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Pros And Cons Of Buying A New Launch Condo In Singapore

Singapore New Property Launch

Most people will resist the idea of purchasing a new launch condominium because they mistakenly assume that such properties are too costly, too small, and not worth the investment. Do any of you ever wonder if the recently released Condo would be better for you in the long run?

New Launch Condo Singapore Property Launch

No doubt, you have to spend a lot of money to buy a newly launched property, but did you know that condo prices tend to go up in the near future? Let’s take a closer look at the advantages and disadvantages of purchasing a new condo in Singapore so you can decide if it’s the right choice for you.

Advantages of buying a new condo in Singapore 2022

At the time of purchase, buyers of a newly released condo are investing in an idea or concept of a house, not a physical structure. That concept won’t materialize in the practical world for another three years. As a result, why put money on something that won’t pay off for a while?

Gradual or Progressive Payment Plan (PPP)

You won’t have to pay the full purchase price up front while buying a condo during a new project’s launch, as it will take about three years from the launch date to obtain a temporary occupation permit (TOP). Because of this, potential purchasers won’t have to shell over a hefty sum all at once.

The property developer will issue an Option to Purchase (OTP) in exchange for a 5% booking fee paid in the form of a check at the project showflat. Once the booking deposit check has cleared, the builder has up to 14 days to provide the buyer with a Sales and Purchase (S&P) agreement.

To use the OTP, the buyer must sign the S&P agreement and pay 15% of the purchase price in cash or CPF. Once you sign an S & P agreement, you must pay BSD (Buyer Stamp Duty). It is due 14 days from the date you have signed the S & P agreement. The Stamp Duty (BSD) is a mandatory fee for all parties involved while transferring or purchasing real estate in Singapore.

The application process to withdraw CPF savings might take anything from six weeks to eight weeks. If there isn’t enough time, the buyer must first pay in cash. To make the monthly payments more manageable, the mortgage loan will allow you to spread them out over a longer length of time, often 25 years.

Return of Investment (ROI)

Most new projects’ value will go up when they get a Temporary Occupation Permit (TOP). Prospective buyers can go to the property development and look at the actual units and facilities. When your condo’s minimum holding period is over, you’ll be able to sell it and make much profit out of it. Before you can sell an Executive Condominium (EC) to a Singaporean, you have to own it for at least 5 years.

Get a discount

Property developers use promotional offers and giveaways as creative ways to get prospective buyers to buy their units. These deals are only available on newly launched condos. Some of the ways these developers try to get people to buy are by giving early bird VIP discounts and vouchers for furniture.

If you want to avoid paying Seller Stamp Duty (SSD) on a typical private residential property, you can’t sell it within 3 years of buying a new condo in Singapore. If you buy during the showflat launch, you’ll be the first person to own the condo. This gives you the “first mover advantage,” which lets you get the most investment returns out of the unit.

Expensive upcoming launches

Due to bidding in Government Land Sale (GLS) and en-bloc sites, the cost of land is going up. This means that future new launches will cost a lot. Increases in development charge (DC) and a lack of foreign workers will cut into the profit margin of property developers.

Disadvantages of buying a new condo in Singapore 2022

Time

Similar to a Build-to-Order BTO apartment, you will have to wait a bit before receiving the unit’s keys. Normally, a new condo in Singapore would be finished within three years. Therefore, if you need to relocate quickly, a recent launch condo may not be for you. Consequently, if you are a newlywed couple and are short on time, you should not buy a brand-new condo. You should instead consider renting for a while.

Size

For the same reasons why BTOs are smaller than resale units, a new condo in Singapore will be significantly smaller than a resale unit built before the year 2000. On average, a newly released condo is 85 square meters in size, while a resale condo with three bedrooms is 110 square meters. As a result, you should probably look elsewhere if sheer size is your primary concern.

Rental competition

You can also anticipate facing competition from other investors who are looking for tenants, and it may take some time for the prices to correct themselves after they have been artificially inflated.

You must take your current situation into account when deciding whether to invest in a new launch condo or not.  What is your present financial condition? What amenities do you want the condo to have? More importantly, what are your plans for the home? We hope that these few questions will help you decide which type of real estate investment is best for you.

Whatever your needs are, Singapore Property Launches’ qualified sales representatives from the different developers are ready to assist you choose wisely! Whether you need a newly launched condo near the MRT, a freehold or leasehold condo, or a condo with the lowest initial cost, we make sure you get the ultimate deal.

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