Budget 2023: What does it mean for BTO, Resale, Private Property?

HDB Resale Prices, property investment, BTO wait times. How will Budget 2023 impact these topics and what do we think the future holds?

Impact on BTO buyers

DPM Lawrence Wong shared that housing grants for first-timer families buying resale flats will increase by up to $30,000 to a total grant of $80,000. 

Note that this is for first-timer families who have not utilized any housing subsidies before and not earning more than $14,000 a month. (Singles buying flats not earning more than $7,000 a month.)

This is in response to the 2 hot button topics that are preventing young couples from setting up families:

1. Long waiting time for BTO flats (4~6 years).
2. High resale flat prices.

Impact on the resale HDB housing market

The increase in housing grants for first-time families and singles in Singapore is expected to boost the demand for resale flats and alleviate the financial burden of purchasing a property, particularly for those who may not have the financial resources to purchase a new flat.

This increased demand may lead to a rise in resale flat prices, which have already been increasing due to the high demand for housing in Singapore. However, the government has implemented cooling measures to keep property prices stable, and HDB is ramping up the supply of BTO flats to meet the growing demand.

The impact of the housing grant increase on the housing market will depend on how the government manages the supply and demand of housing in the coming months and years.

Impact on private property buyers

One of the main implications for private property buyers from Budget 2023 is that there will be higher stamp duty rates for most private properties valued above $1.5 million. Specifically, the portion of the property value that is above $1.5 million and up to $3 million will be taxed at 5%, up from the current 4%.

This means that private property buyers who are looking to purchase properties in this price range will have to pay higher taxes. It's worth noting that smaller properties, such as shoebox units, tend to be priced below $1.5 million and may not be affected by the higher stamp duty rates.

Overall, the impact of the increased stamp duty rates is expected to be limited, as it is only a small increase and is unlikely to significantly affect demand for high-end private properties. However, it is something that buyers in this segment of the property market will need to factor into their calculations when making a purchase.

Should I continue with a BTO, Reaslae HDB, or look at private property?

The decision between buying a Build-To-Order (BTO) flat, a resale flat, or a private property ultimately depends on individual circumstances and preferences. Each option has its advantages and disadvantages.

BTO flats are a popular choice for many Singaporeans as they are generally more affordable and offer new and modern designs. However, BTO flats come with certain restrictions such as a minimum occupancy period before you can sell or rent out the flat. The location, nearby amenities, and availability of BTO flats can also be limited.

Resale flats, on the other hand, offer more flexibility in terms of location and size. As they are sold in the open market, you have the opportunity to negotiate the price with the seller. However, resale flats tend to be more expensive than BTO flats and may require renovation work.

Private properties offer the most flexibility in terms of location, size, and design. They also tend to hold their value better in the long run. However, private properties are the most expensive option and require a significant financial commitment. In addition, private properties come with additional expenses such as property taxes and maintenance fees.

Ultimately, the best option depends on your personal circumstances and financial situation. It's important to weigh the pros and cons of each option and consider factors such as your budget, location preferences, and long-term plans.

It's recommended that you speak to a financial advisor and do your own research before making a decision. Or simply reach out to us to have a chat!