Singapore markets open in 6 hours 14 minutes
  • Straits Times Index

    3,252.37
    -15.17 (-0.46%)
     
  • S&P 500

    3,937.99
    -60.85 (-1.52%)
     
  • Dow

    33,552.85
    -394.25 (-1.16%)
     
  • Nasdaq

    11,026.02
    -213.92 (-1.90%)
     
  • BTC-USD

    16,953.04
    -137.02 (-0.80%)
     
  • CMC Crypto 200

    399.33
    -2.47 (-0.61%)
     
  • FTSE 100

    7,521.39
    -46.15 (-0.61%)
     
  • Gold

    1,768.70
    +1.30 (+0.07%)
     
  • Crude Oil

    73.43
    -3.50 (-4.55%)
     
  • 10-Yr Bond

    3.5570
    -0.0420 (-1.17%)
     
  • Nikkei

    27,885.87
    +65.47 (+0.24%)
     
  • Hang Seng

    19,441.18
    -77.11 (-0.40%)
     
  • FTSE Bursa Malaysia

    1,471.55
    -0.01 (-0.00%)
     
  • Jakarta Composite Index

    6,892.57
    -94.76 (-1.36%)
     
  • PSE Index

    6,674.38
    +232.25 (+3.61%)
     

Why I Picked an SBF over a BTO Flat: 3 Unexpected Benefits of HDB Sale of Balance Flats

Why I Picked an SBF over a BTO Flat: 3 Unexpected Benefits of HDB Sale of Balance Flats
Why I Picked an SBF over a BTO Flat: 3 Unexpected Benefits of HDB Sale of Balance Flats

In Singapore, applying for a Build-to-Order (BTO) flat with your partner is synonymous with getting engaged. Five years ago, I was ready to settle down with my then-boyfriend, now husband, and we veered towards balloting for a BTO flat. However, instead of a BTO flat, I ultimately ended up buying a new HDB flat through the Sale of Balance Flats (SBF) exercise.

Due to their nature of being ‘leftover’ flats from the quarterly BTO launch exercises, SBF flats have garnered a reputation for being units that ‘nobody wants’. But after going through the process, I found this to be untrue as applying for an SBF flat was one of the best decisions I could have made for my homebuying journey.

If you’re not on board with buying a resale flat at the current record-high prices and are looking for an alternative to BTO flats, consider an SBF flat.  Let me share why (and debunk some myths) about the Sale of Balance Flats exercise.

<em>HDB flats in Punggol.</em>
HDB flats in Punggol.

Deciding Between SBF and BTO Launches

Like many young couples, I thought of applying for a BTO flat first in 2017 with my husband. However, every time a BTO exercise came around, we struggled with these concerns:

Unable to Find a Project We Love

BTO launches are very specific. Each time, there are a fixed number of estates, and each project is at a fixed site. This meant that even though there were launches in estates we like, we often did not like the actual BTO site due to reasons like it being far from MRT stations or other amenities.

Long BTO Completion Time

Another issue was the long waiting time for the BTO flats to be completed. Back then, before the COVID-19 pandemic, BTO projects took three to four years to be completed. While this is a far cry from the current waiting times of up to six years, it was still too long to wait because we hoped to settle down in a year or two.

Low Chance of Getting a Unit

At the time (and even now), BTO projects were always grossly oversubscribed. Securing a ballot number would be low, much less being able to choose a desirable unit. The strong likelihood of having our hopes dashed was demoralising.

[ArticleCallout]{ “title”: “BTO Application Rates in 2022 Are High: Here’s How to Improve Your HDB BTO Application Ballot Chances in Singapore”, “excerpt”: “Read more here.”, “link”: “https://www.propertyguru.com.sg/property-guides/hdb-bto-ballot-chances-priority-schemes-31048”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2021/07/bto-application-rate.jpg” } [/ArticleCallout]

Because of the above reasons, we never got around to applying for a BTO flat. After letting several BTO launches pass, we decided to reconsider our options and move things forward.

That’s when we read up about SBF flats and applied for the May 2018 SBF exercise. On our first try, we managed to successfully ballot for a 5-room flat in Punggol.

<em>View from my home of the Punggol Serangoon reservoir.</em>
View from my home of the Punggol Serangoon reservoir.

What I Learned After Applying for SBF

There were many estates available during the exercise, and we applied for Punggol. We decided that it was a good compromise in terms of price and location. And because it was still a developing estate, there were many balance flats available, and we had a better chance of securing a unit.

Unlike BTO launches where you apply for a specific project, SBF launches require you to apply for a flat type within the estate (e.g. 4-room flats in Ang Mo Kio). This could comprise all available ongoing BTO projects within the estate. Only when you secure a ballot number, then you get to decide on which project and unit you want.

That means you can choose from many more HDB estates and BTO launches (as compared to the limited projects released during the quarterly BTO launches). There’s also more information readily available about balance flats and the developments they’re in.

Which brings us to our first pleasant surprise…

1. You Can Choose Your Ideal Completion Time for SBF

Since you get to choose between many past BTO projects, SBF flats may have different estimated dates of completion. For instance, when I successfully got a ballot number for 5-room flats in Punggol, I was able to choose from the many developments in Punggol with 5-room SBF flats.

I whittled down my options to two units: one that was already ready for occupation and another that was eight months away from key collection. Because the latter fit our timeline better, we went with that.

<em>The 5-room flat we chose is very spacious, at 123 sq m.</em>
The 5-room flat we chose is very spacious, at 123 sq m.

This way, we got the best of both worlds: we got the perks of getting a subsidised HDB flat as our first home, and didn’t have to wait years for our home to be built. Having the house ready in eight months gave us enough time to plan our wedding and complete our renovations without a rush. Otherwise, if you’re in urgent need of a home, you can shortlist the units that are already ready. Alternatively, the Open Booking of Flats is also an option.

2. You Can Find Good Units Through SBF Too  

Another observation I had was that there were many ‘good’ units available too. Prior to selecting a flat, I was prepared to pick a home from a pool of flats that bore the brunt of the unpleasant afternoon sun or were on lower floors.

However, when we looked through the available SBF flats, we found many on high floors (eight and up) and with good views of the surrounding greenery. The flat we eventually chose and are now living in enjoys the breeze and features three balconies, all facing the reservoir.

<em>With three balconies, I maintain a ‘garden’ of ornamental plants at home.</em>
With three balconies, I maintain a ‘garden’ of ornamental plants at home.

This is because SBF flats don’t just comprise flats that were not picked – they also consist of flats that were given up by others. People forfeit flats for a myriad of reasons – some break up, others run into unforeseen financial difficulties and have to give up homes in prime locations that were more expensive than they originally budgeted for.

What my living room looks like today.
What my living room looks like today.

3. SBF Flats Are Not Necessarily More Expensive Than BTO Flats

Another myth surrounding SBF flats is that they are more expensive than BTO flats. That is not true: I paid less than $10,000 more than my neighbour, who bought the flat four years before us during the BTO exercise.

How the prices of BTO and SBF flats are determined is unclear. However, we do know that they are Government-subsidised, and much cheaper than resale flats on the open market. Perhaps the difference in price accounts for the change in market prices over the few years since the BTO exercise?

For a quick comparison, let’s take a look at the BTO vs SBF prices in the May 2022 exercise and earlier.

HDB estate

4-room BTO price (May 2022)

4-room BTO price (past launches)

4-room SBF price (May 2022)

Jurong West

From $320,000

From $264,000 (Nov 2021)

From $258,000

Yishun

From $328,000

From $270,000 (Feb 2022)

From $258,000

Toa Payoh

From $420,000

From $466,000 (Nov 2020)

From $236,000

Bukit Merah

From $540,000

From $602,000 (May 2021)

From $388,000

Queenstown

From $511,000

From $540,000 (Aug 2021)

From $331,000

 

[ArticleCallout]{ “title”: “HDB BTO Prices Sorted by Estate and Price of Rooms in Singapore (From 2019 to Aug 2022)”, “excerpt”: “Read more here.”, “link”: “https://www.propertyguru.com.sg/property-guides/ultimate-list-of-bto-flat-prices-54099”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2021/08/BTO-PRICES-KOVAN-WELLSPRING.jpg” } [/ArticleCallout]

As you can see, in many cases, the SBF flat prices are more affordable than the BTO prices during their initial launch.

<em>In the evening, I enjoy a great view of the sunset from my balconies.</em>
In the evening, I enjoy a great view of the sunset from my balconies.

Should You Buy a Sale of Balance Flat (SBF)?

The biggest, most obvious, benefit of opting for an SBF unit is that you can get a brand-new flat from HDB without having to wait years for it to be ready. However, as shared, there were many other less well-known perks of picking an SBF flat over a BTO flat or resale flat.

But don’t take my word for it: depending on your preferences and unique situation, there may be a better option for you.

If you’ve got your heart set on the upcoming SBF launch in November 2022, read about the SBF exercise in this comprehensive article:

[ArticleCallout]{ “title”: “HDB SBF (Sale of Balance Flats) 2022 in Singapore: Everything You Need to Know”, “excerpt”: “Read more here. “, “link”: “https://www.propertyguru.com.sg/property-guides/sale-of-balance-sbf-17667”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2020/01/HDB-s-Sale-of-Balance-Flats-scheme-is-one-of-the-several-public-housing-schemes-offered-by-HDB-1.jpg” } [/ArticleCallout]

Alternatively, compare the various types of sales launches from HDB:

[ArticleCallout]{ “title”: “HDB SBF 2022, Open Booking of Flats and More: Guide to the Different Types of HDB Sales Launches”, “excerpt”: ” Read more here. “, “link”: “https://www.propertyguru.com.sg/property-guides/what-you-need-to-know-hdb-sales-launch-12093”, “image”: “https://img.iproperty.com.my/angel-legacy/1110×624-crop/static/2020/02/BTO-flats-are-not-the-only-flats-available-during-HDB-sales-launches-1.jpg” } [/ArticleCallout]

For more property news, content and resources, check out PropertyGuru’s guides section

Looking for a new home? Head to PropertyGuru to browse the top properties for sale in Singapore

Need help financing your latest property purchase? Let the mortgage experts at PropertyGuru Finance help you find the best deals.  

This article was written by Eugenia Liew. She lives in a cosy HDB flat and continues navigating the property market, hoping to one day own a landed property with a yard for her dogs to play in.

All images belong to the author and should not be used without permission.