(Image courtesy of Singapore Tourism Board)

Most young families in Singapore buy an HDB flat as their first property as it is more affordable versus private housing, and government subsidies are available for their purchase and financing. More than 80% of Singaporeans live in HDB flats, and more than 90% of them own the home they live in.

To buy an HDB flat, you need to meet a number of eligibility requirements, including the possession of a Singapore citizenship or Permanent Residence. Also note that you will be restricted by certain conditions after you purchase them, including a Minimum Occupation Period of 5 years before you can sell it, buy private property, or rent the entire apartment out (please visit www.hdb.gov.sg for more information).

Once you have checked that you are eligible and decided that buying an HDB flat is your best option, the right HDB flat for you will depend on your: 1) budget 2) desired location 3) gross monthly household income 4) timing need and 5) the size/number of bedrooms you require.

In general resale flats are more expensive than new flats in the same location, plus you have to top up the Cash Over Valuation (the median COV was $30,000 in the second quarter of 2010). But if your gross monthly household income is greater than $10,000, then you have to buy a resale flat. Also if you need a place to live in urgently and are not able to wait the 3 to 4 years a new flat typically takes to get constructed under the Build To Order (BTO) scheme, you will have to buy a resale flat. Otherwise, you can look at buying a new flat.

Income eligibility to buy new HDB flats

If you decide to buy a new flat, the type of flat you can buy is also affected by your gross monthly household income (the sum of the income your family makes).

If your gross monthly household income does not exceed $2,000, you are eligible to buy a new 2-room flat. 2-room flats are usually under 500 square feet and contain a master bedroom, kitchen, living area and storeroom. They are meant for lower income households. They are the private housing equivalent of a one bedroom apartment.

If your gross household income does not exceed $3,000, you are eligible to buy a new 3-room flat in a non-mature estate. The floor area of new 3-room flats range from 646 to 700 square feet and they come with one master bedroom, one common bedroom, a kitchen, living area, common bathroom and storeroom. They are the private housing equivalent of a two bedroom apartment.

If your gross household income is between $3,000-$8,000 you can look at 4-room, 5-room and executive flats.

4-room flats are typically under 1000 square feet in size, and have a master bedroom, two common bedrooms, a kitchen, living area and storeroom. They are the private housing equivalent of a three bedroom apartment.

5-room flats are around 1200 square feet and have a master bedroom, two common bedrooms, kitchen, a separate living and dining area, and storeroom. They are meant to provide a larger living space for extended families of 4-5 members. They are the private housing equivalent of a larger three bedroom apartment.

Executive flats are typically around 1400 square feet in size, and have a master bedroom, two common bedrooms, a kitchen, separate living and dining area, storeroom, and space for a study room. Some executive flats come with a balcony as well. They are the private housing equivalent of a 3+1 or 4 bedroom apartment.

If your gross household exceeds $8,000 but is less than $10,000, you can look at Design, Build and Sell Scheme (DBSS) flats and Executive Condominiums.

Design, Build and Sell Scheme (DBSS) flats are built by private developers who have to bid for the land, design and construct the flats. They usually come with minimal finishings and the exteriors look more like private housing but without the facilities. The HDB provides housing loan and conveyancing services to eligible buyers.

Executive Condominiums are a hybrid between public and private housing. They were introduced by the HDB to cater to young graduate and professional Singaporeans who wanted higher quality housing but could not afford private property. They are built by private developers and have condominium facilities. But they also have restrictions such as the Mininum Occupation Period of 5 years before they can be sold, and from Year 6 to 10 can only be sold to buyers who meet HDB’s eligibility requirements. From the 11th year all restrictions are lifted and they can be bought and sold freely, even by foreigners.

There are a lot of options, eligibility criteria and restrictions, so I hope this article has made the choices available to you clearer!