Singapore has a robust real estate market that is resilient. This creates a lot of interest in Singapore properties among both residents and foreigners. And in the topic of buying homes and investing, the main struggle is usually between getting resale or new launch.
What is New Launch? What is Resale?
In Singapore, it is possible to purchase residential units during the launch phase before it is constructed directly from developer. This is commonly known as new launch.
Resale units are from the secondary market where home seekers buy from other owners. The home seeker can only choose from whoever is intending to sell at the moment and procure the home from the available.
While these 2 are the main options available in the market, which is the better choice? This seems to be the most common question and struggle that comes up during shopping for a home. So today let’s check out what are the key differences and which may be the better option for you!
#1 New vs Older Units
Resale are usually slightly older units in the market while new launch are new. The age difference can range a few years to probably a couple of decades. New launch are usually available for sale almost within a year or two from being acquired by the developer. Hence the new launch units are usually much younger than resale market units.
#2 Waiting Time
One of the main difference between new launch and resale will be the waiting time to possess the unit or move in. For resale, as the unit is ready, once completing the sale-purchase process which usually takes about 3 months, you can move in or rent out almost quite immediately.
However on the hand, the building is still under construction for new launch. This usually takes about 3-5 years. Hence, if you are getting a new launch, you generally have to wait awhile before you can obtain your unit. Unless you happen to get it nearer to TOP date! It can dampen the excitement of getting a new home to have to collect the keys a few years later, though this is quite a common process with our BTO flats!
#3 Actual Unit Vs Show Flats
The second difference is you can only view show flats for new launch to have a feel of the unit that you are getting. As there are only specific unit types being done up for showflat, it is highly likely you may need to choose your unit based on floor plans. You may need a good agent’s help or visualisation skills! (Because the unit that you be getting will be less the beautiful ID seen in the showflat)
For resale units, you can physically see the actual unit (or by zoom) and get to feel the space, size and know the view! This is great if there is anyone of you which find it hard to visualise space or size.
#4 Mortgage Payment Timeline
For both resale and new launch, the downpayment timeline is the same. The main payment difference is on the mortgage portion. The full 100% mortgage payment for the amount loan that you took will commence immediately upon completion for resale. However for new launch, the mortgage payment be progressive to the full amount. The progress is in accordance to the building construction. And by TOP when you can collect the keys to your unit, the mortgage payment is at about 85% of the purchase price. It will be awhile later before you reach the 100%. For home seekers who prefer a lower commitment during the first few years, this may be a more comfortable choice.
#5 Renovation and Repairs
The next difference between resale and new launch is that you may need to do renovation for resale units. The resale unit may have been around for awhile and may need some touch up or reworks. Other than the typical maintenance and repair works that most owners will want to do for resale units, you may want to revamp the place to your own style and liking.
As for new launch, usually the unit comes with the flooring, white goods, wardrobe, kitchen and toilet fitting and a one year defect rectification period. Hence most owners do not do need to do much repairs or maintenance works and can move in almost when ready. This may help to save up quite abit on the maintenance and renovation costs for you.
#6 Options Available
The fifth difference is on the options available. Usually for resale, the units are available only if the owners are open to sell. There is no definite time line to when they be putting out their units in the market for sale. If you have an ideal development in mind but there are no units available for your choice, it is almost impossible to tell when the unit that you want will be available. New launch on the other hand, you are able to know all the units available. Even if the units are not released yet, as developers usually prefer to fully sell out before TOP, the maximum period is 5 years to wait. But most of the units are usually available for choice unless they are being taken up.
#7 Other Fees/Tax
Finally, the last difference is the fees and cost involved during the occupation of the unit. Upon possessing the unit, other than your mortgage, you have to factor in the maintenance fees and property tax to pay each month ( you can apply for instalment payment for your property tax). For new launch, while the mortgage is progressive, you need not pay the property tax or maintenance fees till you receive the keys for the unit.
We know there may be quite a number of differences between new launch and resale that can daunting when deciding upon which to choose. Depending on your requirements, you may find one option more favourable than the others.
If you are still confused which to choose, let us help to clear your doubts and decide!