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HDB Single Scheme in Singapore: Should You Buy a New Launch HDB BTO or Resale Flat in 2022?
“HDB Single Scheme” or rather, the HDB Single Singapore Citizen Scheme allows unmarried citizens 35 and above to buy an HDB flat on their own.
Regarding public housing, you typically have two options – buying an HDB BTO flat or a resale flat. That’s why hitting 35 can feel like a major milestone for singletons.
At 35, investing for the future, purchasing a home, family planning, retirement planning and others might feel more ‘real’ as your priorities may have changed at this stage of life.
According to the PropertyGuru Singapore Property Market Report Q3 2022, the asking price for HDB resale flats has increased for 16 straight quarters. The unwillingness to wait for BTO flats has led many to opt for resale flats instead. With prices being at an all-time high, buyers are looking for resale flats in neighbourhoods that are more wallet-friendly.
For those looking to establish a cosy bachelor pad or bachelorette, here’s a comparison between the new launch HDB BTO and resale flats.
Buying an HDB BTO Flat vs Resale Flat for Singles in Singapore
Here’s a quick overview of what it’s like to buy an HDB BTO flat or resale flat as a single person in Singapore.
Factors | HDB BTO flat | HDB resale flat |
Buyer age limitations | 35 years old | 35 years old |
Size and flat type | Only 2-room Flexi flats in non-mature estates | No statutory limitations |
Price | More affordable; lower
(Prices are subsidised by HDB, but buyers are limited to 2-room Flexi flats in non-mature estates) | Mid to high
(Buyers buy flats are market rate, can be in mature estates and are not limited by flat type) |
Rental yield | Can only rent out after the 5-year MOP is fulfilled | Can only rent the entire flat out after the 5-year MOP is fulfilled; can rent out rooms after MOP is reached |
Loan amount | Within MSR limit | Within MSR limit |
Government grants available | Yes (up to $40,000): Enhanced CPF Housing grant | Yes (up to $80,000): Singles Grant/CPF Housing Grant for Resale Flats, Enhanced CPF Housing Grant (EHG), and Proximity Housing Grant (PHG) |
5 years | 5 years |
Buying an HDB BTO Flat: Most Affordable Option
Under the HDB Single Scheme, singles above 35 years old are only eligible to apply for 2-room BTO flats in non-mature estates. Given this, the price is typically quite affordable as BTO flats are heavily subsidised and flats in non-mature estates are typically lower. Also, due to their smaller size, new BTO 2-room Flexi flats are also cheaper to renovate and furnish.
[ArticleCallout]{ “title”: “9 HDB Renovation Permits and Guidelines You Need When Renovating Your Home<br><a href=\u0022https://www.propertyguru.com.sg/property-guides/author/editorialsg\u0022></a>”, “excerpt”: “Make sure you apply for them!”, “link”: “https://www.propertyguru.com.sg/property-guides/hdb-renovation-permits-in-singapore-16702”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2020/12/HDB-renovation-permits-and-guidelines.jpg” } [/ArticleCallout]
Moreover, a first-time buyer can tap on the Enhanced CPF Housing Grant (EHG) if eligible. Eligible homebuyers can get up to $40,000 in EHG to pay for their BTO flats.
Singles can apply under the HDB Single Scheme or the Joint Singles Scheme (with up to 3 other singles). As with purchasing all HDB flats, there is also an income ceiling. The income ceiling to apply for a 2-room HDB flat is $7,000.
In terms of rentability, you can only do so after the MOP is fulfilled, as 2-room flats can only be rented out as a whole unit. This makes sense as 2-room flats are comprised of a bedroom, bathroom, a dining/living area and a small kitchen. But also means you cannot rent out any part of the 2-room flat for an income while living in it.
Related article: HDB MOP (Minimum Occupation Period): A Guide for Flat Owners in Singapore (2022)
If you are interested, the upcoming BTO launches in November 2022 in non-mature estates are in Bukit Batok, Tengah, and Yishun. Alternatively, there is also the HDB SBF (Sale of Balance Flats) scheme for buyers who are unable to wait for a BTO flat.
Buying an HDB Resale Flat: More Flat Choices and Potentially More CPF Grants
Alternatively, singles above 35 years old are also eligible to buy flats on the resale market. Unlike buying a BTO flat, this does not come with any restrictions on the size, location or income ceiling.
Related article: 60 Freshly MOP-ed HDB Resale Flats in Singapore to Expect in 2022/2023
[ArticleCallout]{ “title”: “60 Freshly MOP-ed HDB Resale Flats in Singapore to Expect in 2022/2023<br><a href=\u0022https://www.propertyguru.com.sg/property-guides/author/eugenialiew\u0022></a>”, “excerpt”: “For those who want to buy a resale flat with a long remaining lease.”, “link”: “https://www.propertyguru.com.sg/property-guides/mop-hdb-resale-flats-43364”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2021/02/MOP-HDB-flats-2021-.jpg” } [/ArticleCallout]
Since it is a flat on the resale market, the flat would be sold at the market rate which is typically higher than at the BTO price level. As these flats can also be in mature estates, prices may also be higher because of that. Currently, HDB resale flat prices are at a 25-month high.
The trade-off is that you are able to get the flat quickly, and have more options in terms of size and location of your unit. Unlike buying a BTO flat, where you may have to wait between 4 and 4.5 years for the flat to be built and are restricted to 2-room Flexi flats in non-mature estates.
Nevertheless, first-time singles are also eligible to receive first-time housing grants when they buy a resale flat. Apart from the Enhanced CPF Housing Grant (EHG) which provides up to $40,000, you may also be eligible for the CPF Housing Grant for Resale Flats and the Proximity Housing Grant (PHG).
The CPF Housing Grant for Resale Flats or Singles Grant is for applicants under the HDB Single Scheme. The Singles Grant for Singles provides up to $25,000 (for 2-room Flexi to 4-room resale HDB flats) and $20,000 (for 5-room resale HDB flats). Your income ceiling cannot exceed $7,000, but if you are applying with your family or other singles, your income ceiling cannot exceed $14,000.
If your parents either stay with you or are living within a 4km radius of your resale HDB flat, you also qualify for up to $15,000 in Proximity Housing Grants (PHG).
Similarly, you have a MOP of five years before you can sell your HDB flat or rent the property out. If you have purchased a property larger than 2-room, you can rent out rooms in your property for income while continuing to live in it, even during the MOP.
Browse all HDB resale flats for sale on PropertyGuru.
Getting a Home Loan to Pay for Your HDB Flat
In addition to the Total Debt Servicing Ratio (TDSR), a Mortgage Servicing Ratio (MSR) of 30% applies for HDB BTO or resale flats. Set by the Monetary Authority of Singapore (MAS), this caps the borrower’s monthly loan repayment for their property to under 30% of their gross monthly income and any variable income such as from commissions and bonuses or side hustles.
The formula is [Monthly instalments for all property loans] / [Gross monthly income] X 100%. (Although technically, if you’re buying an HDB flat you shouldn’t have more than one property loan.)
If your monthly salary is $3,000 and you get an annual bonus of $3,000, your gross monthly income is $3,125 (because only 70% of the annual bonus will be considered). This means you can only utilise 30% of $3,125 for your home loan, which equates to $937.50.
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For a better understanding, you can use PropertyGuru’s Affordability Calculator or speak to one of our mortgage experts for tailored recommendations for your buying decisions.
Want to save more on your home loan? Compare the best mortgage rates on PropertyGuru Finance, or contact us for more personalised advice and recommendations:
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