Buying Subsale Condos in Singapore - Pitfalls to Avoid
Buying a sub-sale condo isn't the same as a new launch.
When I bought a sub-sale condo after decoupling our first condo, I was hoping it was a new unit with a shorter completion date.
However, I was shocked to learn a sub-sale can end up like a resale unit if your Sales Completion Date is after the key collection date. The previous owner could stay in your unit and dirtied up the place until the sales completion date. It was a complicated period as my lawyer and the previous owner's lawyer exchanged many emails, and luckily the owner decided not to collect the key from the developer in the end. Thereafter, I learnt to the Sales & Purchase Agreement can be amended in future to prevent such tricky problems, and most lawyers don't even advice or even know.
Below are some of the differences between sub-sale property and brand new launch that I only realized when I got my first sub-sale unit:
|Aspect||Subsale Property||Brand New Launch Property|
|Property Condition||The previous owner can use the unit and take all freebies until the Sales Completion Date||New and usually requires no renovation|
|Availability of units||Limited availability||A more comprehensive range of unit selections, depending on the ballot number|
|Waiting Time||Faster possession, depending on construction speed||Waiting period until completion|
|Eligibility for Grants||Not applicable||Eligible for grants for first-time Executive Condos owner|
|Capital Appreciation||Usually lower than brand new launch, but should appreciate a little when TOP||Potential for growth in value over time if it is a desirable project|
|Choice of Projects||Limited to uncompleted projects, and usually those that are 3 years after the first sale for the owner to avoid any seller stamp duty||Limited new launches every year based on en-bloc and Govt Land Sales|
Subsale Property: In the case of a sub-sale property, the key to the property and any freebies that might have been offered during the initial sales launch might have already been collected by the first owner when the sales were completed. The property's condition at the time of purchase can vary, and there might be a need for renovation or refurbishment, depending on the previous owner's usage and maintenance.
Brand New Launch Property: Brand new launch properties, on the other hand, are sold directly by developers before they are completed. As a result, these properties are new and usually do not require immediate renovation. Buyers have the advantage of receiving a fresh, untouched property with the finishes and fittings chosen by the developer.
Availability of Units:
Subsale Property: Subsale properties have limited availability since they are usually units that have been sold in the past but are being resold by the current owner. Buyers interested in a specific project will need to consider the limited options that are available on the resale market.
Brand New Launch Property: When buying a brand new launch property, there is a more comprehensive range of unit selections available, depending on the buyer's ballot number if there's high demand for the project. This wider selection allows buyers to choose from different unit types, layouts, and views.
Subsale Property: Subsale property buyers can potentially have faster possession of the property, depending on how far along the construction has progressed. This is because they are purchasing a property that is already completed or near completion.
Brand New Launch Property: Buyers of brand new launch properties usually need to wait until the completion of the construction before they can take possession of their units. The waiting period can vary depending on the project's construction timeline.
Eligibility for Grants:
Subsale Property: Subsale property buyers are not eligible for the same types of grants that are available for brand-new launch properties.
Brand New Launch Property: Buyers of brand new launch properties, particularly Executive Condominiums (ECs), may be eligible for certain government grants aimed at assisting first-time homebuyers. These grants can help reduce the overall cost of the property.
Subsale Property: The capital appreciation potential of sub-sale properties is usually lower compared to brand-new launch properties. However, sub-sale properties can still appreciate in value over time, especially if located in desirable areas.
Brand New Launch Property: Brand new launch properties have the potential for growth in value over time, particularly if they are part of a desirable project in a strategic location. These properties are often more attractive to buyers due to their modern amenities and facilities. The first owner of the sub-sale condo I bought, gained a whopping over $300,000 profit by purchasing 3 years ago with no seller stamp duty.
Choice of Projects:
Subsale Property: Buyers of sub-sale properties are limited to those uncompleted projects that were sold in the past and are being resold by current owners.
Brand New Launch Property: The availability of new launch projects each year is based on factors such as en-bloc sales and government land sales. This means that there are limited opportunities for new projects to be launched, and buyers have to consider the projects available in a given year.
Remember that while these differences can help guide your decision, it's important to consider your personal preferences, budget, and long-term goals when choosing between sub-sale and brand-new launch properties.
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He has been trading since 2008. He started this blog to share the journey about option trading. He dabbled in stocks, bitcoin, ethereum (in Celsius Network), ETF (lazy Dollar Cost Averaging) and also built websites for fun. He used this as a platform to share my experiences and mistakes in trading, especially options which I just picked up.