• Post Author:

How to Spot A New Launch Condo Like A Winner?

buy-new-launch-condo

You have read the articles and seen the videos of how new launch condos perform better than resale condos as property investments.

And it is true to a large extent. In fact, it’s such a perennial debate, we addressed it in a recent article, “New Launch vs. Resale Condo: Which is the Best Choice for Smart Property Investors?”. 

buy-new-launch

I mean, just take a look at the numbers! Even amidst the pandemic-driven recession, sales of new launch condos are going strong – for the above reason.

The pent-up demand post the circuit breaker period has lead to a third consecutive month of growth in non-landed private homes – 1,080 new homes sold in July 2020. 

As such, my team and I have been busy working with our property investor clients to secure their winning investments during these few months.

Now that I have some time, I decided to consolidate and share with our readers, some key considerations I use to spot a winning new launch condo – for investment property purposes. 

property singapore

Table of Contents

Factors in Spotting A Winning New Launch Condo:

  • Due Diligence

  • Variety of Facilities

  • Low Maintenance Fees

  • Early Bird Discounts

  • Choice of Unit

  • URA Master Plan

  • Integrated Or Pure Residential Developments?

 

Let’s get started.

Due Diligence

To start off, we would always recommend doing sufficient due diligence on the developer and sub-contractors’ track record.

A simple Googling session will tell you more than you need to know.

Check if they have a good track record of developing similar projects, and if they complete the projects on schedule.

If you unearth complaints and lawsuits, that is a straight up red flag.

Variety of Facilities

One of the key perks of a new launch condo compared to a resale is the range of newer and more exciting facilities.

With the newer developments in recent years, we have seen developers out-doing each other consistently with introduction of better offerings – from dedicated concierge services, in-built smart home technology, karaoke rooms and even driving ranges (yes, golf driving ranges!).

From an investment property perspective, these could definitely increase the appeal towards a more discerning crowd of tenants and can probably garner you a higher rental rate.

While this can be an interesting appeal factor, do make sure to balance out with the possible higher premiums to pay on maintenance fees.

The general rule? The more facilities, the fees may be higher. The higher the fees, the lesser your returns.

So, do make sure to compare your shortlisted condos and see if the premium makes sense.

Low Maintenance Fees

We addressed it slightly in the previous point: the lower the better, so it doesn’t eat into your rental income.

The good news is, compared to most resale condos with similar facilities, it should be already lower, because of the absence of wear and tear.

Also, when considering the developments, do keep in mind that smaller developments where there are fewer units sharing the facilities tend to have higher maintenance fees. Tip: look at larger sized developments to keep the maintenance fees lower. After all, sharing is caring.

New Launch Early Bird Discounts – Time Your Entry

This is something you do not get when you buy a resale condo.

Many property investors prefer new launch condos because of the early bird discounts, “Star Buys” (more discounted rates from the developers) and freebies that could include furnishing discounts.

When you pick the right development, and time your entry right, these savings can range from tens of thousands to hundreds of thousands.

All of which will significantly improve your profit margin on the investment property right from the get-go.

new-launch-condo

So, when is a good timing? The initial phases are usually when many developers utilize the “Star Buy” strategy, heavily discounting units to spur on purchases and generate publicity.

The developers sell these units at a lower margin mean big savings for you.

There are those who suggest that holding out to purchase closer to the ABSD deadline would have the developers slashing prices due to pressure to sell out – but the truth is we rarely see the pricing (PSF) come down that significantly after a project gains traction.

Also, practically, buyers who enter at that timing would also have less choice when it comes to the units available.

Hot Tip: If you find a new condo development that you are interested in, be updated for news on discounted units.

Choice of New Launch Unit

For buyers who plan to stay in the property, usually this is up to individual preference. But for investors, it always comes back to the numbers.

Is the additional premium worth the higher floor and better view? Is paying an additional $200 per square foot worth an unblocked view?

While premium views with unblocked skylines, lush greenery and more are typically well liked, they come with a premium price tag.

Make sure you consider an in-depth on price differences to make the right decision for your investment.

Hot tip: Consider other conveniences which could make a difference to potential tenants but not have such a significant impact to the pricing. For instance, proximity to access gates and facilities. Or being strategically located away from the bin centres, roads or communal bbq pits which could be potentially noisier.

URA Master Plan

One of the key resources for analysis of potential property growth and appreciation is the URA Master Plan.

We covered the details in a previous article – URA Master Plan – Understanding Growth Plans For Singapore Investment Property.

By understanding the upcoming infrastructure developments in the vicinity and planned residential developments, it is helpful to envision the potential growth for the property.

The URA Masterplan is not fixed in stone. Plans can and may change. It is nonetheless comforting to have awareness of potential developments.

Integrated Or Pure Residential Developments?

Integrated developments, as their name suggests, are an all-in-one hub for entertainment, food, groceries and residential units.

Sounds like an amazing offer in theory, doesn’t it? Again, remember that this is a checklist for property investors – so the question to ask is if it translates in terms of numbers.

Let’s take a look at a case study of 2 developments in Punggol: An integrated development Watertown (in conjunction with Waterway Point Shopping Mall and the Mrt) and a purely residential development Parc Centros (320m away).

Both were launched in 2012, just a few months apart. Now let’s take a look at how they have performed in terms of capital appreciation.

new launch pricing

Over the same period of the past 8 years, Watertown has seen a gain in 10.12% in value whereas Parc Centros has seen a larger increase of 17.15%.

What do the numbers show? There is no real tangible benefit in picking an Integrated development over a purely residential development.

In fact, as an investor, it would be beneficial to invest a smaller sum (i.e. residential-only developments are typically cheaper than integrated developments), especially if the appreciation potential is similar.

Conclusion

In short, spotting a good unit is far more complicated than reading positive reviews or watching nice advertisement videos.

Be it buying for own stay or investment, due diligent homework should be done before making a decision.

Bonus for my readers

property-agent-fees

My readers can request a 1-time free 30 min Dynamic Property consultation. 

Please tick the option(s) most applicable to you.

Or

Testimonials

I have successfully helped hundreds of homeowners just like you since 2010

Mr Ang
Mr Ang
Read More
As a investor interested in taking advantage of the booming property market in Singapore, I needed a realtor with in-depth knowledge of the local market. Using his understanding of the various sectors of the market, Rick generated a investment progression report and we decided to buy a condominium in a choice area with huge potential for multiple returns in the future. Thanks Rick, I will definitely be doing business with you for a long time!
Ms Claire
Ms Claire
Read More
I am writing in to compliment Rick Huang for his invaluable service, for the sale of my Esparina Residences. The process was complicated but he was able to empathize with my situation and also provide brilliant advices that ensue the smooth transaction. In all, I am appreciative with his professionalism and human touch in this journey. Thank you!
Ms Ho
Ms Ho
Read More
I was sceptical about engaging a friend to sell our house. However, Rick has put himself out on so many levels just to ensure everything went smoothly, promptly and correctly at every stage. I trust Rick and would surely recommend him to anybody seeking to buy or sell a home! I do not usually post reviews but this is worth investing my time. Thanks once again..
Ms Malar
Ms Malar
Read More
His service is beyond my expectations. Always going the extra miles to serve his clients.
Ms Jo
Ms Jo
Read More
My husband and I started our home-search by ourselves but was met with issues soon enough as we were unsure of the important things and areas to look out for and we were also not experienced in the negotiation process with the seller’s representing agent. Soon after hearing our problems, I was introduced to Rick by a friend. The entire buying process quickly became swift and smooth; Rick understands our needs, puts our personal interest first, seals us a good deal and educated us along the way about the important things and areas to pay attention to. Thumbs up to Rick and we will recommend him to anyone for their home-search
Mr Eddie
Mr Eddie
Read More
"In short, Rick did an amazing job. He sold our house at a higher than initially discussed price and got us a good deal for our purchase. Both my wife and I are impressed with his professional yet friendly approach. We will definitely work with him again and recommend him to anyone."
Mr Liew
Mr Liew
Read More
Rick is a very down to earth person. No hard sell or pushy technique. He helped us in planning for upgrade and showing us how to invest in property with in depth property analysis report.
Miss Chong
Miss Chong
Read More
His service is superb. With his property mkt analysis skill, I managed to purchase my first property in Singapore. He is always patient and helpful whenever I have any query about property purchase procedure, especially the computation part of the downpayment. In nutshell, I am really grateful and appreciate for his support.
Previous
Next
Share on facebook
Facebook
Share on linkedin
LinkedIn

Have you learned something New Today? Please help to share.

Self Introduction

blog-pic

Rick Huang, Associate Deputy Group Director of OrangeTee & Tie, has been in the Real Estate industry for a decade.

He is driven, committed and is enthusiastic about real estate investments.

Today, he leads Team Youhome.sg, and together, he aims to provide his clients with the best experience in their property journey.

The team focuses on understanding the client’s finances and needs and is determined about delivering the best solutions and results for them.

Amidst the hustle and bustle, Rick enjoys quiet time and indulge himself in the intricate art of tea-brewing and teapot appreciation.

He would also take this chance to energize himself and reflect on his personal development and areas of improvement.

Related Articles:

Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)

Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)

Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)

What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)

Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)

Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)

What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)

Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)

Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)

Should you sell your EC after 5 years? – Read more (Selling EC)

Should you sell your MOP HDB after 5 years? – Read more (Selling HDB after mop)

Leave a Reply