7 Benefits of Purchasing a New Launch Property in Singapore
What are the 7 main benefits of purchasing a new launch property in Singapore as compared to a resale?
In understanding the target locations and properties in Singapore, there are a lot of factors to consider.
With relevant knowledge in this subject matter fine-tuned to the newest updates, we are capable of evaluating the financial patterns of the property market for you and keeping you abreast of each factor.
1) Progressive Payment Schedule
Since a new launch condo isn’t technically constructed yet, buyers aren’t expected to make the full payment right at the start – instead, it’s spaced out into what’s called ‘progressive payments’.
This makes new launch condominiums a great option for the buyer who doesn’t really have much by the way of upfront capital as it allows the buyer to pay the lesser loan and spread out his payment longer. This can help the buyer to have less stress in financing his mortgage.
Payments are made via bank installments or through CPF whenever the developer hits certain pre-determined conditions in construction as shown in the table above. This works out to a payment of about 5 – 10 percent of the purchase price every 6 months or so, until around the time the Temporary Occupation Permit (TOP) is issued (about 3 years from launch), at which point the remaining 40 percent falls due.
The smaller payments mean smaller, more manageable mortgage installment obligations; helpful to all buyers.
2) Capital Appreciation
Being the first owner of a property, you’ll be in the best position to reap the most capital appreciation from your unit if you decide to sell it.
Two main factors play into this.
Firstly, if you were a secondary buyer, you would likely have paid a premium on the property (since the seller would want to make a profit over his investment). That means when you sell the unit, you may be competing with neighbors who are able to ask a far lower price without sacrificing profit since they’d bought at developer prices, which is the lowest possible price. This means having to lower your asking price, effectively eating into your baseline.
Secondly, a new launch condominium will not have any asset depreciation. Depreciation only begins after the development is completed, so the closer you sell to the completion date. The lowers the depreciation, and the higher the opportunity for profit. Just be sure to wait at least 3 years from your purchase to avoid having to pay any Seller’s Stamp Duty (SSD) on your investment.
3) Greater Choice of Units
Buying a unit in a new launch condo means you have a buffet of units to choose from and are not restricted to selecting between the few units that people decide to put on the market.
You are more likely to have a greater chance of securing prime units on higher floors, with panoramic views. This makes for a nicer living situation for you, and also makes your unit more valuable on the open market should you decide to sell.
4) Free Repairs
The good news with new launch condominiums is that all developers provide fittings and fixtures that come with a warranty (usually lasting a year) should any issues crop up.
You have 1 year to ensure that the developer rectifies all issues from the polishing of floor tiles to the varnishing of wooden doors. Don’t forget the developer give a free 4 times air-con servicing for over 1 year.
5) Accordion New Fittings, Fixtures and Facilities
Another benefit of purchasing a new launch condo is that the fittings, fixtures, and facilities are going to be brand new.
Not only does it eliminate the ‘ick’ factor of pre-used fittings, but it also means less maintenance work for you since you’re getting them at their prime. You will be able to save on the cost of renovation.
6) Discounts and Freebies
Depending on the project, developers will give numerous discounts, vouchers, and freebies in the hopes of enticing you to purchase. This happens especially when the market is down or during the festive period like Chinese New Year.
Developers have gotten extremely creative in coming up with offers and deals to attract buyers. Such as VVIP discounts, stamp duty reimbursements, and Sta-and-Pay Scheme.
Granted, it does not mean you are walking away with a unit at half the price, but it does make the deal a whole lot sweeter. Saying yes to a newly launched condominium might mean a one to three-year wait to move in, but it’s safe to say there are plenty of reasons why it’s worth it.
7) Miscellaneous Fees
Best of all, you do not pay any property tax nor maintenance fee until the development is ready!