Beyond Tenure: Why These Buyers Chose Older Leasehold Condos in Singapore
TLDR Older leasehold condos in Singapore may face skepticism but offer key benefits such as affordability, location, and flexibility. Three...
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TLDR
When buying a new launch condo, don’t just rely on show flats or sales pitches—look deeper. Watch out if nearby land plots have been sold for less, as this may affect your resale value. High agent commissions and sudden spikes in advertising could signal slow-moving projects. Be cautious with claims about school proximity; not all blocks may qualify for priority enrolment. Always ask about previous transaction prices to avoid overpaying, especially if you missed early-bird deals. Finally, pay close attention to unit layouts, not just total square footage—inefficient designs can make a space feel much smaller than it is. Sales teams rarely highlight these drawbacks, so do your own research before committing.
New launches can be quite challenging, as they often exist only on paper, as concepts, or within show flats designed to highlight the positives while concealing the negatives. Although agents have a strong motivation not to misrepresent facts (as their licenses are at stake), they tend to refrain from sharing more information than is strictly necessary. The sales pitch is essentially a curated presentation, showcasing the appealing aspects that divert attention from possible concerns. Therefore, let’s examine the elements that sales teams frequently downplay: the warning signs and potential issues you should be vigilant about when considering new launch condominiums.
1. Nearby land plots have been sold at reduced prices.
We consistently recommend that you consult the URA Master Plan personally to investigate nearby residential plots. This helps you ascertain whether potential future developments could introduce additional noise and traffic or obstruct your view.
This becomes particularly concerning if a neighbouring land plot has already been sold at a price lower than that of the property you are considering. The challenge with using the URA Master Plan for this purpose is that such details are not readily apparent on the map; you will need to navigate to the overlays and check the Government Land Sales tab to find this information.
For example, this was a notable concern for some purchasers of Pinetree Hill. Pine Grove Parcel B was sold for $1,223 per square foot per plot ratio (psf ppr), which is 7.2% less than the $1,318 psf ppr for Pinetree Hill. While this discrepancy could be attributed to the effects of Gross Floor Area (GFA) harmonisation, there is no assurance that developers will launch their projects at a lower price. However, it’s important to acknowledge the inherent risk involved.
The primary worry is that you might be overpaying, as a higher land bid influences the overall prices you will face. If a nearby plot is less expensive yet offers similar locational benefits, this could mean that the project on that adjacent site might enable buyers to secure a more favourable entry price.
Keep in mind that this factor alone does not necessarily indicate that a project is undesirable, as elements such as quality, amenities, layout, and so forth will significantly influence the overall appeal. Nonetheless, it is preferable if surrounding plots do not present any competition or are priced similarly or higher.
You will need to conduct some research on your own since it is unlikely that the sales team will provide much insight on this matter.
2. The commissions provided, along with any unexpected spikes in advertising.
The commission for new launches is typically higher than that for resale properties. In today’s market, a common rate is between two to three per cent, although there have been instances where commissions have reached five per cent or even more, particularly for challenging high-quantity units. While specific studies on this matter are lacking, elevated commission rates can impact the motivation to finalise a project. Therefore, it’s important to remain aware of this, although obtaining a direct answer may prove difficult, and such information is unlikely to be included in any official materials.
However, you can make some educated guesses based on marketing efforts. For a completely new launch, it can be challenging to assess, as there is often an initial surge of marketing activity. For larger launches, you can anticipate a more focused marketing strategy from both the agencies and the developers. If a new launch begins to feature prominently in advertisements and social media after a period of inactivity, this could indicate that the developer has increased commission rates. The noticeable uptick may reflect a wave of newly incentivised agents eager to sell units.
It’s important to note that projects with higher commissions aren’t necessarily negative; rather, the concern lies in the possibility that agents may be inclined to promote less suitable projects for you in favour of those that yield them higher commissions.
3. The Home School Distance may not be relevant for all blocks, but this will be minimised.
Proximity to a desired school is crucial, particularly for securing priority enrolment, which requires being within one kilometre. This distance is determined using OneMap and is reliant on your postal code, yet sales representatives often overlook this detail. They may simply state that a project is “within one kilometre.”
However, it’s essential to note that some blocks within a development could have postal codes that fall outside this range. For instance, at The Woodleigh Residences, postal codes 367804 to 367806 are eligible for priority enrolment at St. Andrews Junior School, while others are not. Many buyers often recall only being informed that the project is within range. We don’t believe agents intentionally mislead; however, if you don’t ask for specific information, such details might not be disclosed.
A potential indicator of this situation could be the pricing structure. If you notice that one block is significantly more expensive despite having largely similar layouts and features, it might be linked to its enrolment eligibility distance.
4. Withholding information about prices that have previously been agreed upon.
When you’re paying a median or lower price, agents are typically eager to disclose what others are spending. This serves as a strong motivation for you to proceed with your purchase. Conversely, if you’re considering a price that is on the higher end, or perhaps the highest, they may become less forthcoming with information.
We recommend that you always inquire about how much others are paying and, if you’re unable to get a satisfactory answer, consult alternative sources (feel free to contact us if you need assistance). This is particularly important if you’re purchasing a few weeks or months after the initial launch. For instance, you may have missed out on the VIP or VVIP previews, where prices are generally the most competitive, or perhaps you missed out due to family or friends’ pricing or bulk unit purchases.
It’s crucial to avoid overpaying for obvious reasons, but there’s another consideration that many buyers overlook: paying a premium can limit your negotiating power in future sales, as other sellers will have greater flexibility in their pricing. Thus, not only are you spending more upfront, but you’re also creating an additional challenge for yourself during later negotiations.
5. Often, the focus is placed on square footage rather than the layout when considering whether a space is sufficiently large.
Merely having the correct square footage is insufficient. The layout is crucial: two units could each measure 700 sq. ft., yet one may feature a second bedroom spacious enough for a queen-sized bed, while the other only accommodates a single bed. Similarly, factors like the presence of a service yard in the kitchen or structural elements like beams and pillars that restrict flexibility also matter.
Frequently, when you express your family size and requirements, these considerations are overlooked—you may find yourself directed towards a particular layout simply because it meets the square footage criteria.
Moreover, layouts that are less efficient, such as those with unusual nooks or wasted corridor space, tend to be less desirable. If you are a first-time homebuyer and not well-versed in this aspect, you might encounter these less appealing units being presented to you. This situation is more common during later sales phases when only the remaining units are available. Keep in mind that sometimes these properties are left unsold for a reason!
If you struggle to obtain more comprehensive insights or would like a personalised tour, don’t hesitate to contact me. I can offer an unbiased perspective on the properties you’re considering, whether they are newly built or resale.
For a more detailed consultation, feel free to reach out here.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
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