For many Singaporeans, their first property purchase is an HDB flat, and for most, it’s also their very first step into real estate investment. While HDBs are primarily seen as homes, the choice between a Build-To-Order (BTO) flat and a resale flat can have a significant impact on long-term returns, cash flow, and upgrade opportunities.

With different price points, waiting times, and investment potential, understanding the key differences between BTO and resale flats is crucial for making a smarter property investment decision in Singapore.

What is the difference between a BTO and a Resale Flat?

When it comes to HDBs, Singaporeans have two ways of getting themselves a HDB for themselves, either through the lengthy process of queuing and applying for a BTO flat, or by going down with the pricer route of purchasing existing HDB flats that have already passed their MOP periods.

Build-To-Order (BTO)

A BTO flat is a brand-new HDB unit sold directly by the government. Buyers apply during launch exercises and typically wait 3 to 4 years for construction to complete before collecting keys. BTO flats are heavily subsidised and come with a fresh 99-year lease, making them attractive for first-time homeowners.

Resale Flat

A resale flat is an existing HDB unit sold on the open market. These flats have already passed their MOP and can be moved into almost immediately. Buyers have more flexibility in terms of location, flat type, and size, but resale flats generally come with a higher price tag and an older remaining lease.

But from these two options, which one is the most sensible choice for an investment in the Singaporean real estate market.

So what's the difference between Build To Order and Resale flats?

Price
Waiting time
Lease length
Rental potential
Flexibility for upgrading
Investment strategy

Although both can be viable investment options, each requires a very different mindset and planning approach.

Why are HDBs popular for real estate investment?

HDBs remain one of the most popular entry points into real estate investment in Singapore due to:

Government regulation that stabilises prices
Strong local demand from homeowners and tenants
Grants and subsidies that lower entry costs
Long-term capital appreciation in well-located estates

When planned properly, an HDB can act as a wealth-building asset, whether through capital gains, rental yield, or as a stepping stone to private property.

Which is the more sensible choice?

Now if you’re going for a new home the sensible choice is to go for the newer, and cheaper option right?

Well not exactly, it really depends on a multitude of factors that will shape the “best choice” for your overall real estate investment strategy when getting your HDB:

Price Difference

Generally, BTO flats are significantly more affordable than resale flats due to government subsidies. This lower entry price reduces financial strain and allows buyers to allocate funds elsewhere, such as investments or renovations.

Resale flats, on the other hand, usually command a premium, especially in mature locations and estates, but that premium often reflects location, convenience, and immediate usability, making it a much more attractive option for many families.

Opportunity Cost

if you were to take into account the opportunity cost into the calculation, it gets a little more complicated. Depending on which area and type of unit , a standard BTO unit will have a minimum 5 year MOP with some units having up to a 10 year MOP, adding on the 3 to 4 years that it usually takes a BTO to be fully built and getting your keys.

Meaning it could take 10 to 14 years or even more before you can sell your BTO unit, potentially preventing you from upgrading and being much more flexible to capitalise on the market that may arise earlier.

Resale flats, however, allow buyers to rent out immediately when subject the regulations, helping the owner with the home mortgage, having a lower duration to sell after fulfilling MOP, providing greater flexibility to sell, upgrade, or restructure their portfolio when market conditions change

Eligibility

Whilst waiting for their perfect BTO to be completed, there are cases where some households may then exceed the BTO income ceiling during the waiting period, which could affect their eligibility for grants or future applications in getting their own HDB.

This uncertainty does not apply to resale flats, which have fewer income restrictions and provide more certainty for planning purposes. Meaning after purchasing a HDB you can still own your HDB.

Grants and Subsidies

BTO flats enjoy the highest level of government subsidies
Resale flats still qualify for CPF housing grants, especially for first-time buyers, though the amounts are typically lower

While grants reduce entry cost, investors should focus on overall returns, not just upfront savings.

Housing Conditions and Renovations

BTO flats require minimal renovation but offer limited customisation initially
Resale flats may require higher renovation costs, especially older units, but provide opportunities to add value through renovation, which can enhance rental yield and resale value

Which should you pick for Real Estate Investment?

Go with BTO because:

Lowest Entry price
Heavily subsidized by the government
New 99-year lease
Historically, can be sold for a significant profit after the MOP duration

But:

Very long holding period (5 Years MOP + 3-4 Years before key collection)
Cannot rent out the whole unit during MOP

When it comes to real estate investment, either option is considered the right choice but generally, if you have a lower appetite for risk and are looking for a long term investment, BTO will be a better choice for you, but is less flexible and requires a greater deal of patience before being able to cash out your investments.

Go with Resale because:

Immediate rental income
Targeting the rental yield and re-sale value
More options for mature and prime locations

But:

Its has a higher purchase price
Renovation costs can be high
Older lease may affect long-term value

But if you want to maximize returns from your real estate investments, thanks to its greater deal of existing options and having less restrictions, Resale units may be a much better option for you.

Still Undecided?

There is no one-size-fits-all answer. The most sensible choice is the one that fits your personal goals, financial situation, and risk appetite.

Depending on going BTO or for resale flats, you should understand your own goals:

Your cash flow
Upgrade timeline
Long-term real estate investment strategy

Don’t leave your property decisions to chance. Schedule a personalized consultation today with David & Audrie and discover how strategic real estate planning can turn your property dreams into a lasting legacy.

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BTO vs Resale: Which Makes More Sense for Real Estate Investment?