The supply of HDB BTO apartments in Singapore has seen a significant uptick in recent years. In 2022, approximately 23,000 HDB BTO flats will be launched in the city-state. At the time of writing, these units are earmarked for several popular locations such as Jurong West, Bukit Merah, Toa Payoh, and Yishun. This means that if you are considering buying, now is the time to start shopping around.
But what do Singaporeans need to consider before booking a new HDB BTO? What does the application process look like? How much up-front cash do you need? And how do you decide which BTO projects are best suited to you? In this article, Loan Advisor answers all these questions and more.
BTO Flats in a Nutshell
BTO or “Build to Order” flats consistently make headlines year after year, as Singapore’s Housing Development Board (HDB) unveils much-anticipated plans for new projects on existing and future BTO sites. But what exactly is a BTO flat? And how do these launches work?
What is a BTO?
In short, a BTO unit is a “build to order” housing project whereby Singapore citizens have the opportunity to reserve an apartment in a prime location before it has actually been built. Under the latest HDB rules, BTO apartments will not be constructed until 65 to 70% of the apartments planned for that particular location have been “booked” – the name given to the process of reserving your desired unit.
Typically, HDB flats under the BTO scheme come in five variations, which are as follows:
- 2-room BTO
- 3-room BTO
- 4-room BTO
- 5-room BTO
- Studio apartment BTO
Each year, HDB will unveil plans of new BTO projects in highly-desirable locations, giving Singaporeans the chance to book their favorite units ahead of time. These locations can include both mature estates in established areas with existing amenities, and non-mature estates, or up-and-coming areas that are still undergoing development. Details are usually released regarding the rough location of the new flats, what amenities and transport options are likely to be nearby, and so on – inviting citizens to join a balloting process with a view to book.
Once HDB receives enough applicants, the project will typically take around three to four years to complete. Applicants will also be able to choose whether they require home design features under the Universal Design (UD) and Optional Component Scheme (OCS), which offer the following:
- Universal Design (UD): Convenient and safe features for elderly and aging citizens, such as ramps, link bridges and handicap lots.
- Optional Component Scheme (OCS): Opt-in upgrades such as floor finishes, sanitary fittings, kitchens, and partition walls.
BTO 2022 Considerations
From financing your BTO flat from the outset to understanding your longer-term commitments and the expected living costs within your BTO projects neighborhood, there is a lot to think about before booking an HDB BTO. let us break down the key considerations:
Costs and Financing
The purchase price or average cost of a BTO can vary considerably, depending on the following factors:
- The desirability of the flat’s location
- Its proximity to the CBD, MRT stations, other public transport options
- Demand and fluctuations in the HDB BTO market
- Whether the project is located on a mature estate or non-mature estate
- Schools, shopping malls and other amenities in walking distance in the immediate area
let us look at some of the anticipated costs for HDB’s next up-and-coming development, which is currently scheduled for the first quarter of 2022:
|BTO Type / Size||No. of Units Available |
|Estimated Purchase Price |
|2 (Flexi), 3 and 4 room flats |
|440||$390,000 to $460,000 (3 room) |
$580,000 to $680,000 (4 room)
|Kallang Whampoa |
|3 and 4 room units |
|390||$390,000 to $450,000 (3 room) |
$550,000 to $650,000 (4 room)
|2 (Flexi), 3, 4 and 5 room flats |
|1,830||$190,000 to $250,000 (3 room) |
$300,000 to $380,000 (4 room)
$400,000 to $500,000 (5 room)
|2 (Flexi), 3, 4 and 5 room flats |
|1,270||$220,000 to $260,000 (3 room) |
$300,000 to $400,000 (4 room)
$420,000 to $520,000 (5 room)
Assuming you are purchasing your HDB BTO using a mortgage, HDB loan or bank loan, you will need to pay an initial downpayment, which can vary anywhere between 15% to 20% of the purchase price for your BTO. The type of loan you are using and the loan to value ratio you are borrowing could affect your downpayment cost, as well as when exactly you will need to make this downpayment. let us take a brief look at how this works:
|Type of Loan |
|Downpayment||When to Pay||Can Your CPF Savings Be Used? |
|HDB Loan |
|15% downpayment||During the signing of your lease agreement |
(Or 5% during the signing of the lease agreement and 10% at the point of key collection if using the Staggered Downpayment Scheme)
|Yes, you can pay with your CPF-OA, in cash, or using a mix of both|
|Bank Loan (up to 75% of the purchase price) |
|20% downpayment||Dependent on your bank’s terms and conditions |
|Yes, you can pay in cash, via CPF or using a mixture of both – but at least 5% must be paid in cash |
|Bank Loan (up to 55% loan to value) |
|20% downpayment||Dependent on your bank’s terms and conditions |
(Usually at least 25% must be paid upon key collection)
|Yes, you can pay in cash, via CPF or using a mixture of both |
As you can see, it is usually possible to use your CPF Ordinary Account balance to put toward the purchase cost of your HDB BTO – which is great news for anyone who has been saving. That said, there are important rules with some loans that will require you to pay a certain percentage or the purchase price in cash.
If bank loans or HDB loans do not feel like a good fit for you, it might be worth considering a loan from a licensed money lender instead. These types of loans usually come with faster approvals – and you can compare them in a matter of minutes using Loan Advisor’s loan comparison tool, too!
Another thing you will want to be aware of is that buying a BTO flat is a long-term commitment and is governed by very different rules to buying a resale flat, executive condominium or other types of property.
It is important to take into account that you will need to wait between 2.5 and 4 years for your unit to be built. You will also need to abide by HDB’s Minimum Occupation Period rules – which require you to live in the property for a minimum of five years. This means that, in total, you will need to wait at least 7.5 to 9 years before you can legally sell your flat to someone else or rent it out to a tenant.
For this reason, getting the location of your HDB BTO right is of paramount importance. We would strongly recommend that you:
- Research upcoming BTO launches
There are currently two prominent BTO launches scheduled for 2022. The February 2022 launch will see new flats unveiled at mature and non-mature sites in Geylang, Kallang Whampoa, Yishun and Tengah. A second BTO launch is then scheduled for May 2022 covering Bukit Merah, Jurong West, Queenstown, Tampines, Yishun and Toa Payoh.
- Evaluate the potential of each location
It is absolutely essential that your preferred location offers easy access to your place of work. Bonus points go to any mature sites that have established MRT stations, shops, and amenities within walking distance or in nearby areas.
- Consider CBD and local school proximity
Flats located close to the CBD will always be deemed more desirable – as will those that have good schools within walking distance. Sometimes, non-mature estates might even be a better option than mature sites if the location will ultimately be more suitable for your work, shopping, and schooling needs.
Living Costs and Expenses in the Area Chosen
Just as you will want to weigh up the amenities in your desired area, you will also want to think about living costs. It is important to ensure you adequately budget for all your expenses, including:
- Loan or mortgage payments, which are usually due monthly
- Other costs when purchasing the flat, such as stamp duty and legal fees
- Lifestyle changes when adapting to the new area, such as commuting costs
- Furniture and renovation costs
You should also consider how much housing loan you require, whether you can use CPF or cash savings to put toward your purchase, and whether you might need a renovation loan or personal loan to assist with any works needed inside the property after you move in.
Getting your own BTO Flat
It is not quite as simple as just calculating your budget, paying your downpayment, and moving into your new BTO flat. As we mentioned earlier, you will need to “book” your desired unit at an early stage and follow HDB’s public housing application process long before you can sort out your finances and get your hands on those keys. Here’s all you need to know about the application process:
Step 1 – Make Sure You are Eligible
Once you’ve settled on a new flats location that suits you, It is vital you check with HDB to ensure that you are 100% eligible to book your unit. Different types of new flats, such as BTOs, resale flat units and executive condominium real estate, will have different eligibility requirements – so make sure you tick all the right boxes to apply for your desired property type.
Step 2 – Start the Balloting Process
The balloting process, which you will need to take part in to book your desired flat, typically takes around one month to complete. So, start by looking at new flats in your desired area online, then ballot for it with HDB here and you can expect to wait around one month to find out whether your ballot was successful.
Step 3 – Get Your Hands on an HLE or AIP Letter
If you are funding your BTO purchase via an HDB loan, you will need an HDB Loan Eligibility (HLE) letter. If you are relying on a bank loan or mortgage instead, an Approval-in-Principle (AIP) letter from your lender will suffice.
Step 4 – Accept HDB’s Invite and Pay Your OTP
If your ballot goes through and you can book your HDB BTO, you will be invited by HDB to move through to the next stage – which requires paying an Option-to-Purchase (OTP) fee to proceed with your property purchase transaction.
Step 5 – Sign Your Lease Agreement
Next, you will need to formally sign your lease agreement and pay any other outstanding fees, including stamp duty and legal fees.
Step 6 – Collect Your Keys and Move In
Finally, you will be able to collect your keys and pay any remaining monies not already transferred at the point you signed your lease agreement.
Eligibility Criteria – A Closer Look
So, the step-by-step application process seems simple enough, but let us take a closer look at what you will need to be deemed eligible for a BTO Flat. Generally speaking, you will need to be either:
- A Singapore Citizen applying with at least one other Citizen or Permanent Resident as a family (i.e., spouse and children)
- Prepared to register your marriage (if you are applying with a fiancé and seeking a CPF Housing Grant)
- A Singapore Citizen with a non-citizen spouse who holds a Work Pass or Visit Pass (if applying for 2-room flats on non-mature estates)
- A single Singapore Citizen aged 35 or more (again, only if applying for 2-room flats on non-mature sites)
- A single Singapore Citizen aged 35 or more applying with up to three further SC/PR co-applicants
On top of this, you will also be expected to be earning under a certain amount per annum. Before you can be deemed eligible, you will usually need a maximum income ceiling of no more than:
- $7,000 to $14,000 for a 2-room flexi flat or 3-room flat
- $14,000 to $21,000 for a 4-room flat or larger
That said, some individual projects may specify their own unique income ceiling, so you should always check with HDB on a project-by-project basis.
Whether you are applying for a BTO Unit in a public housing project in Jurong West, Bukit Merah, Toa Payoh or elsewhere, there are several things you will need to be aware of. Before you start that all-important balloting process, do not forget:
- You will need to determine your eligibility and follow the six-step application process we outlined earlier before you can get your keys.
- It could take anywhere up to four years for your BTO project to be completed, and work would not start until a large percentage of planned units have been booked.
- The asking price and desirability of new flats can vary considerably depending on location, walking distance to amenities, mature versus non-mature estates, and the gross floor area of the individual flat.
- You must abide by minimum occupancy rules, meaning you will need to think about the long-term implications of buying a BTO before you dive in.
- You will most likely need a home loan, personal loan, HDB loan or other types of finance to assist your purchase – which means shopping around to compare the best loans available.
Loan Advisor is a tried-and-tested financial comparison site that makes it easy for Singaporeans to make smarter financial decisions. If you are looking for a home loan, personal loan, or renovation loan, why not try out our loan comparison service today?