As a millennial, how much do you know about buying your first home?

As more and more of my peers prepare to settle down, applying for a Build-To-Order (BTO) flat is almost a prerequisite rite of passage in Singapore.

But what I've come to realise is that many of them have not really planned for the process. Granted, I'm 27 and did not know much about it myself before I went through with the application last year.

WHY BTO?

Despite the availability of resale flats, many young couples choose a BTO as the price is usually significantly lower than that of a resale flat in the same area.

Government grants for BTOs also help shave a significant amount off the cost. In this sense, it's a more 'economical' option, if that can be said, for many eligible buyers who want to utilise the 'discount' given by HDB.

I GREW UP IN HOUGANG, CAN I BTO IN HOUGANG?

Before I first applied for my BTO, I'd always thought of living close to where I grew up, Hougang.

However, unless you have a lot of time to wait for a really ideal location, chances are you'll probably only have a few choices.

For example, in the May 2019 BTO launch, it was either Tengah, Woodlands or Kallang/Whampoa. If that's not what you're looking for, well, you've got to wait till the next quarter when HDB releases a new batch of flats for balloting.

There are also two kinds of BTO areas: mature estates and non-mature estates. Flats in mature estates such as Tampines and Toa Payoh, for example, tend to cost more as infrastructure and amenities have already been built.

These include a variety of public transport options, hawker centres, shopping malls, and schools.

Non-mature estates (such as Sengkang, Punggol, and Sembawang) offer slightly cheaper housing options, but as the name suggests, they are usually lacking what is already readily available in mature estates.

For example, in the February 2019 sales launch, a 4-room BTO flat in Sengkang started from $283,000 while a 4-room BTO flat in the Kallang/Whampoa area started from $523,000.

3-ROOM OR 4-ROOM? WHAT SIZED BTO SHOULD I GET?

Size matters... when it comes to your HDB unit. People usually talk about the cost when they discuss whether to get a 3- or 4-room BTO, but there's a lot more to it than just the price of the flat.

Different-sized flats are available at different locations and orientations within the estate.

If you prefer certain layouts within the compound or windows that face a certain direction, you might have to adjust your expectations accordingly.

Before you think about applying, it's important to consider the size (and budget) of the flat you are trying to buy.

Some families think of their BTO as a 'placeholder' home while they build their career to where they can afford something larger or in a more convenient location. While others may think of the BTO they're buying as a place they'll likely retire in.

Flat availability is also something to take into consideration. In general, 4- and 5-room flats are more in demand than a 3-room flat. Because of this, larger flats tend to have a higher oversubscription rate.

If having a new roof over your head in three years' time is more important to you than the size of the flat, you might want to reconsider your options.

For myself, my girlfriend and I opted for a 3-room flat as we knew children were not our immediate priority. A cosier (and cheaper) home would be just the right fit.

And with a queue number of 129 out of 200, we were lucky enough to snag the last unit on the top floor.

SURRENDER TO FATE 

Which brings us to the point - all the talk above is based on the assumption that you are lucky enough to even get a queue number to select a flat.

After all the planning and discussion, sometimes there's no choice but to just leave it up to the powers-that-be.

If a project has X number of the flats available, it is still possible to get a queue number above X. For example, there may be 300 4-room flats in the project, but your queue number is 350.

But if the project is highly oversubscribed, you may not even get a flat selection queue number.

The selection process will usually kick in at least three weeks after the initial balloting process (in which you'd also have to pay a $10 non-refundable application fee.)

If you have a higher number but still manage to get called in for the flat selection, good luck looking for a prime unit or a high floor, as most of these options will already have been picked by luckier queuers before you.

On the bright side, flats on lower floors are usually on the cheaper end of the spectrum.

Which is why it is also very important to research the units beforehand and have a few choices in mind, before going for your appointment. 

You'd also be expected to make a decision on whether to select the 'default' sanitary fittings, internal doors and flooring that come under the Optional Components Scheme.

So either arrive at your HDB hub appointment armed with that information, or go earlier to take a look at the finishings for your project in order to make an informed choice. 

Other things to take into consideration when it comes to flat selection include whether you'd like a unit by the road which is more accessible, or a unit facing the inside of the compound which may be less noisy.

The direction of the unit is also a factor, be it for fengshui purposes, or to avoid the morning or evening sun (most would have heard that north-south facing units are generally preferred).

HOW TO GET THE MOST OUT OF HDB GRANTS

When I was applying for my flat, it was for the need want to move into my own place, instead of picking the best circumstance to apply for grants.

But due to the way the grants are calculated, it's easy to see how with some proper planning, one would be able to get a larger amount.

If applicable, the best time to apply for a BTO (for grant amounts) would be when the total income for both applicants is at its lowest.

For example, if one applicant has been working while the other applicant is in university, the grant given would likely be higher (which can go up to $80,000 for first-time applicants) than if both applicants are already in the workforce.

HDB will need your income documents dating back 12 months from the date of your application to assess the grant amount available to your family unit. Be warned however, in the event that a flat has to be cancelled and returned to HDB, the costs and inconveniences could far outweigh applying for a flat and grants prematurely.

Additionally, the income assessment will not take the following into account:

• Bonuses
• Overtime pay
• Allowances
• Stipends
• National Service allowance

The above information is non-exhaustive, but hopefully helpful to those who are thinking of balloting for their first BTO. Know other tips when applying for a BTO flat? Let us know!

jayjaylin@asiaone.com

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