Why Should You Buy a New Launch Condo vs Resale?
There are 4 key compelling reasons to why you should buy a new launch property vs a resale property:
1. A New Home Feeling
When you are looking for a place you want to call home, you will most likely prefer a brand new property as compared to a house that someone else has lived in. With new condos and especially buying directly from new condo launches, you are assured that you have a better chance of getting to choose your preferred layout, view, facing, furnishings and location of what you will call home for the next few years.
2. Quality Guaranteed
Quality is guaranteed when you purchase a new home as they are built with the most up-to-date developments in construction and workmanship. They also come with a one-year defects liability period, so if anything does go wrong during this initial period, you will be covered and are not required to pay for any correctional work.
In comparison to new condos or houses, if you have purchased a resale property, there are renovation costs and also the risk of unknown hidden costs that might surfaced after moving in. Defects such as leaking pipes, water seepage in walls and windows that are not known may only be discovered after handover.
3. Financial Incentive
- From a price and risk perspective, a new property is recommended over a resale. Let’s take a look at this case study:
Assume Seller A bought his level 10 property in Aspen Heights of 1323sf 20 years ago for $1.45m.
His neighbour downstairs (Seller B) bought his level 6 property of 1323sf 4 years ago for $2m.
Both are priced at $2.2m for sale even though Seller B is at a lower floor.. If you were a buyer and made an offer of $2m for both, Seller B is unlikely to accept as there he will be making a loss after taxes. Seller A will be more likely to accept your offer as he will make $550k profit from the sale.
A resale property poses such risk as some properties have already been transacted a few times and there is very little room for negotiation if the seller bought his property at a high part of the property cycle.
New launches and newly-TOP properties from developers are usually priced at the same range and hence you and your neighbours would have bought roughly around the same prices after making adjustments for higher/lower floors, facing and views.
- Resale condos, especially aging ones, have a hidden cost as the maintenance fee and sinking fund of the condo will go up. Major repairs and overhauls will be necessary after a certain number of years and will require contributions from property owners.
- When you buy a property at a new launch, often developers will have early bird discounts for early property buyers. Of course, that said, we have seen exceptions to this rule.
- A property that is purchased at the new launch stage has an edge over resale properties in terms of age. If you compare Condo A under construction (that will be ready in 3 years) to another 5 year old Condo B, in 3 years time, A is age but B is 8 years old already.
4. Attractiveness to Tenants
New condos and new houses hold a higher appeal to modern and better quality tenants as everything is new, shiny, working and full of lifestyle features.
Savvy tenants tend to go for newer condos as it means they are less liable to repairs.
Most tenants also like the fact that there are still valid warranties on the appliances. Your new condo will not stay vacant for long.