The Housing & Development Board's latest Build-To-Order (BTO) sales launch offers Singaporeans an exciting opportunity to purchase a new HDB flat. Because purchasing a home is one of the most significant investments that most individuals will make in their lifetime, it is important to make a well informed decision. The August sales launch includes a total of 4,375 Build-To-Order (BTO) units in Punggol and Yishun. The new developments are called Punggol Point Cove, Punggol Point Woods, Melody Spring @ Yishun and Yishun Glen. There are a range of sizes available among these developments, from 2-room to 5-room or 3Gen flats. Additionally, flats from this sales launch are expected to be completed by late 2022 and 2023. With that in mind, we analysed the BTO launch in order to help prospective home buyers understand the sales launch before potentially buying their first home.
Pricing: Where Is the Best Deal?
Naturally, the cost of BTO units is dictated by the size of the apartment. For example, 2-room flats will start at approximately S$75,000, while 5-room units may cost as much as S$489,000. Prices are likely to also vary based on a number of factors like views, floor area and additional features such as cabinets, vinyl flooring or balconies. To help compare the relative cost of new units, we've estimated the price per floor area based on data published by the Housing & Development Board. In general, smaller flats tended to fetch a lower price per square meter.
Additionally, the new BTO flats in Yishun tend to be less expensive than those in Punggol, which could make them a good option for first-time home buyers that are on a tight budget. With that said, data from the Housing & Development Board suggests that BTO units in both neighborhoods will be significantly cheaper than comparable resale HDB flats available in their respective neighborhoods. Additionally, some of the Punggol flats will be located near the water and have sea views. Finally, Punggol is one of Singapore's safer neighborhoods, as it ranked 12th in our study of the island's safest neighborhoods. Both of these factors may make Punggol worth its more expensive price tag to some prospective home buyers.
How to Pay for Your New Home
Despite the fact that these BTO units may be more affordable than other housing options in Singapore, many first-time home buyers will still not have enough money to cover the entire cost of a new home. Thankfully, there are several options to make purchasing a BTO flat affordable.
CPF Housing Grants
First of all, the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG) can provide first-time home buyers up to S$80,000 of financial aid depending on their income. For more information, visit the Housing & Development Board's CPF Housing Grants page.
If grants aren't enough to help you easily afford your home purchase, you may be interested in other financing options. The Housing & Development Board and many banks in Singapore offer loans that can be used to pay for BTO units. When comparing different loans, it is important to consider the total interest cost as well as the estimated monthly payments in order to ensure that you will be able to afford your home loan. Finally, it is important to note that first-time home buyers using bank loans must now make a down payment of 25%, as the LTV requirement was lowered from 75% from 80%. To compare the best rates from private lenders and to calculate your estimated monthly payments, you can use our home loan calculator tool. In general, you want to go for a fixed rate loan, since the market interest rates are expected to rise significantly over the next few years as the US Federal Reserve continues its rate hikes.
When & How to Apply
Applicants must apply online by 11:59pm on Monday September 3, 2018. Applications are approved by a computer ballot, and are not accepted on a first-come, first-served basis, which means that interested individuals should not be deterred from applying closer to the deadline.
This article was originally published on ValuePenguin Singapore.