It was not too long ago that Heartland Boy participated in a HDB BTO (Housing Development Board Build to Order) sales launch exercise. For the foreign readers who are in unfamiliar territory, this is a public housing system in Singapore that allocates new HDB flats to aspiring home owners. For first-timers, this can be a pretty harrowing and confusing experience. This is especially so when everyone claims to be an “expert” when it comes to property. Over-zealous parents, well-meaning relatives and friends who have gone through this baptism of fire would chip in with their golden nuggets of advice on how to game the HDB BTO process.
For Heartland Boy and Heartland Girl, it was indeed a roller-coaster ride of emotions. Not to exaggerate, tears were shed and fault lines were drawn. These were all unnecessary experiences that Heartland Boy hopes do not happen to other couples out there when shopping for a HDB BTO. Therefore, having emerged better and stronger as a couple from their own HDB BTO purchase process, Heartland Boy wishes to share a few tips for aspiring home owners out there.
Tips on Buying a HDB BTO
Propose As Early As Possible If You Have Decided On “The One”
Heartland Boy has long decided on asking Heartland Girl to be his wife early on in his relationship in 2013. Out of practical reasons, Heartland Boy felt that the wedding proposal and marriage can “wait” first as HDB BTOs would require a timeline of approximately 4 years. Therefore, like every Singaporean guy out there, he asked Heartland Girl if she would like to buy a HDB flat with him before proposing to her. But he never expected this backlash.
He was put to the guillotine and almost never lived to see another day because in that moment, he just obliterated the perfect white knight in shining armour wedding proposal imagery that she had imagined since she was a kid. To her, this was akin to putting the cart before the horse. It was like taking her for granted.
So instead of time spent participating in HDB BTO sales launches, he spent months appeasing the damsel. Meanwhile, HDB BTO launches for Toa Payoh, Kallang and Telok Blangah all flew by. These were all places that were considered as ideal locations. It was all too heart wrenching for Heartland Boy to watch and he finally nipped the problem in the bud by proposing to Heartland Girl in July 2014. Thankfully, the stars remained aligned as shortly after, there was a HDB BTO launch in September 2014 that featured Boon Keng!
Of course, another more practical reason for proposing early is to take advantage of financial schemes from HDB when your earning capabilities are still muted. You are likely to be eligible for more grants. This is a massive topic on its own that ought to be discussed in a separate post.
Separate Needs From Wants
Besides Tip No.1, which may not be applicable to all out there, the other equally important tip is to separate needs from wants. If you ask Heartland Girl on what her dream house looks like, it will be something along this line:
“I want a house that is centrally located, has a walk-in closet, big enough for my Barbie doll collection, near to MRT stop, near to amenities, has a big balcony, big enough to accommodate a kennel for a Golden Retriever etc..”
Honestly, the list would have gone on had Heartland Boy not stopped Heartland Girl in her thoughts. That was a good wish list to have for the future, but definitely not for now. It is thus important that the couple sit down together to have a proper, mature adult conversation and sieve out the needs from the wants. In the end, the Heartland Couple settled on the following needs:
- Minimally, the HDB BTO has to be within the city fringe.
- It has to be truly accessible- MRT, buses, expressways.
- It has to be near a hawker center and wet market (You can never take the Heartlander out of both of us)
- It has to be sufficiently big for a family.
Heartland Couple settled on this set of needs so that the exit options for them are the most varied when the Minimum Occupation Period is up.
Prioritise Your Needs
After you have separated your needs from wants, it is important to rank them in order of importance. Some of the most common needs are:
- I want a big house (5 room flat)
- I want to stay near my parents
- I want to be in a mature estate as the amenities are better
- I want to be within walking distance to MRT
- I want a central location
- I want an affordable HDB BTO flat
For Heartland Boy, the need to stay in a central location far outweighs any of the other needs. The commute to the Central Business District is drastically reduced when staying in a city fringe location compared to a suburban location. For Heartland Boy, he values time as much as money. For Heartland Girl, being within walking distance to an MRT is the most important. Therefore, when the Boon Keng HDB BTO was launched, it was a dream location for the Heartland Couple. It was exactly what they had needed.
Picture 1: Location of St George’s Towers HDB BTO Project
To some couples, the need to stay near their parents could be the most important. The convenience of having trusted adults to babysit their child in the day may be something that cannot be bought with money. The point Heartland Boy is trying to emphasise is that it is OK to have different needs. At the end of the day, it is most important to fully rationalize, and understand as a couple, why both of you had bought a specific HDB BTO in that particular location.
Another piece of advice, this set of needs should be unique to the couple, not to the couple’s parents.
HDB BTO Is A Demand-Supply Game
Allocation of the HDB BTO flat is ultimately a mathematical exercise based on demand and supply, and not a roulette game at RWS based on luck. It is important to understand how the demand and supply factors affecting your choice of HDB BTO.
Some demand factors to consider:
- The HDB BTO is in a mature estate
- The project is located near to MRT
- The salary ceiling revision by the government
Some supply factors to consider:
- What is the size of the current launch and the preceding launches
- Whether a Sale of Balance Exercise is concurrently launched at the same time?
- When was the last time there was a new launch conducted in that location?
- Within the project, were both 5 room and 4 room flats being offered?
Picture 2: St George’s Towers Artist’s Impression
HDB BTO application rates for 4-room flats shot through the roof on the first day of the sales launch. The Heartland Couple eventually decided to bid for a 3-room HDB BTO flat at Boon Keng instead of a 4-room flat. This was to give them a 10 X better chance of landing a HDB BTO flat at that location.
Here’s a strategy to mitigate the possibility of paying ABSD if one of the applicants is an essential occupier.
Thankfully, their understanding of demand-supply analysis paid off and they were allocated a selection number when the HDB BTO results were out. Accordingly, this also meant giving up on the need of the flat having to be “sufficiently big for the family”. This was a painful decision and not a decision popular with their family or friends. But remember Tip No. 3, only the couple truly knows their own set of needs.
Allocation of a HDB BTO is also not based on a first come first serve basis, so it would be wise to monitor the demand first during the exercise period. This allows you to test your hypothesis before making the final decision.
So here you go, roll the dice and say a word of prayer for good luck. Oops, forgot that it is not supposed to be a game of luck.
After you have purchased and renovated your flat, get a Home Contents insurance plan to complement your compulsory fire insurance plan. This ensures that you have complete coverage (structure, renovation, personal belongings) for your cherished home. Compare and purchase on Insurance Market.sg* to get the most comprehensive home insurance policy at the most competitive rate.
*Insurance Market.sg is an affiliate partner of Heartland Boy and he earns a small fee for every successful referral.