SINGAPORE - In the heart of Ms Krystal Lim’s 1,600 sq ft executive maisonette is a 3m-long bar table around which friends and family would chat, eat and laugh.

The flat’s lower floor is for parties and gatherings, with the walls knocked down so guests can move freely between the dining and living rooms. From the open-concept kitchen, the 28-year-old can play host and keep an eye on everything.

Meanwhile, the upper floor and its bedrooms are a private area where Ms Lim can recharge.

Such a home layout would not have been possible if Ms Lim had gone for a Housing Board Build-To-Order (BTO) flat instead of her Serangoon North maisonette, which she purchased in 2021 for $760,000. The price tag and the flat’s age – it had 69 years left on its lease when she bought it – might have given some buyers pause, but Ms Lim has no regrets.

She is among a group of young first-time home owners who are turning to older resale flats despite their shorter leases and what can sometimes be much higher costs.

These buyers said they are driven by long wait times for BTO flats and a desire for bigger living spaces and amenities. 

The Straits Times spoke to seven property agents and analysts, who say they have observed a noticeable trend of young home owners – between the ages of 28 and 35 – purchasing resale flats that are sometimes two or three decades old.

In Ms Lim’s case, she and her husband had applied seven times unsuccessfully for a BTO flat in several areas. They managed to get a queue number only once – but it was so far back they did not manage to choose a unit.

Eventually, she and her husband exceeded the $14,000 combined income ceiling for BTO applicants and turned to the resale market.

While an executive condominium or a newer resale unit would probably have a higher resale value, they said they “wanted to value our lifestyle over investment”.

“We wanted this to be either a ‘forever home’, or (somewhere we’ll stay) for 10 years, so we were willing to fork out the money for this,” said Ms Lim.

Resale HDB flats typically cost about $100,000 to $150,000 more than similarly sized BTO units in the same area, although this difference can vary based on location.

For example, the four-room BTO flats in Tanglin Halt launched in October were priced between $537,000 and $702,000, while resale flats in the same area have sold for between $802,000 and $946,000 in the past six months.

Figures from HDB show that the number of first-time home owners who purchase resale flats has been rising since 2018. That year, there were 4,500 such families.

This rose to 5,000 in 2019, before it reached 5,700 and 5,800 in 2020 and 2021 respectively. In the first three quarters of 2022, there were 4,100 first-timer families who bought resale flats.

The figures were from a written parliamentary response from the Ministry of National Development in January. HDB did not respond to ST’s request for data and comment.

Overall, resale transactions for HDB flats that are 40 years old and above have risen from making up 11.6 per cent of total resale transactions in 2018 to 18.4 per cent this year, according to property research firm OrangeTee & Tie’s analysis of the data for the first seven months of each year.

First-time home buyers say the resale market gives them options in areas where BTO flats are not available.

Mr Dillon Lin bought his 47-year-old flat in Queen’s Road as it would cut his commute to work and other areas he frequents by more than 20 minutes.

“(The remaining lease) was a concern, but at the same time I had to weigh the travelling time to various destinations against a cheaper alternative unit or location, but having to compensate for the travelling time by buying a car,” said Mr Lin, 39, who lives with his partner.

Mr Lin, a lecturer, bought his 979 sq ft home for about $500,000 in 2021.

The longer wait time for BTO flats was another major impetus for some buyers, such as Ms Jen Tan, who said she was not keen to wait a few years for a flat.

HDB said in May that BTO flats have a median wait time of three years and five months, but some analysts said this can stretch to six years in some cases.

Ms Tan bought a 1,560 sq ft five-room flat in Lakeside with 76 years remaining on its lease in end-2020 for $620,000. What sealed the deal for her was the size, layout and its proximity to her parents’ home, although she had to settle for a less central location.

The unit has unique features, including an alcove in the bedroom with curved windows that looks out into greenery. She has turned that into a reading nook.

“Our intent was always to stay here for the foreseeable future, (we plan) to expand our family in this home,” said the architect, 30.

Property agent Ignatius Tang has seen over the past year six clients who bought an older resale flat as their first home.

“Their top priorities were the size of the flat, layout, and proximity to good schools and their families,” he said.

Another agent, Mr Alvin Kho, said the resale market offers “more choices in terms of locations, layout and amenities”. For instance, buyers looking for flats close to the city centre may find getting an old flat to be the only option.

For such buyers, these factors overshadow the fact that these flats have a much shorter lease tenure left, said agents.

Lease decay – the erosion of a flat’s value as the end of its 99-year lease approaches – may cause some buyers to hesitate over paying high prices for these old resale flats, but property agents say government grants have taken some sting out of high prices.

First-timer families buying two- to four-room resale flats are eligible for $80,000 in Central Provident Fund housing grants, while those who buy five-room or larger units can get $50,000.

There is also a Proximity Housing Grant of $20,000 for couples ($10,000 for singles) who buy a flat within a 4km radius of their parents’ homes.

Shifting home buyer priorities aside, analysts also attributed the rise in resale flat sales to BTO construction delays due to the Covid-19 pandemic.

This created a “sudden spike in demand” for more immediate space which BTO flats could not fulfil, leading home buyers to turn to the resale market, said Mr Lee Sze Teck, Huttons Asia’s senior director of data analytics.

Mr Luqman Hakim, chief data officer at 99 Group, said that the uncertainty of BTO balloting, especially in choice locations, can be psychologically taxing.

“The resale route to purchase houses in those locations... is less stressful,” he said.