New launch condos, or new launch properties in Singapore are referring to new residential developments launch by developers, be it high-rise condominium and apartments, mixed developments, or landed bungalow/terrace/town house.
Usually, the project has not started building yet. In Singapore, after developers acquire the land and obtaining approval from government, and showflat or sales gallery is ready, developers will launch the project for sale. Sometimes before even started working on the foundation.
So, home buyers and property investors who buy a new launch property from developer will need to wait for 3 to 4 years before TOP ( Completion) where they can collect the key to either move in to live or renting out. Unlike resale or completed properties, where buyer can buy it and move in to live after sales completion of usually 8 to 12 weeks.
Therefore, the obvious question to ask is, “Why buy new launch property since I have to wait for 3-4 years instead of a resale property where I can move in immediately?”. Truth be told, on top of having to wait for 3-4 years (Assuming you buy during the main launch in the first phase), new launches are usually higher price compare to the resale and completed properties in the same location, as well as usually smaller in size.
Despite all these, statistically in Singapore, the transactions of new launches property are always much higher than resale transaction. In this blog we will discuss why is it so and some of the reasons why buyers are buying new launch condos and why you should consider it too.
Why Buy New Launch Property instead of Resale?
First Mover Advantage:
With new launch condos, buyers are buying directly from developers instead of home owner.
In the resale market, when a buyer buy a property from the seller, the seller is likely making some profit from the buyer, commonly refer to as capital appreciation. This way, the buyer who buy the resale property will usually have lesser room for capital appreciation in the future.
Whereas in the new launch property market, buyer buy direct from developer, without the middle man (the seller in resale market) making a profit, so buyer will have potentially much higher upside potential in the resale market. This is proven with facts and figures, where many buyers who purchased a unit from developer in the new launch are making nice profit in the resale market after the property is completed.
Some called this a first mover advantage.
In many projects by developers, developers increase the selling price gradually during the initial launch towards the completion of the project, and therefore those buyers who bought earlier in the launch will usually have paper gain even before the property is completed.
It has been proven that investor or buyer who buy new launch will have better chance to make some profit compare to buying older resale property.
Choice of Units:
One common problem buyer facing in the resale market is the available of units.
In a high-rise condominium or apartment, there are usually many units with different size, type, no of bedroom, facing, and floor. Most buyers have preference when it comes to buying a property. In a new launch condo market, this is not a problem as buyer have choice of units, choosing their desire type and size, as well as floor and facing, since it’s a new launch and most or all of the units are available to choose.
However, in the resale market, assuming the buyer shortlisted one particular condo or development, the availability of units are purely depends on which unit is on the resale market at that point of time. More than likely, the ideal unit is not on the market and if the buyer still want to buy, he or she has to compromise on some of their preferences or criteria.
So this make new launch properties an ideal solution for home buyers.
Progressive Payment Scheme:
In Singapore, new launch properties or Buildings under construction are using progressive payment scheme, which means buyer, with or without mortgage, will be paying in a progressive manner, according to the table below:
A progressive payment scheme will be good for the cashflow for the home buyer and investor. For buyer with mortgage, that’s no need to pay the full instalment yet during the 3-4 years of construction period, only paying the progressive interest. And for buyer or investor without mortgage, it’s very good for the cashflow as they don’t have to pay the 100% of the property price in one go, as it is pay stage by stage throughout the next 3-4 year.
New, Better Facilities and Design:
With new technology like smart home system, more modern design, facilities, and landscaping, and higher end and more functional interior design, quality and finishes, and fittings, a new launch condo is without question more appealing than an old resale property that’s 10-20 years old.
As society is getting richer and wealthier, the demand for a better quality of living is increasing. A good new launch will be able to satisfy the demands of the modern buyers, in terms of provision, design, quality and concept, and luxury living.
Today, many new launch condos come with the latest technology of smart home system, concierge service for luxury living, different kind of theme in the facilities, as well as much nicer and modern facilities for home buyer to enjoy. Just like owning a brand new car is much more appealing than a 5 to 10 years old car, the same goes to the property as well.
Therefore, it is no wonder that more home buyers are being attracted to new launch condos than the older resale properties.
Buying a future property at today’s pricing:
Lastly, buying a new launch property also allow the buyer to buy a future property (new launch will be completed 3-4 years later) at today’s pricing.
Statistically, property prices are always going up in the long run, so it’s safe to say that property will likely to be higher price in the future than it is today. With new launch, you can buy a future property at today’s pricing, which will give you the edge and potential to have capital gain and appreciation in the future when the new launch condo completed.
Above are not all the reasons why buyers prefer to buy new launch as compare to resale, but these are some of the common reasons, in my almost 10 years of experience dealing with property buyers, sellers, and investors.
Let’s say you are convince that what you want to buy is a new launch instead of resale, with so many new launch projects on the market, which one do you buy?
In the next article, we will explore some of the strategies and considerations when it comes to which project to buy and which projects to avoid.
At www.luxurycondosingapore.com, we have the wildest range of new launch projects in Singapore, and therefore we are always very objective and resourceful when we do consulting with home buyers.
Below are some of the recent new launch condos in Singapore (2018 and 2019)
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