Should Buying A Low Lease Project Be A Viable Option?
TLDR When considering low lease projects in Singapore, it's crucial to evaluate your individual needs, financial standing, and future plans....
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TLDR
In the world of mega-developments, living in a large condo with over 700 units can bring challenges like ongoing renovations, competition in reselling, crowded facilities, transport issues, and potential collective sale difficulties. While these properties offer plush amenities, lower expenses, and green spaces, it’s crucial to consider how these factors may impact your daily life. Agents face tough competition in marketing units, residents may face transport struggles, and crowded facilities can disrupt leisure activities. Mega-developments often face hurdles in achieving collective sales due to diverse owner backgrounds and needs. It’s essential to weigh the pros and cons carefully before deciding to buy or sell in such developments.
In the big, bustling world of mega-developments, there’s one complaint we hear again and again: ‘Where’s my privacy?’ But here’s the thing – that’s just scratching the surface. There’s a whole heap more to consider that isn’t always talked about, mainly because marketing folks and real estate agents don’t want to ruffle any feathers.
Imagine living in a packed condo, where even booking a slot at the gym or BBQ pit feels like planning a military operation, especially during peak times like weekends or holidays. This is just one of several things you might want to think about before jumping into a high-occupancy condo.
Let’s dig deeper into these matters, giving you a clear picture of what you’re potentially signing up for:
What’s Considered A Big Or Mega-Development?
When we talk about mega-development, we’re usually referring to those massive projects that have around 1,000 units or more. However, in reality, even projects nearing that mark, say around 900 units, often face similar challenges. Nowadays, when someone mentions a “big” project, they’re likely talking about one with between 700 to over 800 units.
Let’s chat about some common hiccups you’ll typically bump into with these large-scale projects:
1. Ongoing Renovations & Moving
Imagine living in a huge block with countless units. It seems like any month, any day, there’s always someone making a racket renovating their place. And let’s not forget the tenants – it feels like a never-ending cycle of people moving in and out.
Yep, you guessed it – this is exactly why some folks steer clear of those massive projects filled with shoebox units. They can’t shake off the thought that most residents are just temporary tenants, always on the move.
One big problem? The noise. Depending on how the building’s designed, you might hear all the banging and scraping from two floors up, not just next door. Imagine how tough it would be if you’re trying to work from home, or if you’ve got a newborn who still needs their beauty sleep several times a day.
Another headache is the lift wait time. Those contractors and movers, bless them, could hog one of the lifts depending on their workload. And heaven forbid if multiple units are under renovation or new tenants are moving in or out at the same time – you might as well kiss that lift goodbye for the rest of the day.
Consider this – some condo projects only have two lifts per block. So, if one’s taken over by movers and renovators, you’ve got potentially hundreds of households all jostling for space in the only available lift. And remember, your food delivery folks, couriers, and cleaners need to use that lift too.
So, here’s a tip: If the condo has tons of units and not enough lifts per block, it might be smarter to opt for a lower-floor unit.
2. Competition in Reselling
In the world of property, real estate agents usually take on your rental or sale listing as part of their job. However, some confess they’re not big fans of huge developments due to the stiff competition they present.
Nowadays, most people hunting for a property start their search online. Agents have to fork out a fee to post their listings on these websites, and there could be further costs if they want to give their listing a little push. It’s a bit like internet advertising – you pay more to get your listing at the top of the pile.
For small-scale projects, this isn’t much of an issue. If your condo only houses 20 units, odds are your listing will be the only one there at the time. But if your condo is home to over a thousand units, and there are dozens of listings up at any given time…well, you get the picture.
The situation becomes trickier if you’re trying to rent out a unit. Commissions for finding renters aren’t as high as those for sales, but they require almost the same amount of elbow grease and cash.
So, even though most agents will still take on the task professionally, we can’t help but wonder if you might miss out on the cream of the crop. Or worse, find your listing placed on the back burner because of the extra challenges it presents.
3. Squeezing into Buses
Here’s hoping your project is just a stone’s throw away from an MRT station or, at least, a handy bus stop. If it isn’t, you might find yourself leaning on shuttle buses, crossing your fingers for a larger bus or more frequent runs.
Picture the morning hustle, with everyone scrambling to catch the shuttle to Shenton Way, Raffles Place, the nearby MRT station, and so on. It’s like trying to squeeze an elephant into a phone booth; there’s just not enough room for everyone! With hundreds of residents all needing a ride at once, you might end up waiting for the bus to swing by a second or even third time. It’s a bit like waiting for a crowded train to clear out, right?
We’ve chatted with folks from big developments who’ve thrown in the towel and decided to bike or walk to the train station instead, setting off bright and early to beat the rush.
4. Crowded Facilties
You know what folks usually ask about condo pools? They’re always like, “Is the pool big enough for everyone?” or “Does this huge condo have enough pools?” And honestly, those questions are totally fair. The good news is that developers get it, so they make sure there are enough pools (though tennis courts are a different story).
But here’s the thing most people forget to consider – the pool facilities. I’m talking about the changing rooms and showers. In bigger condos, especially the mega ones, you might find yourself stuck in a queue for the showers or changing rooms. This often leads to many giving up their swim plans and heading back home.
Now, if it’s just a few people per block, no biggie. But when the queue turns into a crowd, it gets messy. Imagine a procession of people, wrapped in towels and dripping water all over the place, using the lifts. The result? A soaked lobby and an elevator smelling strongly of chlorine, plus it’s extra slippery.
And let’s not forget about poolside facilities. Want a comfy spot with a deckchair and umbrella on the weekends or public holidays? You better be an early bird. Sure, there’s plenty of space in the pool, but good luck finding a free poolside chair or umbrella. This isn’t just a problem in big condos – even mid-sized ones struggle, not to mention the projects with 1,000+ units.
5. Potential En-bloc issues
It’s no secret that larger projects often struggle to achieve collective sales. The main reason? Developers have a strict five-year deadline to finish and sell all the units. This means that large condos only typically manage collective sales when developers are feeling particularly confident. However, something we don’t talk about as much is how hard it can be to get everyone on the same page when there are so many owners involved.
This is partly why smaller projects, those with 50 units or less, can sell collectively so quickly. It’s not just about the size of the land or the cost. It’s because getting agreement from a small group is much easier, plus these owners often share similar views and backgrounds.
However, with large or mega-developments, the picture changes dramatically. Owners come from a broad spectrum of backgrounds and have different needs and wants. You’ll find older folks who aren’t keen to relocate at this stage of their lives. There are others who are short on cash and might face financial difficulties. Some landlords would prefer not to shell out an additional 20% ABSD for a new property. And then there are foreigners, who if they sold their unit today, would have to pay a whopping 60% ABSD for a replacement.
The repeated unsuccessful attempts to sell Mandarin Gardens collectively is a classic example of how tough it can be when many units are involved, even during an en-bloc craze. Therefore, it’s hard to imagine a successful collective sale happening for such large properties unless there are significant regulatory changes down the line.
Not all is Doom or Gloom for Mega Developments
Sure, these properties come with their own perks – think plush amenities, lower expenses, and expansive green spaces. And yes, it’s true that smart architecture and efficient condo management can lessen many of these issues.
But let’s not kid ourselves, saying “less privacy” is really sugar-coating the possible downsides. So, if you find yourself facing the worst of these, consider how much it might mess with your day-to-day life before making a decision.
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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