New Launch Condos in Singapore

What is a new launch?

In Singapore, "New Launch condo" is a very common term used to refer to the sales launch of Condominiums which are have not been constructed or are still under construction.

On the other hand, T.O.P Properties refer to those newly constructed but are ready for occupants to move in.

(T.O.P refers to Temporary Occupation Permit, which means the development is completed and fit for people to stay in but is awaiting the C.S.C i.e. Certificate of Statutory Completion from the developer.

Although new launches in Singapore typically refer to that of a high rise condominium, it also refers following type of developments.

  • mixed developments - i.e. a residential condominium with shops or commercial units below,

  • cluster homes – Landed homes i.e. bungalows, semi-ds etc within a condominium development

  • Landed developments – Newly constructed Bungalows, semi-detached houses etc.

Benefits of purchasing properties at a launch

Buyers know that properties under construction would take between 2- 4 years to complete but some still prefer it because of the following reasons.

a) Progressive Payment Scheme

Buyers only need to make monthly payment according to the stage of development i.e. Progressive payment scheme (see section on payments below). Previously you could also take up ‘interest- only’ mortgage loans for private condominiums also known as Deferred payment schemes but this was stopped in 2007. [Currently the deferred payment scheme is only available for Executive Condominiums or HDB ECs ]

b) Lower mortgage due to age / usage of CPF to service the loan.

In a situation of low rental demand (like the situation happening today), this allows the buyer to lock in the current low interest rates and start paying off part of the mortgage (especially popular with those using CPF) sooner rather than later. This is also advantageous with those whose age might reduce/affect the tenure of their home loans, i.e. typically home buyers between 40 – 50 years of age.

c) Property discounts , perks and incentives

In a slow market, a developer who is trying to sell off multiple units are more inclined to give discounts or additional perks like furniture subsidies etc.

d) Resale condo vs new condo

In comparison to a resale condo, part of the perks of purchasing a unit at a new launch is that it comes fully renovated with new fittings and appliances, like the kitchen stove, washer – dryer etc. Investors who want to rent out the new launch condo and do not want to face the hassle of dealing with contractors would prefer this option as well.

e) No pressure to find tenants in a low demand situation

Some buyers prefer to purchase a new launch condo that is still under construction because this means that they do not have to compete with the existing limited supply of tenants. This situation is especially applicable today, and buyers prefer to take advantage of the low prices and low monthly payment without worrying about the tenants yet. 

Supply of New condo - How many properties under construction are there in Singapore?

In Singapore, the number of new private homes available depends on the Government Land Sales by the Urban Renewal Authority of Singapore (URA). These land sales are open to developers for bidding and the government will award the sale to the developer based on the proposal they submitted. The developer will indicate the number of units the condo development will have.

If you’re notice an increase in the number of sales launch recently, this is because of the governments efforts to cool a hot market. Apart from the last round of cooling measures in Singapore in July 2018 where they increased the downpayment amount and the ABSD ( Additional Buyers Stamp Duty) , there is also a move to  the government has also increased the supply of housing units to further cool things down. 

See article by Business Times Singapore :

Article by : Singapore Property Market in 2019

Will there be an over supply of properties in Singapore?

[This paragraph reflects our opinion]

Oversupply is often defined as excessive supply such that it will exceed demand and become redundant.

The question of oversupply of property in Singapore is subjective because even if we chart out the total number of property available and estimate that it will be inhabited by a fixed no of people or families in Singapore, there are some factors which have been left out.

A) Size of the new units.

Its not a secret that new homes being constructed are not as spacious as it used to be. Therefore, is might be unfair to do an apple to apple comparison based on the number of units. As Singaporeans become more affluent and housing size becomes smaller, we may see more and more unmarried adult children choosing to stay on their own rather than with their parents. 

Families may even choose to buy separate but neighbouring units so that they would have even more space.​

B)   Demand (and in a way prices) is now (almost) controlled by the Government

The current property slowdown is a result of the cooling measures (Total Debt Servicing Ratio (TDSR), Additional Buyers Stamp Duty (ABSD) and Loan to Value (LTV)). The slow rental demand is also a reason for the dropping property prices. Both of this can be tweaked by the government and its fair to say that the market might come to be as robust as it was previously. The government did issue a master plan for 6.9 million people in Singapore by 2030 and even hinted at 10 million by 2100 so only time will tell if they will stick to that plan.

Pros and Cons of buying a property investment at various stages

We’ve written a separate article on the pros and cons on of New Launches, Recently TOP or Resale units here.

Payment : How much cash do I need to buy a property in Singapore?

In Singapore, the amount of loan you can get for the properties depend on the number of properties you own. This is called the LTV or loan to valuation and is affected by the current cooling measures.

Progressive Payment

For properties under construction, you are able to make lesser monthly payments, also known as the progressive payment scheme.

After paying the 25% downpayment, you will be allowed to pay the monthly installment progressively, i.e. the amount of loan you have is dependent on the construction stage of the development.

What this means is that you will be paying a smaller loan amount each month until the building is ready for occupation. The last 5% of the loan will only be added to your account, once the building receives the CSC or the certificate of statutory completion.

This is the payment schedule for condos under construction.

Please contact us at this whatsapp link for a personal consultation. 

Progressive Payment New Launch Condo

Can I use my CPF for a second property?

Yes, you are able to use your CPF if you have set aside ½ of the required minimum sum, in both your ordinary and your special accounts. Read more about it on CPF's website here.

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Zubz Kadir is the founder of PropertyRocking.SG She believes that real estate is the biggest purchase one can make and such a decision should not be taken lightly. Knowledge can make or break a purchase. Zubz graduated from National University of Singapore (NUS) Bachelors with a Degree in Informations Communications and Sociology from the and a Masters of Mass Communications from Nanyang Technological University (NTU).