Shopping for resale flats is like shopping for a Mac. Listen as salesmen explain, according to extraterrestrial logic, how it’s “actually not that expensive”. Since our ears are filled with enough bull dung, I’m going come right out and say this: We know when our purchase is over-priced. Okay? There’s no need to spin. We’re not buying because we’re gullible morons, we have our reasons. And in this article, I’ll explore the ones behind buying resale:
In Singapore, everyone has a choice. You want expensive, more expensive, or too expensive?
1. Mature Estates Have More Amenities
The biggest attraction of resale flats? They’re in mature estates. These are places like Bedok, where building more flats is about as viable as starting a rice farm in your bathroom.
And mature estates are desirable. By virtue of being older, they have more supermarkets, provision stores, coffee shops, etc. This is different from places like Woodlands, which is a prime location for the next Survivor series.
Aging Singaporeans, especially, seek the amenities of mature estates. Susan Pereira, who recently moved into a resale flat in Bedok, tells me that:
“I am too old to go gallivanting and I don’t cook. And I don’t want to burden my grand-daughter with driving here and there. That’s why we chose this place; everything is a few minutes away.”
Susan and her grand-daughter paid $45,000 COV for their flat.
S'pore housing is about choice. You want coffee shop near but too crowded to sit, or spacious but too far to walk?
2. Government Grant
Assuming you meet the requirements, there’s a $30,000 grant for resale flats. If you stay within 2 km of your parents, you get $40,000.
There are some drawbacks though:
- You’re living within 2km of your parents. Sadly, some people consider this a disadvantage.
- You can’t sell the resale flat for 5 years.
- You can’t purchase another HDB flat or Executive Condominium
If you’re a home buyer, none of those should be a problem. If you can afford to upgrade before five years, the only grant you should get is a grant of five seconds head-start. Before I chase you with a stick for taking grants from the needy.
There's also a new government grant for motorists.
3. More Living Space, Less Parking Space
Most older (i.e. resale) flats are bigger than their new counterparts. Some even have an additional storeroom or balcony. Remember, these were built when Singapore wasn’t more crowded than a Viet Cong tunnel in an air raid.
Then there’s the lack of multi-storey car parks in old estates. This works both ways: On the one hand, the flats are bigger because there’s more land space. On the other, parking is so limited you better hope visitors are law-abiding. Josephus Yap, who recently bought a resale flat, tells me:
“Always have non-residents come and park illegally, because of the coffee shop. Police fine, wheel clamp, also no use. There’s still the immediate problem right? Where to put my car? I have to sit and wait like a clown until someone drives out.“
"As part of our new scheme, flats will now cost $1000. However, parking spaces will cost $400,000.
4. Negotiable Prices
New HDB flats have fixed price tags. With resale flats, you can haggle with the former owner. Which uh…isn’t as big an advantage as most people think. According to property investor Charlie Sng:
“It still costs more because of the COV right? You bargain $10,000 or $5000 cheaper, it’s still priced above the valuation. Unless you can really bargain so well, or the seller is desperate.“
Mr. Sng says these situations are rare; he’s only seen it once, when a couple made a snap decision to migrate:
“They stayed in the flat for less than a year. Newly renovated some more. In exchange for a fast sale, I’m told they actually sold at a loss.“
Oh, that’s nice to hear. People want to leave our country that fast. Anyway, there’s a chance you’ll get a better deal if you bargain. And that’s an opportunity new flats won’t give you.
I did NOT bet our house on a Poker game. It was Blackjack.
5. You Can Move In Right Away
Sometimes, you need to find your own place fast. Maybe your parent’s house is too cramped. Maybe your children have school in the area. Or maybe the neighbours are unreasonable, and won’t let you dance to “Born This Way” in your underwear with the front door open.
Anyway, you want a resale flat for such cases. It’s ready to move into, unlike a BTO. There’s no long line of applicants, and you don’t have to wait for construction to end. In some cases, buyers have even asked for furnishings to be included. Josephus says:
“When we moved I just took some of the furniture that’s already there. I didn’t bring over our big dining table, our big white sofa, and that antique table your broke. It saved a lot of work.”
If it lasted 120 years it should have survived my weight, dammit.
Moving into BTO flats.
6. Walking to the Rubbish Dump
The newer flats have centralized dumping areas. Everyone has to drag their trash there, so if you lived with me you’d hate it (I’m heavy). The older properties have chutes that go straight from your flat to the dump.
If you’re a young couple, taking the trash out is trivial. But if you’re elderly or handicapped, it’s a serious annoyance. While I doubt anyone buys a resale flat just because of rubbish chutes, it’s sometimes the tipping point in the decision making process.
An E-mail from an anonymous friend:
“I guess I am a bit lazy, but I have my son, my cousin, my uncle, and my parents living under the same roof. All of them are too lazy to throw the rubbish. At the end of the day there’s a mountain of rubbish.
I hurt my back working three years ago, I cannot carry the big rubbish bag all the time. That’s why I wanted a place with the chute.”
Calm down everybody. We found a common solution to the garbage problem.
Do you prefer a resale flat? Comment and let us know!
Get more Personal Finance tips and tricks on www.MoneySmart.sg
More From MoneySmart