. Every single extra dollar spent here moves me further away

from reaching these goals.

Mind you, even if you do not know what your other life goals are, I think it doesn’t hurt to be cautious about overpaying for a home. The home you buy can limit the dreams you can chase.

So if you’re considering buying a million-dollar flat, weigh the opportunity costs of spending that sum on housing and ask yourself if you can live with the trade-off.

So why do people buy million-dollar flats?

I’m just going to say it: I think buying a million-dollar flat is a bad idea for the median-income Singaporean because of budget constraints.

That being said, above-median-income Singaporeans do exist. They can afford these expensive flats, and find them attractive despite the price tag.

Consider this: A million dollars for an HDB flat is certainly a lot of money, but to get a condominium of equivalent size at a comparable location will cost at least 3-5 times more!

In such scenarios, buying a million-dollar HDB flat may be more appealing despite the lack of private facilities.

So yes, a 1000-sqft HDB at Pinnacle @ Duxton may set you back a whopping $1.25 million, but the condo alternative for the same neighbourhood, a 1,098 sq ft Wallich Residence condo will cost triple the price at $3.87 million.

A final word about affordability

Yes, there is little question it’s a seller’s market right now. And will be for a while. Be prepared to pay more than pre-pandemic times.

However, what is also true is that there are many choices on the resale market.

The cheapest HDB flat on PropertyGuru is asking for $250,000 as of the writing of this article. The most expensive one? An eye-popping $1.65 million.

Our advice? Calculate what you can afford first above all else. Use your judgement to determine whether the seller’s asking prices are reasonable.

If you want to be extra safe, buy something below your means.

Otherwise, for peace of mind, buy something within your means.

And unless you want to spend the foreseeable future stressing about paying your mortgage, never spend beyond your means.

Stay woke, salaryman

A message from our sponsor, HDB

There are many factors that come into play when looking for a new home – the location, proximity to loved ones and amenities, size and more.

But amongst all of these, affordability is one of the key factors in making a housing decision. After all, housing would likely be one of your first biggest ticket purchases, so it’s important that your future home fits your budget and your needs.

If you’re looking for a new home, check out the guides, articles and resources available on MyNiceHome.

Also, check out past content pieces we’ve developed with HDB to navigate through your home-buying decision:

• The TWS guide to buying your HDB flat
• The case for buying the most affordable home you can

Source: mynicehome.gov.sg

A Single’s Guide to Buying an HDB Flat

Ready to purchase your own home? If you are single, 35 years old and older, you can purchase an HDB flat and may be eligible for housing grants. Here’s a comprehensive guide for singles looking to buy an HDB flat.

BTO Flat

A Build-To-Order (BTO) flat is priced lower than comparable resale flats in the same area, offering an affordable option for home buyers. Singles with a monthly income of $7,000 and below can apply for a 2-room Flexi flat in a non-mature estate, with a full 99-year lease. Depending on their monthly income, they can get up to $40,000 in CPF housing grants.

BTO flats are launched for sale every quarter. You can visit the HDB Flat Portal to check out the upcoming BTO projects and weigh your options. Find out how you can purchase a BTO flat with our step-by-step guide.

Resale Flat

Single Singaporeans aged 35 and above can also buy an HDB resale flat. There is a wide choice of flats with varying leases across towns. There are no income ceiling restriction except if you decide to get an HDB housing loan and/ or apply for CPF housing grants of up to $80,000.

Resale flats can be purchased anytime throughout the year. After finding the resale flat of your choice and negotiating the purchase price with the seller, you will only need to wait about 8 weeks from HDB’s acceptance of your resale application before collecting the keys to your new home.

You can choose to manage your transaction via the HDB Resale Portal or engage the services of an estate agent registered with the Council of Estate Agents.

Other Housing Options

Singles who wish to live on your own but have not met the minimum age criteria of 35 years old to purchase an HDB flat, have the option of renting from the open market. If you’re planning to do so, do take note of the following:

• Request the flat owner to show documentary proof that they own the flat, and HDB’s approval letter to rent out the flat or bedroom
• Refer to CEA’s templates when preparing your tenancy agreement and make sure that you fully understand all the terms and conditions
• Ensure that you are included as an authorised tenant

Source: mynicehome.gov.sg

What Are PPVC Flats?

Short for ‘Prefabricated Prefinished Volumetric Construction’ (a mouthful, we know), PPVC flats are built using technology that will raise construction productivity and help you move into your Build-To-Order (BTO) flat more quickly.

PPVC — Prefabricated Prefinished Volumetric Construction

BTO flats built using PPVC come with floor and wall finishes, internal doors, window frames, sanitary fittings, and a basecoat of paint. With these items provided upfront, you can cut down on renovation works and move into your new home faster. What’s more, these finishes and fittings can be paid for with CPF monies, and/ or your housing loan.

However, if you prefer to choose your own finishes and fittings, you can opt for non-PPVC flats where the Optional Component Scheme (OCS) will still be offered.

Renovating Your PPVC Flat

There is no difference between the renovation works that can be done in a PPVC or non-PPVC unit. As such, there is no need to engage PPVC-certified interior designers and/ or contractors. However, be sure to engage only renovation contractors listed in HDB’s Directory of Renovation Contractors. Contractors must also comply by HDB’s renovation guidelines and requirements, PPVC flat or not. At the same time, make sure you have the renovation permits required before renovating your home!

Some useful renovation guidelines to note:

• Walls – Regardless of whether your flat is a PPVC unit or not, you must obtain a renovation permit for your renovation works where required, including the demolition or alteration of all types of walls or structures. Do ensure your renovation contractor carries out any hacking works only after obtaining HDB’s approval!

• Floor finishes – You are free to change the flooring in most areas of your PPVC flat, subject to guidelines and conditions, such as total thickness of floor finishes. For both PPVC and non-PPVC units, hacking the provided bathroom wall and floor finishes in the first 3 years is not allowed, to protect the waterproofing layer that is between your home and that of your neighbour living one floor below. Instead, new tiles can be laid on top of the original floor finishes.

Moved into your new home? Whether it’s a PPVC flat or not, regular checks and maintenance will help you keep your flat in tip-top condition. From windows, to wall and floor finishes, read our guide on how to care for your HDB flat!

Source: mynicehome.gov.sg