Considerations before applying for a new HDB flat

It has become more challenging to get your ideal flat due to land constraints and high demand for new flats (not just from young couples!). The current rule at HDB is that everyone can only choose 1 type of flat (e.g. 4-room) at 1 location (e.g. Kallang) at a time, and go through a balloting process, where if successful, then proceed with flat purchase. There are penalties for rejecting an offer along the way - such as forfeit in option fee/ downpayment and being given a lower priority for the next application (read penalties here). So, it's very important that you make a careful consideration so you won't regret your decisions later on! 

Process for buying a new HDB flat

You may like to check out this link or more details on the costs involved at each stage of the application. 

What are some of the things to consider before applying for a flat?

1. Total cost of the flat (as well as your renovation and wedding expenses) 

This is, of course, the most important aspect to consider! The total cost of flat includes the listed price and other additional compulsory fees such as stamp duty fees, legal fees, home protection and fire insurance fees (read more here). You don't have to read so much on these since they are compulsory and it's a lot more work to find an external agency to provide the services. You can also check if you can apply for HDB's Special Housing Grants (SHG) and Additional Housing Grants (AHG) (match your household income group to the grant amount in the table here). 

You should also give some thought to other future expenses such as renovation, furniture purchase, wedding, car, children and day-to-day living (food, transport, utility bills). Try to project your income forward and decide how much expenses you're comfortable with. It's not advisable to spend outside your means to get your ideal house and wedding just because it's a once-in-a-lifetime thing, but to suffer for the next 20 years of your life working very hard everyday to repay the loans. Your available housing budget will include your cash savings, CPF ordinary account savings (you can use all of it to pay for your flat), and housing loan. 

2. Location

You can consider the proximity of flat to MRT, accessibility to town, as well as convenience to nearby amenities such as shopping centres, supermarkets, schools and recreational spaces (e.g. parks, community centres). 

3. Time required 

It takes about 4 years to get a BTO flat and 1 year to get a SBF flat. Have an idea when you plan to get married and start applying for a flat early - you don't want to waste money renting flats after you're married or be in the situation where you have to delay your wedding!

4. Chances of getting a flat

BTO flats are usually more popular than SBF flats because there are higher chances of selecting the floor/ unit of choice (since SBF flats have already gone through a round of balloting and flat selection and are essentially leftover BTO units). For both BTO and SBF flats, central locations in and close to town tend to be very popular too. 

5. Type of flat

4-room or 5-room HDB? If you're having this question, you may consider dropping by HDB showroom flats to see for yourself the current flat sizes at HDB Hub (5-minutes walk from Toa Payoh MRT). HDB 5-room flats these days can be comparable to HDB 4-room flats in the past. You can start thinking if you're going to have children and if you're comfortable with the space. You may also want to consider buying Executive Condominiums (ECs) as well. ECs are basically condominiums in HDB setting and are fully-equipped with security and amenities such as swimming pools and gyms. They are priced higher than HDB 5-room flats but more affordable than private condominiums. Household income ceiling for applying for EC is $14,000 and other flat types is $12,000 (read more for specific details). 

You may like to list these factors for consideration in terms of priority so you can better gauge which flat suits your needs better. 

Other tips! 

• For sale of balance flats, you can check availability of units in a particular location on HDB website or even go down to the site to recce. 
• Sign up for HDB's e-alert service - they will send you updates on BTO/ SBF launch and many useful information in bite sizes on how to go about the whole flat purchase process. 
• When choosing a particular unit, consider the direction it is facing and choose the one that is most suitable for both you and your spouse according to fengshui principles (ancient Chinese knowledge on optimal spatial orientation and arrangement for harmony and good fortune). 
• You may also like to consider the direction of your unit's windows, you should avoid choosing those facing west and east if you don't want direct (and scorching hot) sunlight in your house.

In my next post, I'll be sharing what you need to prepare and expect before going down to book a flat at HDB. Stay tuned! 😊