If BTO is not an option, and SBF/ROF is out of reach (failed multiple times), the only option left is resale flat. Is buying an old flat (above 40y) more viable or a relative new flat (Less than 10y)? - Seedly
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Seedly PFF 2019

Asked by Anonymous

Asked on 02 Mar 2019

If BTO is not an option, and SBF/ROF is out of reach (failed multiple times), the only option left is resale flat. Is buying an old flat (above 40y) more viable or a relative new flat (Less than 10y)?

Cheaper, less depreciation for >40y flats vs expensive, potential appreciation/higher depreciation for

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Zuhdy Farhan
Zuhdy Farhan, Consultant at Jna Real Estate Pte Ltd
Level 3. Wonderkid
Updated on 03 Mar 2019

Unless you are extremely sure that you will not be selling this flat and moving to a new one, I would strongly recommend NOT to get the old flat that is above 40 years.

Yes, cheaper, but depreciation for HDB flats are imminent after 40 years, which makes selling it in future a huge challenge + you would potentially be making losses.

< 10 year old flats still have some depreciation, but not as much. (In fact, there was an article by CNA which allegdly mentioned that up to 10/20 years, HDB flats depreciate less than condos of a similar age)

And depending on external factors (i.e. new MRT? new nearby amenities?) there may be a chance for appreciation. This has to look at URA's Master Plan to see if there's any potential. Otherwise, it's pretty tough.

Of course, there are other factors to look at, and this suggestion is purely based on the provided context and how the financing of HDB flats work.

Feel free to contact me for more information.

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Jim Tay
Jim Tay, Director at Jimtay.com
Level 2. Rookie
Answered on 05 Mar 2019

Hey! When buying an older flat, I second Zuhdy that you have to be sure that you won't need to sell either to cash out for retirement, or to upgrade to a new one.

Make sure that you don't outlive the remaining lease of your flat too!

Reason is because a HDB flat with a short lease depreciates very fast and is going to be very difficult to resell again.

A newer flat however, can still retain it's value well.

I would recommend not overstretching yourself though, if it's your first property. Go smaller, and upgrade later when the need comes.

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