If you are planning to buy a property in Singapore but can’t decide between a new launch and a resale property, or between a property under construction and a completed property, don’t worry.
Today, as a senior local real estate agent in Singapore, I have compiled all the pros and cons in the table below for your reference.
So, carefully evaluate the following points, and I hope this will help you make the best choice on your property buying journey in Singapore.
Pros and Cons of a New Property
New Property
| Pros | Cons |
|---|---|
| New building and facilities: New launch projects will be equipped with modern facilities, sustainable features, and smart home systems. | Waiting time for the new launch project to be completed: You may have to wait 3 to 4 years. If the unit is an investment property, this could mean forgoing rental income during this period. |
| Pricing of a new property: It is not uncommon for developers to offer promotional discounts to gain sales momentum at the project launch. Generally, developers may change their pricing strategy at different stages of the project launch, and you might see the prices of earlier purchases gradually increase as more units are sold. | Reality vs. the showflat: When buying a property, the quality upon completion is uncertain since the project has not yet been built. If there are numerous defects, or if the actual unit differs from what was presented, residents may face disputes with the developer. |
| Fresh 99-year lease: Assuming it is not a freehold or 999-year leasehold property, a new launch will have a fresh 99-year lease, making issues like lease decay less of a concern (at least for the next two decades). This is also an important consideration if you plan to pass the property down to your children. | |
| More unit choices: In a new launch project, you can choose from a wider range of units. In the resale market, however, the available units depend on what owners have listed for sale. | |
| Payment scheme for properties under construction: In Singapore, the payment scheme for properties under construction follows a progressive payment schedule. This eases your financial burden as payments are made in installments upon the completion of each construction stage. This could be 5% to 10% of the purchase price as the project is being built.
For new, completed properties that have obtained the Certificate of Statutory Completion (CSC), some developers may offer a Deferred Payment Scheme (DPS), allowing buyers to pay up to a 20% down payment and the remainder two to three years later. |
|
| Defects Liability Period (DLP): When you buy a new property in Singapore, the developer provides a 1-year warranty period. The developer is responsible for any defects in the unit, the housing project, and the common facilities. During this period, the developer is obligated to rectify defects at their own expense. | |
| Lower maintenance fees: The maintenance costs for the building and facilities of a new property will be much lower than those of an older condominium. | |
| Savings on renovation costs: New condominiums in Singapore come fully fitted, including basic painting, flooring, air conditioning, and appliances like refrigerators and washing machines. The kitchen and bathrooms will also be fully fitted. You only need to purchase light fixtures, curtains, and furniture to move in immediately. |
Pros and Cons of a Resale Property
Resale Property
| Pros | Cons |
|---|---|
| Ready for move-in or rent: Unlike a new property, a resale property is almost immediately available for occupation or rent. For the latter, this also means you can potentially start collecting rent much faster than if you bought a new property that has yet to be built. | Lease decay: If the project is a 99-year leasehold, be sure to check its remaining lease. Lease decay refers to the running down of a property’s lease, which can negatively impact its value. Generally, a property’s value decreases over time; as it becomes more difficult to secure loans for older properties, the pool of potential buyers may shrink. |
| Opportunity to buy below market value during a downturn: If a seller is in urgent need to sell, it’s possible to snag a unit at a lower price. | Older facilities and building: The project’s facilities and building will be older and may look dated. Additionally, the cost of repairing and maintaining an aging building, including its plumbing and systems, will be higher. |
| Certainty: There is greater certainty when buying a resale property because the project is already completed. You can physically view the property and conduct a thorough assessment. You can also observe the surrounding amenities and traffic network (e.g., whether traffic congestion is common during peak hours). | No Defects Liability Period (DLP): Unlike new properties, resale properties do not come with a one-year DLP. The buyer is responsible for carefully assessing the unit’s condition before purchase. Be meticulous—is there a cracked tile hidden under a rug in the living room? Such things matter, especially if you don’t plan on replacing the flooring. |
| No progressive payment scheme: When buying a resale property, there is no progressive payment scheme. The buyer must pay the 25% down payment (assuming no existing housing loan) upon completion of the transaction. Additionally, you will start repaying the monthly mortgage installments immediately. |
Conclusion
First, the key deciding factor is whether you are in a hurry to move in or rent out the unit. If there is a more urgent need, it is better to buy a resale property or consider a completed project that has already obtained its Temporary Occupation Permit (TOP). New launch projects take 3 to 4 years to complete, which is not suitable if you are eager to move or want to earn rental income immediately.
If you want the greatest potential for price appreciation, then buying a new property would be more suitable. However, before making a decision, it’s best to speak with a professional and reliable local real estate agent based on your needs and property goals, as everyone’s situation is different.
For further enquiries, please get in touch:
WeChat: sgleokwek
Telegram: sgleokwek
WhatsApp: Message us
