Before we go into the nitty gritty details on buying uncompleted residential properties, let us take some time to understand what does it exactly mean to buy “uncompleted” residential properties. In summary, “uncompleted”residential properties are those that are sold directly by housing developers that are licensed by the Controller of Housing Act (COH). At the point of sale, the construction of the project may or may not have commenced. As such, purchasers generally make their buying decisions based on developer’s brochure, floor plans, project models and mock show units. Some of the hottest launches to date includes:- Treasure Crest (EC) along Anchorvale Crescent, Northwave (EC), upcoming Forest Woods (Condominium), Parc Riviera (Condominium).
So why buy “uncompleted” residential properties?
Naysayers have always been against the idea of buying uncompleted residential properties, citing reasons like no immediate rental yield, cash flow issues as well as adversity to future market sentiments. Today especially, when the property market in Singapore has been fairly lukewarm with since the inception of property cooling measures – like buyers stamp duty (BSD) and additional buyers stamp duty (ABSD), what other compelling reasons can a buyer look for to make the bold move of buying an uncompleted properties?
- Brand New
Well, since the property is not completed yet, buyers can be typically assured that they are buying units that’s brand new and first hand. Further, most of these brand new units comes with a one-year warranty period by the developer on defects within the unit.
- Choice of Units
Typically, for uncompleted residential properties, buyers can look at 3 phases of launch. The first and foremost phase is known to be a preview period:- where prices of launches are generally cheaper, more attractive as developers would rather sell out their units earlier, rather than let the development wait out till completion. This gives buyers who buy the uncompleted properties during the preview period more incentive to commit earlier as well. During the first phase as well, buyers usually do an expression of interest with their choice agents (agency) and come for a balloting exercise. As with all new launches in Singapore, condominiums/executive condominiums etc purchases, buyers typically get to choose their preferred layouts/room types/facing through a balloting exercise during the preview period of a new launch. During the second phase, there will usually be a price adjustment (upwards) by the developers after the first round of buyers have selected their units. Units will continue to be marketed and buyers will buy whatever that’s remaining after the preview sales. Lastly, the third phase would typically happen once the project has been completed or has achieved it’s Temporary Occupation Permit (T.O.P) status. The third launch phase may or may not happen depending on each developer’s strategy and sales during the initial launch phases.
- Rental Yield
Upon completion, new developments are typically easier to rent out and command a higher rent. Do note that this is assuming all else equal and you’re comparing projects in the vicinity that have/has been around for quite some time. Tenants, generally enjoy the idea of being “1st tenant” of a unit, given that they usually have more flexibility when it comes to requests on unit furnishings (i.e. your single bed/queen size bed etc.) and of course, the “warranty” on all appliances and unit comes as a great incentive to tenants.
- “Modern” Units
Uncompleted residential properties (new launches) usually have the latest and up-to-date layouts, finishes and facilities – e.g Visionaire (Smart-Homes EC) and 6 Derbyshire (Smart-Homes, Conceirge Services) and also GEM Residences (Club. Condo styles).
- Pay progressively
Payment for new launches and for uncompleted properties is usually in stages and there is no need to pay the FULL loan amount immediately. There also two payment schemes offered – a) Normal Progressive Payment Scheme (NPS) and b) Deferred Progressive Payment Scheme (DPS).
- No Commission Payable
Salesperson (Real Estate Agent)’s commission is paid forth by the developer.