Is HDB BTO flat just a roof over your head for your family?

aerial view of hdb bto flats in singapore

Is HDB BTO flat just a roof over your head or an opportunity to reinvent your family’s future?

According to the latest 2019 statistics, 78.6% of Singapore’s populations live in HDB flats and the other 21.4% stay in private properties. 

Compared to just ten years ago in 2009 whereby 83.6% of Singapore’s populations were living in HDB flats and only 16.4% of the population was staying in private properties. 

That is a considerable increase of 5% in just ten years.

Why are more Singaporeans upgrading to private properties and how are they able to do it?

Read on to find out more!

an infographic showing the difference of residential households dwelling in singapore between 2009 and 2019


What is an HDB BTO flat?

A BTO (Build To Order) flat is an HDB (Housing and Development Board) public housing allocation system that offers flexibility in timing and location for Singaporeans buying new HDB flats in Singapore. 

One of the advantages of the BTO system is that HDB can build according to real demand.

This system allows HDB to increase or reduce its supply of flats according to demand.


How are some Singaporeans able to upgrade from HDB to Condo upon the sale of their HDB flats?

HDB flats are subsidized and eligible first-timer applicants can receive housing subsidy from HDB. 

Therefore, most homeowners can see a profit upon the sale of their flat especially upon reaching MOP (Minimum Occupation Period).

They can pay for the 5% (Cash Only) downpayment for private Condo from the cash proceed.

A working couple will also have more CPF inside their Ordinary Account after 5 years or more. 

Combined with their returned CPF (Principal Amount Withdrawn + Accrued Interest) from the sales proceed, they are then able to pay for the remaining 20% using their CPF.

However, not everyone can upgrade to private Condo as it is also dependant on both of the husband’s and wife’s combined income.

At PrivateHome, we strongly do not advise anyone to overstretch their financials. It is important to buy a home within your budget, needs, and requirements.

If you are considering to upgrade but is unsure if your finance ability would allow you to do so, you can contact me @ 9762 1726 or email to


Is your HDB flat an appreciating or depreciating asset?

Let’s look at how HDB flats prices have moved from 2013 to 2019. 

On average, HDB flats prices in the whole of Singapore dropped by 11.32% from $469 psf in 2013 to $416 psf in 2019.

a graph showing the drop in average psf of hdb flat prices from 2013 to 2019

At the same period of time, condo prices have increased by 16.69% from an average of S$1,378 psf in 2013 to $1,608 psf in 2019.

a graph showing the increase in average psf of condo prices from 2013 to 2019

A comparison between the average psf of HDB flats and Condo from 2013 to 2019 side by side:

a graph showing the comparison of average psf in hdb flat and condo from 2013 to 2019

For about seven years now since the
peak of HDB Resale Price Index in Q2, 2013, HDB flats prices have been struggling. 

The average price of a resale flat island-wide was about S$475,709 in 2013 during the peak. But in 2019, it dropped to about S$431,453.

a graph showing the average price of hdb flat in 2013

a graph showing the average price of hdb flats in 2019


This trend is expected to continue given that a record-breaking number of about 50,000 flats will be reaching their MOP in 2020 and 2021, which is in stark contrast to the estimated 9,000 flats that reached MOP in 2013-14.

As we know that prices increase or decrease based on supply and demand.

Having that many flats reaching MOP all around the same time could drastically increase the supply of resale flats in the open market causing downward pressure on the prices.

a graph showing the number of hdb units reaching minimum occupation period


Why doesn’t HDB flats appreciate as much as private properties?

HDB flats are public housing and the Government will have to ensure that it remains affordable for the majority of Singaporeans and the younger generations. 

Ensuring that HDB flats remain affordable has always been a key pillar of the Government’s policy. 

Some of the ways that the Government regulates HDB prices to ensure that it remains affordable are through:

1) HDB Valuation

When a buyer has been granted an OTP (Option to Purchase) by the seller of the flat, the next step is to submit a Request for Value. In granting the OTP, the seller agrees to the valuation of the flat, if required by HDB.

Both the HDB and bank loans amount are based on HDB valuation. If there is a difference between the agreed price and the HDB valuation, the buyer will have to pay COV (Cash Over Valuation).

The COV cannot be obtained from the loan amount and it has to be paid in cash only.

2) 30% MSR (Mortgage Servicing Ratio)

MSR is a ruling imposed by MAS for housing loan when you want to purchase an HDB flat or EC (Executive Condominium). 

MSR is capped at 30% which means that not more than 30% of your gross monthly income can be used to pay for your housing loan.

Whereas the TDSR (Total Debt Servicing Ratio) rule is used for the purchase of private property. The TDSR ratio is 60% of your gross monthly income instead of just 30% for MSR.

3) Supply-side and demand-side policies

In a free-market economy, price increases or decreases based on the law of supply and demand.

However, HDB prices are regulated by the Government to ensure that it remains affordable.

On the supply side, the Government provides subsidies via the concessionary pricing scheme for new BTO flats. The level of subsidies is pegged to the flat type and monthly income.

Since 2011, the Government moved another significant step to stabilize new BTO prices by delinking them from resale flat prices.

HDB then sets new flat prices based on a cost-plus basis.

This approach allows HDB to better protect BTO flat buyers against price spillovers from the resale markets and their volatilities.

By doing so, HDB can keep BTO flat prices affordable.

As a result, BTO prices will generally be a benchmark to the resale prices within the area.


What is the opportunity cost of not upgrading early when you can?

The property market is cyclical. The property prices follow a long cycle pattern of ups and downs.

If you look at this chart that shows the history of private residential property prices and cooling measures since Dec 1994, you will be able to notice a distinct pattern.

You can see that from Dec 1998 onwards, there are four times the cycle bottom out.

The next bottom out of the cycle is always higher than the previous one.

You can also see that since Dec 1998, there are three times the cycle reached a peak.

The next peak of the cycle is always higher than the previous one.

a graph showing the history of private residential prices and all of the property cooling measures in singapore

Now, what does this tells us?

It tells us that in the long run, the private residential property prices in Singapore is increasing steadily.

According to this article, our Minister of National Development Lawrence Wong said that private residential property prices would have increased by up to 15% in 2018 without the latest round of cooling measures.

In the article, Lawrence Wong also said that and I quote, “the Government’s aim is not to bring prices down, but to steady the cycle and to stabilise the market, so that prices can move broadly in line with income growth.”

In 2019, Singapore residents real income growth is 2.2 per cent

Based on what our Minister of National Development Lawrence Wong said and assuming that the real income growth stays at 2.2 per cent for the next 10 years, this would mean that private residential property prices will increase 22 per cent by 2030.

If you could upgrade now but you didn’t and the above becomes a reality, you would have lost the opportunity to upgrade at a lower quantum and lower capital outlay. 


When is the best time to sell your flat?

There is no best time but an ideal time will be upon reaching MOP for various reasons;

1) Supply & Demand: 

According to a BusinessTimes article, there will be more than 70,000 flats reaching their MOP period between 2019 and 2021. 

These flats will be eligible for resale on the open market. Potential buyers will have more choices when choosing a resale flat and potential sellers will have more competitions when trying to sell their BTO flats.

2) CPF Accrued Interest:

Most if not all Singaporeans are unable to purchase our first BTO flat without using our CPF. But not many are aware of how CPF accrued interest works and how it can affect your ability to upgrade in the future.

CPF accrued interest is the interest amount that you would have earned if your CPF savings had not been withdrawn for housing.

You will have to refund the principal CPF amount which you have withdrawn plus the accrued interest (2.5% per annum, compounded yearly). 

Many of you will be thinking that the return of CPF monies (Principal Amount Withdrawn + Accrued Interest) is not a bad thing after all as it is still your money, but it might be a point of no return to exit from the HDB mechanism. 

Selling your BTO flat upon reaching MOP means that you can free up cash that can be used as a leverage to upgrade from HDB to Condo

However, selling your BTO flat after a long period of time means that more of your CPF monies will have to be paid back into your CPF account, thus reducing the amount of cash you will get from the sales proceed of your BTO flat. 

*Did you know that If you have used $100,000 of your CPF to finance your HDB flat, and assuming you sell it 29 years later. By that time, you would have accumulated $104,640 in accrued interest!

3) New factor

It is human nature that we tend to prefer newer stuff. The same can be said for BTO flats that just reached MOP as it is the earliest time that anyone can buy a resale flat. 

Hence buyers will be more willing to pay a premium for an estate with a newer facade.

4) Decaying lease

BTO flats have a 99 years lease from HDB. The value of your flat will be affected as the lease start to decay. 

Buyers that are looking to purchase a resale flat will consider the remaining lease as they might be looking to sell in the future. 

Since 10 May 2019, the rules on CPF usage and HDB housing loans has been updated. The HDB flat remaining lease must cover the youngest buyer till the age of 95 for the buyers to be granted maximum HDB loan and CPF usage.


Is retirement planning through property possible?

Retirement planning is something that everyone should do but no one does. 

Especially when Singapore is ranked as the world’s most expensive city for the fifth year in a row, based on a report by The Economist Intelligence Unit.

The Government is also worried about the retirement of Singaporeans and that is why they came up with the CPF LIFE (Lifelong Income For The Elderly) Scheme.

However, not everyone will be able to meet the BRS* (Basic Retirement Sum) requirement. 

For those who do meet the BRS, the monthly payout may not be sufficient to sustain your desired retirement lifestyle.

*BRS is $90,500 if you are turning 55 in 2020 and it increases every year.

Now imagine that you are 35 years old, does it matter which choice you make?

an infographic showing different retirement plan between 2 couples



For most Singaporeans, the biggest asset we have is our home.

Knowing that a home might not just be a roof over your head but also an appreciating asset is something possible.

Should you decide to do something with your HDB flat, it is advisable to speak to a professional real estate agent to know what you can afford. 

It is essential to know what you can afford to avoid over-leverage by purchasing a property that’s way beyond your financial means.

Are you a first time home buyer? Then this comprehensive guide is for you!

Are you looking for a real estate agent? Contact me @ 9762 1726 or email to


Frequently Asked Questions (FAQ)

1. When can I sell my flat?

You can only sell your flat upon reaching the MOP. 

MOP (Minimum Occupation Period) refers to the 5 years period that you are not allowed to sell your HDB flat. 

MOP is calculated from the date that you collected your keys to your flat. 

You can check your HDB flat MOP date by logging into My HDBPage using your SingPass, followed by > My Flat > Purchased Flat > Flat Details.

Below is an example of how it looks like:

screenshot of purchased hdb flat details from hdb website


2. How do I calculate the sales proceeds of my HDB flat?

First, you need to find out what is the estimated selling price of your HDB flat. 

Secondly, you need to know what is your outstanding HDB/Bank loan. 

Thirdly, you need to check how much CPF principal you and your spouse have used for your flat plus accrued interest.

Next, you will need to include legal fee and any agent fee if you have engaged a real estate agent to assist in the sales of your house.

Take the estimated selling price and deduct the outstanding loan, CPF principal + accrued interest, legal fee and agent fee if there is any.

The remaining amount will be your cash proceed.

example of how to calculate the sales proceed of hdb flat


3. How do I know the price of my HDB flat?

  • You can scan this QR code to get estimated market value from SRX X-Value.

scan qr code to get srx x-value of your home price

  • You can visit the HDB website to check on the transacted prices for resale flats in your block or estate within the past 2 years.

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