New HDB flat or old HDB flat

Getting a HDB flat remains attractive especially for younger generations who are planning to start a family. In addition, there are many Singapore affordable HDB flats for those who are interested in buying. Are you thinking of buying a HDB flat but could not decide between getting a newer HDB flat or an older HDB flat? There are articles out there on the things that you need to know before buying a resale flat and whether to buy a new HDB flat or an old HDB flat. Now let us weigh out the pros and cons of buying a new HDB flat than an old HDB flat. 

First of all, new flats are definitely easier to get sold out as compared to older flats in Singapore. Pretty sure at some point in your life you will have thousands of reasons that you will come up with to get your HDB flat sold. Be it deciding to start having a lovely family and realize that you need a bigger HDB flat with bigger space for your children or one day you realize that you need to upgrade your HDB flat to another HDB flat that is closer to your workplace, or maybe just one day you are finally financially capable of living a Singaporean’s desire of staying in a condominium, or you realize that you have only lesser than a decade left for your current lease and you need to sell your HDB flat before the value of your property plunges. 

Most people in Singapore nowadays still continue to pay a ridiculously high price for an old HDB flat in a prime location, however, the government authority has given out warnings to warn Singapore home buyers to not assume their flats will be selected for the Selective En bloc Redevelopment Scheme (Sers) when the lease runs out. Therefore, it is obvious that the government authority has the intentions to allow HDB leases to expire and they are planning to take the HDB flats from the owners without giving any forms of repayment or reimbursing the owners with new HDB flats. Hence, it is most probably that older HDB flats are going to be difficult to sell as compared to newer HDB flats, especially when the values of old HDB flats fall drastically after a definite age. 

Secondly, remember that new flats are definitely better as retirement benefits and advantages in Singapore. As mentioned above, older HDB flats are generally much harder to sell than newer HDB flats. So if you are planning to sell off your HDB flats for your retirement, buying a new HDB flat is definitely a wiser choice as it is easier to sell a new HDB flat than to sell an HDB flat that has got only 30 years of lease left. 

In addition, you get to participate in Government schemes that is planned to assist you to tackle the value of your property as to retire more easily with a newer HDB flat as compared to owning an older HDB flat. A newer flat definitely has its value greater and better and ensure you with a better price when you decide to sell it. It can also be used to pool your retirement plan by participating in the Lease Buyback Scheme where you are allowed to sell off some years of your remaining HDB flat lease in order to change into cash to prepare you for your retirement. This, of course, is a win-win situation for people that opt to stay in the same HDB flat for their remaining time rather than selling or downgrading their HDB flats. However, this scheme is only applicable to smaller HDB flats or HDB flats with 4 bedrooms. As for owners with big flats, they can opt for the Silver Housing Bonus, where it allows owners to trade in their flats for a smaller sized and more affordable flat and use the money from the sales to top up their CPF Retirement Account. This is definitely a good choice as the scheme allows owners to be given as much as $20,000 worth of cash bonuses. 

Lastly, with newer flats, it makes your housing grants work better. Although the time waiting for a BTO flat to finish building takes years, many Singaporeans still choose to wait for the BTO flats to be built than to buy resale old HDB flats. This is simply because BTO flats are so much cheaper, up to even 40% cheaper, as compared to other properties in the similar estate, albeit slightly smaller in size. Moreover, buyers also stand a chance to be qualified for more CPF Housing Grants by applying for a flat in a non-mature estate. This is simply because the Special Housing Grant certainly does not work for flats that are located in the prime area, where older HDB flats are situated at. 

In conclusion, think about the disadvantage that you will be facing if you were to live in that older HDB flat and all the advantages of buying a new HDB flat. That being said, buying a newer HDB flat definitely has more pros than cons as compared to buying an old HDB flat. 

1 comment

Radhia Razali said...

nice info..thanks for this sharing