First-time home buyers are often confused by the distinction between BTOs, ECs, and full fledged private condos. Each have their pros and cons, and your income level is also a big concern. Here are the key differences every Singaporean should know:
– Built-to-Order (BTO) flats are also known colloquially as “new flats”. BTO flats are HDB properties. Note that, as HDB properties, they can never be sold to foreigners or to companies.
– There is an income ceiling when buying HDB flats. If the combined monthly income of the borrowers exceeds this ceiling, they are not eligible. The income ceilings are:
2-room flats: $6,000 ($12,000 for elderly buyers, who are purchasing 2-room flexi-flats)
3-room flats: Usually $6,000, but is sometimes capped at $12,000 for select projects
4-room or bigger: $12,000
For multi-generational (3G) flats, the income ceiling is 1.5 times higher (generally S$18,000).
- HDB flats have communal rather than private facilities. For example, there’s usually a communal garden, and a work-out corner for residents.
- Newer BTO flats may not have an individual rubbish chute in each unit (varies based on project).
- You can get CPF Housing Grants for BTO flats. See here to find out what you qualify for.
- You have the choice to use either the HDB loan or a private bank loan. The main difference here is that, if you use the HDB loan, you will make a smaller down payment: 10 per cent of the property value, which can fully be drawn from your CPF. A bank loan requires a 20 per cent down payment, of which five per cent must be in cash (the rest can come from your CPF).
- BTO flats may require more extensive renovations when moving in. This includes installation of air-conditioning, or kitchen facilities. All things being equal (i.e. if you also use basic renovations for your EC or private condo), the BTO may cost more to renovate.
- BTOs are cheaper overall than ECs or private properties. 5-room BTOs are often between $500,000 to $600,000 before subsidies, whereas 4-room flats are around $300,000 to $350,000. 3-room flats range from $170,000 to $250,000. But these prices may differ significantly based on location.
- BTO flats come with a five-year Minimum Occupancy Period (MOP), before you can sell or let out the entire flat.
- Service and Conservancy Charges are very low, up to $80 a month even for five-room flats.
- ECs are full suite condos, meaning they come with private facilities like a pool, a gym, and 24-hour security.
- ECs are built and marketed by private developers, not by HDB.
- ECs are HDB properties for 10 years. After that, they count as private properties. They can then be sold to foreigners or companies.
- ECs have a higher income ceiling of $14,000.
- You can get CPF Housing Grants for ECs.
- You must use a bank loan for ECs
- Maintenance fees are on par with private condos, so don’t be surprised if it reaches $250 a month or more.
- Renovations for a new EC can be cheaper and quicker, if you keep things basic. They tend to come with features like air-conditioning already installed.
- ECs are a “sandwich class” property, which generally cost more than BTOs but not more than private properties. Expect prices to be in the range of $800,000 before subsidies.
- There is still a five-year MOP for ECs.
- Check out 2018’s only EC launch Rivercove Residences which is set to come onto the market on 1 April 2018!
- As with ECs, these are full suite condos built and marketed by private developers.
- Private properties can be sold to foreigners and companies at will; they are not subject to the usual HDB restrictions. There is also no Minimum Occupancy Period – you and buy it and start renting it out straight away if you want.
- You must use a bank loan for private properties.
- There are no government subsidies for private property (i.e. no CPF housing grants).
- As with ECs, you seldom need to do extensive renovations; with few exceptions, private condos are sold with all the kitchen facilities, air-con, shelving, etc. Some are also sold fully furnished, as an option.
- Maintenance fees are high, compared to BTO properties. Many private condos, like ECs, have maintenance fees of around $250 a month. However, some private condos – such as luxury developments with concierge services – can have maintenance costs that hit four digit figures every month (but you usually only find these in Orchard-road type properties).
- Note that most developers of private condos expect you to be able to afford a car. Private properties tend to be further away from MRT stations and bus stops than BTO flats (but not always).
- Most mass market, suburban condos will cost between $1 to $1.6 million. More centrally located condos can cost between $2 million to $3 million. As for luxury areas like Orchard and Sentosa, we don’t need to tell you but prices can be as high as the developer wants.