Published date: 17/05/2021
Since buying a home requires a considerable sum of money, getting one of our choices is not as simple as others might think. It requires a lot of planning and a whole load of consideration. Apart from the typical questions such as whether or not one should get a freehold home or a leasehold one. The primary concern that most home buyers have is whether they should buy a private resale home or a newly launched condominium unit. Here are some of the pros and cons you can look through to help you decide.
First off, for a new launch unit, everything will be brand new since you will be the first owner. Should you have bought a leasehold home, the remaining lease will definitely be longer than that of a resale unit unless the resale unit is a freehold condominium unit. The resale unit also means that you will be buying over someone else’s house, which means the appliances and other fittings have already been used before.
Image of Park Nova New Launch
Then, upon handing over the unit to the buyer, which is during the TOP date, the purchaser will have up to 1 year to check for any defects within the unit. If there are, the developer is obliged to fix any issues. This is known as the 1-year Defects Liability Period. However, if you are buying over an old resale unit, you will need to fork out a massive sum of money for the renovation works. Even if the resale house is newly renovated, the building materials, which include piping and wiring within the unit, might be old as well. This will also add to the cost for you as you will need to get these changed too. Not only that, but the facilities within the development will also be older.
In addition, for those buying new launch condominium units, they will enjoy the most capital appreciation compared to the subsequent buyer. It is so because they are purchasing directly from the developer. As for resale units, you won’t be the first owner; therefore, you will have to pay for the seller’s appreciation. And also, if you are planning to sell it in the future, you will need to mark up the selling price to make a profit. But keep in mind that the older a property is, the higher chance its value will depreciate.
Since the current property market is moving at a very slow pace compared to when it was at its zenith, primarily due to the implementation of the cooling measures by the government, developers are now setting a more realistic price with a lesser profit margin for their new launch condominiums. Besides that, they are also offering lots of other value-added goodies such as free lifestyle classes and high quality and top-notch fittings and finishing. The resale market for private property has also become more steady, with resale prices being more consistent. The price per square foot could even be the same or even lower than that of new developments currently undergoing construction.
Apart from that, units within new launch condominiums are generally smaller in sizes, similar to that of the new HDB flats. As for resale units, they often come in bigger sizes, translating to a higher quantum as opposed to a new launch of the same price per square foot. But then again, if you have a lower budget, then a new launch condominium unit could be a better choice for you.
Payment wise, new launch units go by a Progressive Payment Scheme, which means you do not have to immediately start your full instalment payment. However, for resale units, your full instalment starts shortly after becoming the new owner of the house. For homebuyers who are currently renting a place outside, a resale unit would be a wiser option for you.
Finally, newly launched units will require you to wait about 1 to 4 years before they are ready for you to move in. Also, since they are still under construction, you will need to depend solely on the showflat unit and floor plans to decide whether or not you should purchase it. But for resale units, you can move into the house within a few months and get to see the actual unit before making your purchasing decision. This will allow you to be more confident in your choice since you will see whether the layout and size of the unit can fit into your criteria. Besides that, if you are an investor, a resale unit will provide you with instant rental yield much more quickly than a new launch home.