Property: What to know about Sale of Balance Flats (SBF) scheme before you apply


Build-To-Order (BTO) flat or resale flat? That’s a common question on every Housing Board (HDB) flat buyer’s mind, although, there is a third option — balloting for a home through the Sale of Balance Flats (SBF) scheme. These may be brand new flats left over from previous BTO sale launches, surplus Selective En block Redevelopment Scheme (SERS) replacement flats, or units whose buyers backed out on the purchase. They may also be older flats that were repurchased by the HDB.

Whlie BTO exercises are held four times a year, SBF launches happen only in May and November, concurrently with the BTO launches. If you are trying your luck at getting an SBF unit this year, consider the following.


1. You’ll get your brand new flat faster than going through the BTO route

BTO flats take at least three years to complete and SBF launches offer a shorter wait for your new crib. Depending on what you choose, you may get your flat almost immediately for completed projects and Repurchased Flats, or at least look forward to a shorter wait for the BTO flats.

At last November’s SBF sale, one-third of the SBF units were already completed while the rest were under construction. If you had successfully booked a four-room flat at Ang Mo Kio St 44’s Blk 455C (the 1,001sqf unit costs $445,100), your flat’s delivery possession date can be as early as February 2018.

…But prepare to pay more for the shorter wait

Like BTO flats, SBF units are also greatly subsidised, compared to the transacted prices of similar resale flats in the neighbourhood, but they still cost more than if you’d joined the BTO queue. This is because the flat’s price is adjusted to the current market rate. One buyer who shared his experience on local forum Hardwarezone.com.sg said that he paid $30,000 more for his SBF flat, compared to neighbours who applied via the BTO route. Another paid $50,000 more than its BTO price; however, he only waited for one year compared to over three years.

            During the recent SBF launch, 25 units of five-room flats at Bukit Merah were available, priced from $553,000 onwards. One 1,205sqf unit at Blk 9A Boon Tiong Road, within walking distance to Tiong Bahru MRT, was completed in January 16 and cost $637,700. That is over $200,000 cheaper than an 11-year-old resale flat of a similar size at Blk 8A, which is marketed at almost $850,000!


2. You get to pick from many estates island wide

While BTO launches focus on a few estates, SPF exercises offer a much wider choice. The recent February 2017 BTO launch has over 4,000 flats in four towns: Punggol, Woodlands, Clementi and Tampines. But during the November 2016 SBF launch, HDB released 5,008 balance flats in 11 non-mature towns and 14 mature towns/estates. Although the majority (3,654 flats) were from non-mature towns, there were still 1,354 units from mature towns, including in highly coveted estates in Queenstown, Bukit Merah, Bishan, Ang Mo Kio and Toa Payoh.

At Queenstown, there were 84 flats available, ranging from two-room flexi (short-lease) ones to an executive flat. We spotted several choice units at Sky Terrace @ Dawson, a swanky looking Sersproject completed in 2015. Ang Mo Kio had 38 units of two-room Flexi (short-lease) to five-room flats.  

Bigger homes for extended families were also available in both non-mature and mature estates. Non-mature estates like Bukit Batok, Choa Chu Kang, Hougang, Jurong East, Jurong West, Sengkang, Woodlands and Yishun all had leftover 3Gen and/or Executive flats. Out of the 14 mature estates, Pasir Ris, Queenstown and Serangoon had just one Executive flat each. East-enders may have better luck at Tampines, which had 12 units of 3Gen and three Executive flats. 

…But you’ll be choosing from the leftovers

Many BTO exercises, particularly in popular estates, are oversubscribed right from the get-go. For example, on the first day of last November’s BTO launch, 271 applicants signed up for just 158 units of four-room flats at Kallang, which are priced between $497,000 and $584,000. 

So, there must be a reason why some flats are not chosen. Usually, these are on low floors, in unfavourable locations such as facing the centralised rubbish dump, or may have inauspicious-sounding unit numbers such as #04-04, which Chinese buyers tend to avoid.

But some may be carefully selected BTO units whose buyers had changed their minds, perhaps because they eventually bought an SBF or resale unit instead. And if you look hard enough, you may even find SBF units on high floors. At Dawson’s Blk 90, three mid-floor four-room flats were available, ranging from a 1,044sqf unit on level 13 for $586,600 to a smaller 936sqf unit on level 22 for $582,400. We also found a 1,216sqf five-room flat at Ang Mo Kio St 44’s Blk 455B — on a breezy level 33! — for $607,000.


3. You can pick up a Repurchased Flat at a hefty discount

Repurchased flats are older flats that were sold and returned to the HDB for various reasons, such as the previous owners may have been unable to keep up with the payment, or a couple getting a divorce before they completed their Minimum Occupation Period of five years. Buyers can move into these vacated flats as soon as the paperwork is completed.

            We spotted a 37-year-old Repurchased four-room flat at Ang Mo Kio Ave 5, Blk 535. The 979sqf unit is a steal at $357,200 — 30 per cent cheaper than the last four-room flat sold in the same block, which fetched $465,000 in Dec 2015! In another hot spot, Bishan, a 31-year-old four-room Repurchased flat at Bishan St 12, Blk 106, near Raffles Institution was available for $395,200. Its neighbor was sold for $510,000 on the resale market in February last year.

…But your flat may come with its own sometimes unsavoury history

The most common woe Repurchased flats’ buyers face is when loan sharks turn up to collect debts incurred by the previous owners. We have heard of horror tales of new owners waking up to paint-splashed doors and ‘Owe $ Pay $’ messages scribbled on walls. Fortunately for one buyer who shared his story on a local forum, he only faced a letterbox stuffed with debt claims from loan companies. That soon stopped after he informed the companies that the previous owner had already moved out. “I got [my flat] at 25 per cent discount compared to the resale price at the time, so it was all worth it,” said the happy buyer whose flat is on a high floor with unobstructed views.

Do visit the Repurchased flat to look out for tell-tale signs of trouble, such as walls painted over to cover messages from loan sharks or notices stuck on the door. Try to chat up the neighbours to find out about the previous owner’s history. One potential buyer checked out a unit at Sengkang and changed his mind after seeing the “calligraphy” on the walls. However, rumour has it that sometimes, these may be the work of desperate fellow balloters who hope to scare off competitors keen on the same unit.

In extreme cases, the Repurchased flat could have been sold back to HDB because a tragic incident, such as suicide or a murder, had occurred in the flat. Depending on how superstitious you are, this may be an instant deal breaker — or an opportunity to buy a flat at a hefty discount, with no competition!


What are the chances of getting one?

Competition is notoriously stiff for SBF homes. Like BTO flats, more SBF units are allocated to first-timers who need a home more urgently than upgraders. Since November 2015, 40 per cent of the two-room Flexi flats are set aside for elderly applicants; any unused quota is then distributed amongst the other households. Depending on whether the flat is in a mature or non-mature estate, the SBF distribution for non-elderly applicants will also differ. For example, for two-room Flexi flats, half the stock are reserved for Families under the Parenthood Priority Scheme; 30 per cent for Multi-Generation Priority Scheme families; 10 per cent for other families; and the remaining 5 per cent for singles. For two-room Flexi and bigger flats, the ratio for families under the Parenthood Priority and Multi-Generation Priority schemes remain the same. However, other families enjoy 15 per cent of the allocation, since singles are not allowed to purchase BTO flats bigger than a two-room unit.