New Launches

A new launch project means a property development that is still currently under construction. This “sell and build” concept is the preferred method as it allows the developer to manage their cash flow during construction. The developer’s reputation and past performance is an important indicator for such projects. Higher risk equals higher return, which means that once construction completes, the value of the property appreciates at a much higher rate. This is one of the benefit of buying new launch property.

It is extremely important for house buyers to take note of the terms “newly launched” and “pre-launch” during sales because developers are only allowed to launch once they get the advertising permit “AP” and must complete their properties within 3 years, unless extension is obtained from the local state authority. Therefore, it is important to always buy new launch project from strong and reliable property developer.

Below are the pros and cons of purchasing a new launch property.

Pros of new launch properties

– High rate value appreciation. New launched property is generally cheaper and value upon completion of construction varies depending on the quality of work, reputation of developer as well as location and demand of the property.

– Discounts and freebies. Due to the extreme competition between developers and the weakening of the economy, it is common for developers to offer discounts to purchasers in the form of rebates, waiver of legal and disbursement fees, etc.

– Warranty provided. A new property usually comes with a standard 18-month defect liability period of which the developer will fix and rectify defects found within their unit. These include but are not limited to leakages, wall cracks, loose doors, and etc.

– Easy access to property information. House buyer can easily obtain all necessary information directly from the developer’s showroom or office.

– Completely new. You get to enjoy all the new fittings and furnishings as well as stay in a new community with the new amenities.

Cons of new launch properties

– Higher risk. Property buyers of new launch do bear the risk of the developer abandoning or delaying a project due to cash flow problems, as well as uncertainty on the quality of the final product as buyers were only exposed building model and show house gallery.

– Additional commitment. Purchasing a newly launched property typically means that you are legally obliged to pay at least your interest on loan outstanding. Hence you may incur double the commitment of rental fees as well as loan repayments.

– Final product discrepancy. An uncompleted project signifies an incomplete end product, not only the property unit itself but as well as public amenities and infrastructures such as roads and bus stops.

– Long waiting time. Sometimes the waiting time could be from 3 to 5 years, so apart from being able to withstand financially, you have to remain patient.

Conclusion

Therefore, if you are considering buying a property for own stay, please do ensure you have adequate cash upfront to meet your cashflow needs on down payment and other incidental fees. Detailed cashflow needs such as 10% down payment, SPA legal fees, Loan Agreement legal fees, and etc which need to be paid upon completion of the property purchase in a subsale unit. However, for undercon project, some of these costs may be sponsored by the developer, or offset against rebaste, hence you may not need that much cash upfront.