Buyhouse
 061  img 5963 small

What are the Pros & Cons to buy new or secondary property (newly launched or subsale units)? Let's discuss / advise.

 061  img 5963 small

In my opinion, if you have a higher budget allocated for downpayment, it would be safer to buy a subsale property instead. If you don't have much budget allocation for initial downpayment, best to go for new launches as most developers will provide interesting packages, freebies and good offer during launches.

I personally prefer to buy brand new properties. Reason being:-
(1) New condition, interior & facilities. More glamourous la :P
(2) Higher ROI after completion if I want to sell it off.

BUT of course there's a risk, especially if it's not from an established developers (like Sime Darby, Sunway, SP Setia, etc). What if the project is abandoned half way through? Kinda scary just thinking about it.

D  c0392b small

I will write 3 each and let the rest come out with more :)

New Property
Pros
1. Lower upfront payment.
- Usually developer gives discount in the form of down payment. Some even go to the extend you will get cash back once bank loan is approved.
- Potentially save on S&P, legal fee as developer would love to absorb it for you so that the developer can have better control proceeding the transaction.
2. New building. You don't worry much about the 20 years old piping / electrical wiring / tiles coming up anytime / room falling off anytime.
3. Capital appreciation upon completion.

Cons
1. Waiting period is 2-3 years. If you need a house immediate for family planning purpose, tough luck.
2. Risk of developer abandoning project. You will stay stuck serving the interest to bank.
3. Uncertainty of living condition upon completion. You might get an unit with poor workmanship. You might get an annoying neighbour. You might have a committee team that are not committed to take care of the well being of your neighbourhood.

Subsale 
Pros
1. Value for money. Not worried about developer changing overly expensive. You can bench mark your purchase price with recently transactions in the neighbourhood. You can potentially negotiate for a better price.
2. Immediate possession. Your unit do not have wait for 2-3 years to be ready. No risk of developer abandoning the project.
3. What you see is what you get. You can survey the neighbourhood, check out the committee team, and even hire a professional inspection team to inspect the unit you plan to buy.

Cons
1. (Very) High upfront payment.
- Minimally prepare 15% of the selling price. 10% go to downpayment. 5% go to other transaction fees (such as S&P, legal fee, etc).
- Renovation if the unit is not new
2. Higher involvement in transaction process. You might need to call up your lawyer to chase on his progress. If you are unlucky you might also need to get your lawyer to chase the seller lawyer. If you are getting a leasehold high rise that do not have a strata tittle, you might also need to follow up with your developer or land office.
3. Very little capital appreciate upon completing your purchase. Does not make sense for investor to flip unless the unit is bought at severely under market value or investor hold it for a very long period of time.

 061  img 5963 small

@danielfoo, wow! Such detailed explanation. Me like :D

Photo2 small

In my opinion...

The Pros
New project - low down payment
Subsale - immediate rental income to build better income so can get higher loan and buy more.. :)

The Cons
New project - may have to hold for some time after completion before able to rent out as selling may not make the max profit. (due to RPGT & penalty)
Subsale - huge amount of capital required & low loan margin for 3rd loan onward (70%)

13615 10153703410373712 1093131854153132234 n small

Buy new launch only when you know who to buy it from.

Buy subsale only when you know where to buy it from.

If you have spare cash, lots of it, and still do not fit any of the above, then you shouldn't be buying property. Invest in yourself first.

Unnamed small

Subsales more cash to paid but can move in faster and what u see what u get. New launch depend on developer packages, some is less cash paid, price expensive, got risk of developer hit and run, but new condition, new model and new faclities

Don't Miss Out On This Offer!