5 Points To Look Out For When Buying A New Condo

The Singapore property market is an extremely active and fast-paced arena. Buying a condo unit, for instance, requires a substantial amount of outlay, even if you are looking at a relatively small unit. Take a compact 600 square feet unit at a city fringe location as a working example. Assuming a psf of $1500, we are talking about a $900,000 price tag! And we have yet to factor in buyer’s stamp duty, additional buyer’s stamp duty (ABSD) (if applicable), refurbishment expenses and cost of mortgage….and perhaps some other miscellaneous expenses. All these add up, mind you!
For today’s discussion, let’s focus on investing in a new condo launch. What should one look out for before making that big decision? This article will arm you with some basic yet invaluable knowledge to help you decide.

Location, Location, Location

This is by far the most important consideration. If the new launch is within walking distance from an MRT station, half the battle is won. Top it all with presence of amenities such as popular schools, shopping malls and eateries in the vicinity, this new launch is a real gem! Of course, be prepared to pay a premium. Let me tell you, it is worth the while. You can expect fantastic capital appreciation, very healthy rental yields and good occupancy rate.

Future developments

Closely related to the above point, are there upcoming commercial, retail, recreational or public transport developments? Is the new condo launch going to be part of a bigger transformation? For example, the announcement of the second Central Business District in Jurong has created an extremely high demand for the new launches nearby.

Reputation of the developer

While the authority imposes very stringent requirements on property developers, it is still prudent to do some research on the developer of a new launch, especially if it is relatively unknown. Buyers may be enticed by attractive prices and other perks offered by these newbies, but don’t rush into it before doing some homework, unless you are prepared to take some risks. Also, do not yield to glib and sharp-suited agents, or taken in by impressive show units. If things are too good to be true, they usually are!.

Know Your Finances

With the introduction of Total Debt Servicing Ratio (TDSR), there is a restriction on the amount that can be used to service the monthly mortgage payment. Even with such prudence imposed, be brutally honest with yourself whether you are able to sustain the long term payment. While the progressive payment scheme is less taxing during the initial 2 to 3 years, are you confident of sustaining it once the full monthly amount kicks in?

Other Expenses

If you are a Singapore Citizen and this is your second property, an ABSD of 7% is imposed. If you are buying your third property or beyond, the ABSD increases to 10% of the price of the new launch. Be sure to factor in the ABSD as they can easily run into a 6-figure amount depending on your purchase price of the condo for sale Singapore.

Conclusion

The above points are discussed from a generic perspective. They form the very foundation before making a major decision in buying a new condo launch. Most importantly, be very sure-footed of your buying objectives. Be equally sure of your finances and constraints.