As the HDB sells BTO units before it starts to build, purchasing a BTO is, in essence, purchasing a concept rather than a physical home. Therefore, there are some important factors to take in before deciding if it is the home you want. In our previous post, we factored in the location and estimated value of the Bidadari BTO

In this post, we will consider if 1) the unit is affordable for you and 2) the neighbourhood can grow in value.

(image: HDB/ AsiaOne)

Can I afford the BTO in Bidadari?

Once you know the price of the BTO, you should find out if you have the minimum income to qualify for financing. The SRX website has a Property Tracker that uses your property price and loan tenure (among other factors) to determine the minimum househould income required under the Total Debt Servicing Ration and Mortage Service Ratio requirements. 

However, take note that HDB evaluates the imposition of TDSR and MSR on a case-by-case basis for BTO purchases. In the table below, we have summarised the minimum income for each HDB room type – assuming no debt, a loan to value ratio of 80% and maximum loan tenure of 25 years at HDB rate of 2.6%. Final results may vary depending on the eligibility of an applicant for housing subsidies and other factors. 

Do I believe in the Bidadari neighborhood?

Whenever you purchase a home, you’d want to ask yourself if you believe the neighborhood has potential to grow and increase the value of your home. In order to get a feel for what type of price appreciation a buyer of a flat in Bidadari could expect, we looked at the price appreciation of resale flats in Toa Payoh HDB Town. 

Since 2002, the flats have done well and the average annual appreciation has ranged from 3.0 per cent to 5.5 per cent on a yearly basis. If you want to sell your house in the future, this estimation will come in useful. However, note that historical performance of comparables is no guarantee of future performance of the Bidadari BTO. Ensure you consult with a real estate and financial advisor to help you determine if investing in Bidadari is appropriate for your circumstances.

Read about the value and location of Bidadari BTO here.

(First published in SRX)