{"id":32076,"date":"2020-03-22T11:00:52","date_gmt":"2020-03-22T03:00:52","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=32076"},"modified":"2023-03-01T11:26:50","modified_gmt":"2023-03-01T03:26:50","slug":"hdb-open-booking-of-flats-vs-resale-cheaper","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/","title":{"rendered":"HDB Open Booking of Flats: Is it better and cheaper than resale?"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p>Okay, so we did our research on HDB&#8217;s new Open Booking of Flats platform to see how it compares to buying a flat from the resale market. We wanted to give you an analysis breaking down the merits of each approach but, frankly, there&#8217;s pretty much nothing about Open Booking of Flats that truly benefits homebuyers, so the short answer to the title question is a big fat <strong>NO<\/strong>.<\/p>\n<p>But if you still want to find out why, read on:<\/p>\n<h2>What is Open Booking of Flats?<\/h2>\n<p>First, a brief background. Much like how condo developers put up yet-to-be-built projects for sale, the Housing &amp; Development Board (HDB) launches thousands of new flats each year that&#8217;ll take an average of 3.5 years to complete. The HDB first sells these flats through wildly popular <a href=\"https:\/\/www.99.co\/singapore\/insider\/buying-a-bto-process-procedures\/\">Build-to-Order (BTO)<\/a> sales exercises, which consists of new HDB projects in 2 &#8211; 5 locations.<\/p>\n<p>During these exercises, BTO flats are typically oversubscribed \u2013 after a balloting and selection process, only a few of them are left over (mainly because of a lack of demand for a particular location or that the <a href=\"https:\/\/www.99.co\/singapore\/insider\/ethnic-integration-policy\/\">ethnic quota is maxed out<\/a>).<\/p>\n<p>These leftover flats, also called &#8216;<a href=\"https:\/\/www.99.co\/singapore\/insider\/sale-of-balance-flats-hdb\/\" target=\"_blank\" rel=\"noopener\">balance flats<\/a>&#8216;, are then pooled together with completed flats repossessed or sold back directly to HDB. Whenever a BTO launch comes around, a concurrent Sale of Balance Flats (SBF) exercise lets applicants ballot for these leftover flats.<\/p>\n<p>Leftover flats from the SBF used to go onto a third ballot exercise called the Re-offer of Balance Flats (ROF), until the latter was scrapped in March 2020 to just let applicants book <del>the damn<\/del> flats on a first-come-first-serve basis through its online Open Booking of Flats portal, which is <a href=\"https:\/\/homes.hdb.gov.sg\/home\/landing\" target=\"_blank\" rel=\"noopener\">now open<\/a>.<\/p>\n<h2>Why the HDB start Open Booking of Flats?<\/h2>\n<p>Previously, those who want to get a flat direct through the ROF instead of the resale market had to wait for a specific twice-a-year window to view available flats and apply, whereas the Open Booking of Flats lets buyers to apply for a new flat all year round.<\/p>\n<p>According to Minister for National Development Lawrence Wong, the Open Booking of Flats allows the earlier release of more balance units to &#8220;enable home-seekers with urgent needs to access flats more quickly&#8221;.<\/p>\n<p>But, in truth, there&#8217;s simply no need to implement a ballot system for leftover HDB flats that can be likened to crumbs on a dinner plate or &#8216;Reduced to Clear&#8217; items in a supermarket.<\/p>\n<figure id=\"attachment_32089\" aria-describedby=\"caption-attachment-32089\" style=\"width: 600px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-32089\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/reduced-to-clear.jpg\" alt=\"\" width=\"600\" height=\"450\" srcset=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/reduced-to-clear.jpg 1024w, https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/reduced-to-clear-380x284.jpg 380w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><figcaption id=\"caption-attachment-32089\" class=\"wp-caption-text\">Please, no.<\/figcaption><\/figure>\n<p>The &#8216;accessing flats more quickly&#8217; argument is also a somewhat dubious one, as applications via Open Booking of Flats entail a waiting period (to sign the Agreement for Lease) of up to four months from your flat selection date.<\/p>\n<p>On the other hand, if you buy a resale HDB flat, the entire process from entering into an Option to Purchase (OTP) to key collection can be done and dusted in two months.<\/p>\n<p>And here&#8217;s the kicker: Even if the flat is a completed unit, HDB doesn&#8217;t allow any in-person viewings of the flat. At best, HDB might include photographs of the unit. If there are no photos, well, you&#8217;re buying blind and hoping for the best, <em>amigo<\/em>.<\/p>\n<p>Compare that to buying a resale flat, where the buyer can organise multiple viewings to suss out the pros and cons of each unit.<\/p>\n<p><strong>Hence, buying a flat from the HDB Open Booking of Flats system is like buying a leftover watermelon at NTUC Fairprice where there&#8217;s an enforced social distancing between you and the said watermelon.<\/strong><\/p>\n<h2><em>Aiyo<\/em>, why liddat say Open Booking of Flats until so poor thing?<\/h2>\n<p>In short, the Open Booking of Flats serves HDB more than it does home buyers\u2060\u2014<em>it&#8217;s HDB&#8217;s last resort to clear its outstanding and repossessed units<\/em>.<\/p>\n<p>Let&#8217;s say you don&#8217;t mind the potentially longer waiting time, and you&#8217;re okay with not viewing the unit because it&#8217;s either under construction or you somehow trust that HDB has done all the necessary checks for the unit to be in saleable condition.<\/p>\n<p>We checked out the selection of flats on the day the portal opened on 25 March 2020, and tallied the flats available for applicants. Here&#8217;s what we found:<\/p>\n<figure id=\"attachment_32083\" aria-describedby=\"caption-attachment-32083\" style=\"width: 400px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-32083\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-statistics-23-march-2020.png\" alt=\"hdb open booking of flats statistics 2020\" width=\"400\" height=\"301\" \/><figcaption id=\"caption-attachment-32083\" class=\"wp-caption-text\">Slim pickings from HDB&#8217;s Open Booking of Flats.<\/figcaption><\/figure>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-32090\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/travolta.gif\" alt=\"\" width=\"426\" height=\"213\" \/><\/p>\n<h2>All right, we get you, but is Open Booking of Flats cheaper than buying HDB resale?<\/h2>\n<p>Ultimately, we wanted to find out whether a balance flat from the Open Booking of Flats portal is cheaper than recently transacted HDB resale flats with the same location and characteristics (e.g. floor level and size).<\/p>\n<p>HDB publishes the price of all units on the Open Booking of Flats portal. For the purpose of comparison, let&#8217;s examine a 3-room, 700 sqft flat in Clementi at <a href=\"https:\/\/www.99.co\/singapore\/sale?listing_type=sale&amp;name=6%20Holland%20Close&amp;query_coords=1.30711568626099%2C103.795264617136&amp;query_type=cluster&amp;query_ids=adaM4xo9dJzD7XNrzKYnVKSm&amp;zoom=15&amp;radius_max=1000&amp;query_limit=radius&amp;property_segments=residential\">6 Holland Close<\/a>, where the Open Booking of Flats portal has listed a (likely repossessed) 13th floor unit at S$319,500.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-32086\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-price-holland-close.png\" alt=\"hdb open booking of flats holland close\" width=\"515\" height=\"272\" \/><\/p>\n<p>Now let&#8217;s head to <a href=\"http:\/\/99.co\">99.co<\/a> and look at transaction data for similar units in the same block (there are two for the same unit type and area in the second half of 2019):<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-32088\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-transaction-history-99-co-holland-close.png\" alt=\"hdb transaction history holland close\" width=\"900\" height=\"173\" srcset=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-transaction-history-99-co-holland-close.png 2050w, https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-transaction-history-99-co-holland-close-1536x296.png 1536w, https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-transaction-history-99-co-holland-close-2048x395.png 2048w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/p>\n<p>Comparing the Open Booking vs Resale transaction prices for flats in the same block, we can see that <strong>already-completed flats on the Open Booking platform can be around 5% cheaper<\/strong> than if the same unit were to be listed in the open market.<\/p>\n<p>Bear in mind that this is a rough gauge and the unit is <strong>typically restored to a condition that will cost serious cash to makeover<\/strong> (<em>see below photo<\/em>), but the discount is a somewhat fair valuation for a unit that has been repossessed.<\/p>\n<p>In this case, HDB is pretty much in the same position as a bank who has foreclosed a home; it just wants to get the property off its books ASAP and is willing to offload it at a discount. The only difference is that HDB sells the unit at a fixed price, whereas the bank sets a Reserve Price and takes the property to auction.<\/p>\n<p>Then again, for <a href=\"https:\/\/www.99.co\/singapore\/insider\/want-to-take-advantage-of-mortgagee-sales-now-might-be-the-time\/\">bank mortgagee sales<\/a> of private property, the prospective bidder can at least view the house in person instead relying on photos!<\/p>\n<figure id=\"attachment_32092\" aria-describedby=\"caption-attachment-32092\" style=\"width: 600px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-32092\" src=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-interior-condition.png\" alt=\"hdb open booking of flats interior condition\" width=\"600\" height=\"377\" \/><figcaption id=\"caption-attachment-32092\" class=\"wp-caption-text\">HDB even goes to the extent of hacking away all existing tiles before putting a flat on the Open Booking platform. Madness. (Source: HDB)<\/figcaption><\/figure>\n<p>For BTO (i.e. uncompleted) flats, the units listed on the Open Booking of Flats platform tend to be ineligible for one or more ethnic groups.<\/p>\n<p>Take for example 3- and 4-room flats in Geylang&#8217;s <a href=\"https:\/\/www.99.co\/singapore\/hdb\/pine-vista-deqLv2qMDjxZF9qUkgGrQe7W\" target=\"_blank\" rel=\"noopener\">Pine Vista<\/a> and <a href=\"https:\/\/www.99.co\/singapore\/hdb\/dakota-breeze-de3Nes23qDVvC9xFa3iMEczg\" target=\"_blank\" rel=\"noopener\">Dakota Breeze<\/a> BTO projects that were launched back in <a href=\"https:\/\/www.99.co\/singapore\/insider\/may-2017-bto-review\/\" target=\"_blank\" rel=\"noopener\">May 2017<\/a>; only those who belong to the Malay ethnic group are eligible to apply for the remainder units listed, because the Chinese and Indian quota has been maxed out.<\/p>\n<p>For these particular uncompleted BTO flats, it is worth nothing they are on average <strong>7 to 10% more expensive than the initial BTO launch price<\/strong>.<\/p>\n<p>There are two key reasons for this price premium: There&#8217;s a shorter waiting time to completion, coupled with the increase in overall HDB resale prices over time.<\/p>\n<p>Enough about the Open Booking of Flats bashing; it seems there is a plus point after all: <em>If the ethnic quota allows, the applicant can access an earlier BTO project they could have missed.<\/em><\/p>\n<p><strong>In any case, if you ask us, we&#8217;d pick HDB resale any day, hands down.<\/strong><\/p>\n<hr \/>\n<h2>Would you ever choose an Open Booking flat over resale? <strong>Let us know in the comments section below.\u00a0<\/strong><\/h2>\n<p>If you found this article helpful, 99.co recommends <a href=\"https:\/\/www.99.co\/singapore\/insider\/my-complete-bto-experience-from-balloting-to-renovation-regrets\/\" target=\"_blank\" rel=\"noopener\">My complete BTO experience: From balloting to renovation regrets<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.99.co\/singapore\/insider\/sale-of-balance-flats-hdb\/\" target=\"_blank\" rel=\"noopener\">What you need to know about HDB&#8217;s Sale of Balance Flats (SBF)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Okay, so we did our research on HDB&#8217;s new Open Booking of Flats platform to see how it compares to buying a flat from the resale market. We wanted to give you an analysis breaking down the merits of each approach but, frankly, there&#8217;s pretty much nothing about Open Booking of Flats that truly benefits&hellip;<\/p>\n","protected":false},"author":59,"featured_media":32093,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","_lmt_disableupdate":"no","_lmt_disable":"no","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[53631,53643,57131],"tags":[54561,53636,55925,53647,54082],"persona":[],"class_list":{"2":"type-post","15":"entry","16":"has-post-thumbnail"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v25.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>HDB Open Booking of Flats: Is it better and cheaper than resale? - 99.co<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HDB Open Booking of Flats: Is it better and cheaper than resale?\" \/>\n<meta property=\"og:description\" content=\"Okay, so we did our research on HDB&#8217;s new Open Booking of Flats platform to see how it compares to buying a flat from the resale market. We wanted to give you an analysis breaking down the merits of each approach but, frankly, there&#8217;s pretty much nothing about Open Booking of Flats that truly benefits&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/99dotco\/\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-22T03:00:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-01T03:26:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-resale-cheaper.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Kyle Leung\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@99dotco\" \/>\n<meta name=\"twitter:site\" content=\"@99dotco\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kyle Leung\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\"},\"author\":{\"name\":\"Kyle Leung\",\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/#\/schema\/person\/8f8c92b21148ef5dd27c9b566ce17c76\"},\"headline\":\"HDB Open Booking of Flats: Is it better and cheaper than resale?\",\"datePublished\":\"2020-03-22T03:00:52+00:00\",\"dateModified\":\"2023-03-01T03:26:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\"},\"wordCount\":1299,\"commentCount\":9,\"publisher\":{\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-resale-cheaper.jpg\",\"keywords\":[\"buying resale\",\"hdb\",\"open booking of flats\",\"resale\",\"Sale of balance flats\"],\"articleSection\":[\"HDB\",\"HDB Resale\",\"Property News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/#respond\"]}],\"copyrightYear\":\"2020\",\"copyrightHolder\":{\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\",\"url\":\"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/\",\"name\":\"HDB Open Booking of Flats: Is it better and cheaper than resale? 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We wanted to give you an analysis breaking down the merits of each approach but, frankly, there&#8217;s pretty much nothing about Open Booking of Flats that truly benefits&hellip;","og_url":"https:\/\/www.99.co\/singapore\/insider\/hdb-open-booking-of-flats-vs-resale-cheaper\/","article_publisher":"https:\/\/www.facebook.com\/99dotco\/","article_published_time":"2020-03-22T03:00:52+00:00","article_modified_time":"2023-03-01T03:26:50+00:00","og_image":[{"width":1200,"height":600,"url":"https:\/\/www.99.co\/singapore\/insider\/wp-content\/uploads\/2020\/03\/hdb-open-booking-of-flats-resale-cheaper.jpg","type":"image\/jpeg"}],"author":"Kyle Leung","twitter_card":"summary_large_image","twitter_creator":"@99dotco","twitter_site":"@99dotco","twitter_misc":{"Written by":"Kyle Leung","Est. reading time":"7 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