What to know before buying a 'new launch' condo in Singapore
'New launch' condos are popping up everywhere in Singapore. This article aims at helping you to make an informed decision before buying one of these 'new launch' condos, which are condominium units you buy on a floorplan sometimes even before any groundwork has started. Read on and avoid common pitfalls that could cost you thousands of dollars.
Before even starting searching
Before even starting your search, and especially if you are new to the property market, we recommend that you read our step-by-step guide on buying a property in Singapore. This will clarify if you are eligible to buy, explain your financing options, and the sales process in general.
Now there are some specifics to consider when buying a 'new launch' condo.
Intended use of the unit
Condominium units are generally intended for residential use. However some projects are marketed as SOHO (Small Office Home Office): Beware that the only possibility for you to use the unit as an office for your business is under the Home Office scheme from the Urban Redevelopment Authority (URA) which allows you to hire up to 2 foreign employees. You might also find so-called Mixed-Use developments: note that if you purchase a unit intended for commercial use, you may not use it as a residential unit as well.
Beware of the showflat
Showflats are model units recreated by the developers in their showroom to give an idea of what the final units will look and feel like.
First thing to take care of is simply the location. The showflat's location is not necessariily the location of the actual construction site. It sounds obvious, but better be safe than sorry.
Then be careful of what you see. It used to be common that showflats have glass panels instead of walls or higher ceilings than the final product. These obviously give a false impression of space. Some rules have been introduced in mid-2013 to address these problems, but be vigilant of these artefacts anyway. Other elements that might enhance the feeling of space include: removal of doors, mirrors instead of windows, removal of appliances which actually end up taking up a significant amount of space in the flat.
Finally, some units with a balcony or outdoor area might feature a furniture deck. If it is the case, clarify with the developer if it comes standard or if it is subject to an extra fee. Note that if the area exceeds 5 square meters, an authorization from the Building and Construction Authority (BCA) is required.
Recently listed 'New Launch' Condos
Let's get an idea of what is currently available on the market:
Loan Offer
Condo (Freehold)
Steinlachstraße 81 (D17)
S$
sqft / S$ psf
1 Bed / 1 Bath
Loan Financial
07310847059
Sanctuary @ Newton
Condo (Freehold)
480 Lorong 6 To Payoh,singapore (D12)
S$
sqft
3 Beds / 2 Baths
Homesu Sg
96445089
Cash Offer
Condo (Freehold)
New York, New York (D10)
S$
sqft / S$ psf
1 Bed / 1 Bath
Loan Financial
sumitihomelend@gmail.com
Loan Offer
Walk-up (99-y Leasehold)
New York, New York (D20)
S$
sqft / S$ psf
1 Bed / 1 Bath
Loan Financial
sumitihomelend@gmail.com
Cape Royale
Condo (Freehold)
Cove Way (D04)
Price on Ask
sqft
4 Beds / 1 Bath
PropNex Agent
97661678
The Essence
Condo (99-y Leasehold)
1 Chong Kuo Road (D26)
S$
sqft / S$ psf
2 Beds / 2 Baths
Santhi Yogesparan @Huttons Asia
98189609
Recent transactions
You can check the price of recent transactions on the official website of the URA.
Check the developer's credentials
Of course, it is safer to buy from an established developer than a new entrant. But beyond reputation, you should make sure that the developer is authorized to sell units (i.e. holds a sales licence).
Mandatory information from the developer
Here is the minimum information that the developer should provide to you:
- Site plan, location plan, and floor plan at scale;
- Floor area breakdown of the unit. Beware that bay windows, aircon ledges, and voids are included in the total area;
- Building specifications such as materials used on the floor;
- Possible conditions or restrictions imposed by the autorities;
- Any non-standard clauses from the Sale & Purchase Agreement (the final contract for the sale - see below);
- Past projects from the developer.
Parking space
Even if the project features a car park, it does not mean that you will get a parking slot. You should clarify this with the developer.
I found a condo that I like, now what?
Here is a brief summary of the next steps in the process:
- The developer will issue you an Option To Purchase (OTP);
- In exchange, you will pay between 5% and 10% of the unit price called the Booking Fee;
- The developer has 14 days to deliver the Sale & Purchase Agreement to you;
- Once delivered, you will have 3 weeks to exercise the OTP by returning the signed documents and paying the 20% downpayment (minus the Booking Fee already paid);
- Standard payment schedules for new launch condos are progressive (percentage of unit price):
- 5% to 10% as Booking Fee;
- 20% (minus Booking Fee) as downpayment upon signing the Sale & Purchase Agreement;
- 10% when foundation work is complete;
- 10% when the reinforced concrete framework of the unit is complete;
- 5% when the partition walls of the unit are complete;
- 5% when the ceiling/roof of the unit is complete;
- 5% when the door frames, window frames, electrical wiring, plumbing, platering is complete;
- 5% when the carpark, roads, drains from the building are complete;
- 25% when the Temporary Occupation Permit (TOP) is issued;
- 15% when the unit is complete.
- Note that Deferred Payment Scheme (DFS) schedules are not allowed since October 2007;
What is an Executive Condominium, or EC?
Executive Condominiums (or ECs) are not high-end condos, like their name suggests. ECs are condo-like developments regulated by the Housing and Development Board (HDB). The target audience of ECs are Singapore citizens who can afford a house better than the standard HDB flat but cannot afford private condominiums. Eligibility criteria are strict and include: income, age, family, and real-estate ownership restrictions. All eligibility criteria for ECs can be found here.
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