The concept of new launch condos is gaining popularity in Singapore. People are willing to invest in the idea of owning a home. In fact, when they make the purchase, there is no actual home. The transaction mainly involves an agreement that the seller will develop a condo and hand it over to the buyer down the line. In some cases, up to 3 years can pass between the sale and completion of the transaction.
The idea is not to invest in a house that you will own down the line. In fact, a new launch condo offers much more than a secure investment. Here are five reasons why you should consider this option:
You don’t have to make the entire payment at the start. Obviously, since the home is yet to be constructed, no seller would expect you to pay the full amount. Instead, you have to follow a ‘progressive payments’ schedule. The major advantage here is that you can take the first step towards purchasing a home even if you don’t have significant capital. Your payments will extend over an extended period, which makes them more manageable for you.
Generally, the schedule involves certain milestones that the developer has to reach before the next payment is due. In other words, the new condo launch price breaks down into multiple instalments. You may have to pay up to 10% of the price of the condo after every six months, or as per a pre-agreed duration. The developer is bound to issue a Temporary Occupation Permit (TOP) to you after three years of the launch. At this point, you have to pay the remaining amount, i.e. 40% of the purchase price.
The breakdown of the payments structure makes it convenient even for people with limited income to consider buying a home.
You can benefit from the equity you have in your new launch condo. You are the first owner of the real estate, and therefore, in the ideal position to gain from any capital appreciation when you sell it off. The fact that you bought the property directly from the developer boosts your negotiation power. You didn’t have to pay a premium, which would be the case if you purchased the condo from the first or second buyer. In fact, now you are in a position to charge a premium on the purchase price, so that you can make a tidy profit.
Moreover, the great thing about buying a new launch condo in 2018 is that you don’t have to worry about depreciation. You can choose the property before the date of completion and eliminate depreciation altogether. Keep in mind that depreciation only sets in when the construction is complete. Also, be aware that you have to pay a stamp duty if you choose to sell the property within 4 years of purchasing it.
You don’t have to restrict yourself to the units a developer decides to put on the market. With new launch condos, you have a better chance of selecting prime units that offer great value and also suit your preferences. You can enjoy a better quality of life, picking a property that offers you a breath-taking view of the Singapore skyline. Picking a prime unit puts you in good stead should you decide to sell it in the near future.
No Out-of-Pocket Costs
Usually, when purchasing a home, you have to spend money on home inspection. The seller might pinpoint some issues with the home that you have to pay to repair out of pocket. The repairs and even small modifications can add to your overall cost of purchasing the property. When investing in a new launch condo, you don’t have to worry about any repairs or other similar costs. The developer will install new fixtures and fittings. Moreover, you will get a warranty for all the components, which again ensures you don’t bear any cost.
Continuing from the previous point, everything in a new condo will be new. From the fixtures to the fittings, and even the amenities you receive are brand new. You don’t have to worry about rust or corrosion, or even think about getting any repairs done. At least for the first few months, you will enjoy a hassle-free experience living in your new home. Furthermore, you don’t have to deal with funky paint colours, or any other design or décor choices a previous owner made, because you are the first owner.
So, as you can see, there are plenty of great reasons why you should consider purchasing a new launch condo in 2018. You can fulfil your dream of owning a home without breaking the bank. All it requires is a little bit of financial planning and some patience. In the end, owning a property is well worth the effort and investment!