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BUSTED: Myths on Million-Dollar Homes, Financing an HDB Flat and More

What’s real and what’s not, uncovered.

It’s no secret that an increasing number of resale HDB flats are being sold at over a million dollars, or that the COVID-19 pandemic led to delays in BTO projects. But before you break out in cold sweat thinking that you won’t be able to afford a home or that you’ll only be able to do so when you’re getting on in your years, hear us out.

Bidadari Park Drive by The Local INN.terior 新家室
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Here are 5 commonly held sentiments (read: misconceptions) about owning an HDB/BTO flat in Singapore and, more importantly, the facts surrounding them:

1. “I’ll need to wipe out my savings just to get an HDB flat.”

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Let’s set the record straight: this couldn’t be further from the truth.

In fact, most first-time buyers (of BTO and resale flats alike) use less than a quarter of their monthly income to service their housing loans. Among those who opt for an HDB loan, close to 90% can cover the monthly interest payments with proceeds from their CPF Ordinary Account (OA) alone, requiring little to no cash payments.

In other words, you most certainly won’t have to wipe out your savings just to get an HDB flat! Note, however, that applicants with higher income may receive less grants, and will in turn be required to fork out some cash up front.

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Example: financing a 3-room BTO at Keat Hong Grange without cash payments. Source: HDB's Facebook page.

Pro-tip: Because funding your HDB loan with your CPF OA means that you’ll be missing out on an attractive CPF interest rate, the CPF Board actually recommends financing your housing loan with a mix of OA and cash where possible.

If that’s not possible for you at this point (say, because you’ve only recently entered the workforce), fret not. You can always put money back into your CPF OA when your income/savings increase, as is an increasing trend among HDB flat owners over the years.

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Need more tailored help in financial planning for your home? [HDB has several tools/calculators]( "") you can use to work out an appropriate budget based on factors like your CPF savings, grant eligibility and more!

2. “I won’t be able to wait for a BTO if I have/plan to have kids.”

Planning to start a family? We definitely see where you’re coming from if you’re concerned about balloting and the waiting time for a BTO flat.

If so, the following might assuage whatever worries you have:

  • Priority for first-timer families: at least 85% of 3-room BTO flats and 95% of 4-room and larger BTO flats in non-mature estates will be set aside; 95% of BTO flat supply in mature estates will continue to be set aside for first-timer families (more on mature vs. non-mature estates later)
  • Recovery effects vis-à-vis COVID-19-related delays: median waiting time for new BTO projects has been reduced to 4-4.5 years
  • Parenthood Provisional Housing Scheme: increase in availability of interim rental housing for families awaiting BTO completion
Boon Keng Road by Swiss Interior Design
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Should you have specific requirements for location and/or are unable to wait for a BTO flat, the good news is that there are also grants available for resale HDB flats – which brings us to our next myth.

3. “Resale HDB flats cost over a million dollars.”

Needless to say, sensationalised news headlines should never be taken at face value.

While there have indeed been a record number of resale HDB flats transacted at over a million dollars this year, it’s important to note that these are still a rarity in the grand scheme of things, forming only about 1% of the total resale flat transactions. Plus, over 80% of these million-dollar transactions were of units that were 5-room or larger (jumbo flats, executive apartments, maisonettes etc.), and often in prime locations.

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To prevent the resale flat market ‘spiraling out of control’, the government has also introduced new cooling measures to keep public housing affordable.

So, there’s no need to panic – not every resale flat is going to cost more than a million dollars!

4. “There just aren’t enough HDB flats to go round.”

To be honest, we’re not sure how this misconception even came about; but there’s no better way to address it than with hard facts/statistics.

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If you’ve heard of friends who did not secure a BTO queue number after more than 5 tries, chances are, it’s because they went for ‘hot’ mature estates or Sale of Balance Flats with few units available.

One way to increase your chances of securing a BTO flat is to apply for non-mature estates. And there’s a track record to prove it: 9 in 10 first-timer families applying for BTO flats in non-mature estates have been successful within their first three tries.

At the same time, the HDB has been actively ramping up the supply of flats. For example, it was recently announced that up to 23,000 new flats would be launched in 2022 and 2023 respectively, a 35% increase from 17,000 in 2021.

Tampines Street 61 by SHE Interior
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At this juncture, it is also important to recognise that not all of these new/upcoming launches will have units exactly the way you want them in terms of property size, proximity to the city and more (all of which, by the way, come at a premium).

Further, the ‘hottest’ estates aren’t necessarily the only ones worth trying for – more on that next.

5. “Compared to mature estates, non-mature estates are way more inaccessible and lack amenities.”

Mature estates have, by definition, been around for longer and therefore have more amenities and greater connectivity where public transportation is concerned. In this vein, it only makes sense that the same level of infrastructure will take time to come together in newer, up-and-coming estates.

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Artist’s impression of Jurong as a mixed-used business district. Source: URA.

Jurong, for example, may be a non-mature estate; but the URA has plans for it to become the largest mixed-use business district outside the city, with 4 MRT lines serving the district by 2035. For more information on the long-term master plans for each region, check out URA’s website here.

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Affordable and accessible: financing a 4-room BTO flat at Woodlands South Plains (another non-mature estate), conveniently located next to a Thomson-East Coast Line MRT station, with zero monthly cash outlays. Source: HDB’s Facebook page.

So, if you find that flats (BTO and resale alike) in mature estates are currently out of your budget, you might wish to consider balloting for a BTO unit at a non-mature estate (which are usually priced lower) instead, as it may in fact end up being more advantageous in the long run.

A home for everyone

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So yes, there are HDB flats that can cost a million dollars; but it’s important to remember that these form but a small minority. And if there’s one thing you should take away from this article, it’s that every Singaporean household who needs it will have access to public housing that meets their budget.

For regular updates and bite-sized tips on financing your HDB flat purchase, follow MND on Facebook, Instagram, Telegram and YouTube today!

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