The Difference Between Buying a HDB BTO and New EC
You may have heard of the Difference Between Buying a HDB Bto or a New EC but don’t know the difference. This article will give you the scoop on both types of condos. In addition, you’ll also learn the benefits of buying a resale HDB flat. This way, you can save up your money for a private home upgrade or use the funds for investment. If you’ve been unsuccessful in obtaining a BTO or EC, resale may be the way to go.
What is the difference between a HDB BTO and an EC? As both are privately-owned, the EC is often cheaper than a full-fledged condo. An EC starts out as a HDB property, but will become private within 10 years. Both types of flats offer similar amenities, but they differ in value. A BTO flat is typically closer to public amenities, work, and social activities.
As an investor, you may be thinking that the price of a 2-room EC is cheaper than a new HDB BTO, but you should be careful – the new ECs are priced significantly higher than their BTO counterparts. A new EC is much more expensive, but you can make a healthy profit once you MOP. And remember, there’s always the potential to earn money from rent!
When it comes to down payment, a new EC is usually uncompleted and unfinished. This property type is called “Buildings Under Construction” (BUC). Since there is a lack of land, buyers are required to pay 25% down payment at the time of booking. But the money that you put down upfront can be a significant amount of CPF savings. Buying a new EC is a good investment for the future.
Before you buy an EC, you need to have $221,250 in cash. That amount includes the buyer’s stamp duty, which is $21,150. The HDB will not grant you a loan if you can’t afford the downpayment. You will have to seek a bank loan, but you’ll need to meet certain requirements in order to qualify. You’ll also need to meet the mortgage servicing ratio (MSR) and Total Debt Servicing Ratio (TDSR).
In addition to the price difference, the EC also has a minimum occupancy period. When purchasing an EC, you must occupy your unit for at least five years. After that, you can rent the unit or sell it in the open market. And because there is a MOP, you won’t be able to sub-sell the entire apartment during the first five years. This makes it a more affordable option for many.
ECs are typically cheaper than BTOs. While they don’t offer all the amenities of a private condo, they do have the benefits of amenities that are available in private units. For instance, ECs typically include security measures, landscaping, and swimming pools. Additionally, they are often located in less densely-populated areas. Because of their lower density, ECs are less expensive than BTOs.
Buying an EC is cheaper, but it’s important to consider whether you’ll need it for your career. ECs are often cheaper than private condos, but they are bounded by HDB rules. The EC will still be considered a HDB property for the first ten years. The government has set a five-year minimum occupancy period, but it doesn’t have a family nucleus. If you are interested in reselling, make sure to purchase a HDB or EC/DBSS flat from a developer.
For those who are looking for a home with a good resale value after 10 years, ECs will offer better value. A BTO is more suitable for families and does not qualify as an investment property. It also doesn’t have much resale value, meaning it’s not a good choice for investors. Furthermore, if you plan on selling your BTO, you can expect to earn very little profit, and the home will not be worth much.
Purchasing a HDB BTO is an excellent option if your budget is limited. Both BTOs and new ECs are available at lower prices. In the first place, HDB flats are the most affordable housing options in Singapore. However, if you can afford a new HDB flat, then it’s worth it. But there are some key differences between the two types of HDB flats.
When buying an EC, be sure to be aware of the restrictions. The first is the restriction that applies to foreigners. You can’t rent out an entire flat, but you can rent it out to others who might want to live in it. Another important difference is that ECs are built by private developers and sold by HDB. This makes them a public-private hybrid. You must wait two to three years before you can move in.
EC vs resale
Although the EC vs resales in HDB BTO debate is a hot topic among Singaporeans, the two properties are not the same. Although both offer a higher appreciation rate, resale flats have not appreciated nearly as much as the executive condos in the last decade. In addition to this, resale flats tend to be more expensive than ECs, which makes it more difficult for a Singaporean to afford the higher resale prices.
While HDB flats are affordable, resale ones are not, and are not as accessible to foreigners. The difference in affordability between the two types of HDB flats can make a huge difference in the long run. HDBs with resale units have lower remaining leases than ECs. As such, it is important to consider the benefits and disadvantages of each option before making your decision.
While resale HDB flats offer lower capital appreciation, EC homes are more expensive. First-time buyers with limited capital will most likely opt for EC instead. An average 4-room BTO costs $250,000 to $380,000, while a mature estate can cost up to $620,000. The difference in conservancy fees is largely subjective. In addition, property taxes are based on the Annual Value (AV) of the home, which is a figure estimated by IRAS based on rental income.
While ECs are often more expensive than resale HDB flats, they offer the same amenities as private condos. However, unlike HDB BTO flats, ECs are private property after ten years, which can make them a better investment than HDB flats. So, you can use the resale property as a rental property or as a passive income stream.
Investing in resale HDB flats may be a better option for new ECs, where the eligibility requirements are more relaxed. On the other hand, resale HDB flats are preferred by families looking to upgrade to a more luxurious home. In addition to that, the EC vs resale HDB BTO comparison will also help you take advantage of CPF housing grants.
Purchasing a new EC will entail a waiting period of two to three years before it reaches TOP. However, resale HDB flats are ready to move in, and you will have the added benefit of being able to inspect the neighbourhood right away. And while new ECs may have a slightly higher monthly payment, resale ECs will be less expensive.
In addition to the price differences, the resale HDB flat is likely to be more affordable than a private condominium, so it makes sense to consider the location when deciding between resale and new EC HDB flats. In addition, resale HDBs tend to be older than ECs, making them an ideal choice for those looking for an asset-progression investment.
Purchasing an EC requires a larger down payment than buying an HDB BTO. An EC buyer must put down a minimum of 25 per cent of the property value in cash. The first five per cent of the down payment can be made with cash or with a CPF account, while the remaining 15 per cent of the property value must be paid within nine weeks after option.
As for the difference in cash outlay, an EC buyer is likely to receive higher profits than an HDB BTO buyer. While the EC grant is lower than an HDB flat, the deferred payment scheme is preferred by investors looking to earn maximum profits. However, it is not always worth the extra time and effort needed to obtain a new EC. It is still an excellent option for those who want to buy a new HDB flat but are not ready to pay for it in full.
Purchasing an EC is a smart investment for a Singaporean with a higher income. However, it is important to note that while the EC is fully privatised, it is only available to Singapore citizens or permanent residents. In contrast, HDB resale flats can only be sold to Singapore residents and permanent residents. However, buying an EC will allow you to get a better price and have a lower monthly payment.