The ST Guide to... Buying your first HDB flat

Do your homework before you buy that first home

Being prepared will lessen anxiety and help you get the home of your dreams

For many house-hunters, location is key. This could mean proximity to their parents, or a shorter distance to the Central Business District, their workplace or the nearest MRT station.
For many house-hunters, location is key. This could mean proximity to their parents, or a shorter distance to the Central Business District, their workplace or the nearest MRT station. ST PHOTO: KUA CHEE SIONG

Buying your first flat can be an intimidating exercise but it is a road most Singaporeans take, whether they are going to be married or are singles looking for their own pad.

Here are some tips that may help reduce your stress on this journey.


Save yourself the heartache of falling in love with an expensive house you have to walk away from by first checking how much you can truly afford.

The Central Provident Fund (CPF) has a useful calculator on its website that both singles and couples can use. Yes, it is tedious to key in your salary details and financial commitments like education loans or credit card bills. But it is worth the time, depending on the details you have at hand.

The website churns out a useful table of the maximum property price you can afford, down payment needed, an estimated loan from both the Housing Board and banks, and your monthly instalments.

If you are buying an HDB flat, you may also be eligible for grants - up to $80,000 for new flats and $110,000 for resale ones. The HDB has more details on its website.

There are other costs that may affect your budget. One big-ticket item is renovation, which averages $30,000 for a new four-room flat. The bill could start from around $55,000 for a resale HDB flat, depending on its age and the types of changes you are making. Most condominiums come renovated.

Another is the stamp duty, where 1 per cent is levied on the first $180,000 of the purchase price or market value of the property - whichever is higher - then 2 per cent on the next $180,000 and 3 per cent on the remaining amount.

Other costs include legal fees, fire insurance, a valuation fee for resale flats and the commission for an agent if you have hired one.

All these costs have to be factored into your budget and cash flow from the start.


Now comes the fun part. List what you want in your future home, and try to divide it into what is critical and what is nice to have.

For many, location is key. This could mean proximity to their parents, or a shorter distance to the Central Business District, their workplace or the nearest MRT station.

Others may prioritise amenities like convenience stores and swimming pools or features like a spacious kitchen.

Don't forget that some things can be "solved" with renovation, if your budget allows. For example, a wall separating a kitchen from a living room can be hacked down to open up the space.

With this in mind, you can turn to property portal sites like PropertyGuru, SRX Property or to look at photos of your dream homes.

If this gets too overwhelming, consider hiring an agent, who will help you narrow down homes that match your budget, as well as arrange viewings.

Agent commission is usually 1 per cent of the property price for HDB flats. Buyers do not pay agent commission for private properties.


The next step is to get in-principle approval for your loan. Agents often advise you to get this ahead of time to signal to sellers that you are a serious buyer.

If you are getting an HDB flat, you have two choices: an HDB concessionary loan or a bank loan.

The interest rate for HDB loans is relatively stable at 2.6 per cent, compared with bank loans, which have interest rates that vary from 1 per cent to 1.68 per cent. This may change over the years too.

HDB is also generally more forgiving than banks: it charges interest at 7.5 per cent per annum for late payments, while banks charge 24 per cent per annum. It is also known to let people defer their payments, while banks often require payments on time.

For HDB loans, you can pay your down payment with CPF funds, but bank loans require at least 5 per cent cash upfront.

Bank loans also have a lock-in period of a few years.

The obvious upside to a bank loan is the currently lower interest rates, while HDB loans would be attractive to those who favour flexibility.

Check which you are eligible for - HDB loans are restricted to couples who are earning $12,000 and under - and speak to a mortgage adviser if you need help.


This can be a chore for some, but once you start on this step, you are closer to finding your dream home.

For resale HDB or private properties, arrange to view several flats in the vicinity on the same day to maximise your time.

Prepare a spreadsheet listing the flat's address, size, orientation, asking price and number of years it has left on its lease.

Leave room to take notes about renovation, the state of cleanliness in the block and other notes you think will be useful to you.

Take photographs. Lots of them. Things start to get blurry once you are on your tenth house.

Keep an eye out for spalling concrete, mould, cracks in the walls, leaky pipes and coats of fresh paint in the corridor, which some say could be a sign of covering up loan sharks' unfriendly warnings. Ask a trusted friend or relative along if you do not have an agent - he or she may spot things you cannot.

Like the flat? Make an offer and hope for the best.

For new HDB flats, the process is simpler. First, apply for a flat. Then wait a month to see if you have a queue number for a Build-To-Order flat, or about three months if you are gunning for a Sale of Balance Flats unit.

If you do, congratulations! Go to the HDB to take a look at the flat models, and also visit the site to familiarise yourself with the area.

Make a list of units you would be okay with. As your appointment date nears, check which units have been sold and cross them off.

If there are units left that you find acceptable when it is your turn to select one, congratulations as well. You are well on your way to becoming a home owner - once the flat has been built.

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A version of this article appeared in the print edition of The Straits Times on July 15, 2017, with the headline Do your homework before you buy that first home. Subscribe