Steps to Buying a New Launch Condo in Singapore
Introduction
Singapore’s real estate market is known for its dynamism and resilience, attracting both local and foreign investors. One of the most sought-after property types is a new launch condominium. Buying a new launch condo can be an excellent investment, offering early-bird discounts, modern amenities, and capital appreciation. However, the process involves several key steps that buyers should understand. This guide outlines the essential steps to purchasing a new launch condo in Singapore.
Step 1: Assess Your Budget and Financial Readiness
Before embarking on your property journey, assess your financial situation. Consider the following:
Total Debt Servicing Ratio (TDSR): The Monetary Authority of Singapore (MAS) mandates that your total monthly debt repayments should not exceed 55% of your gross monthly income.
Loan-to-Value (LTV) Ratio: First-time buyers can typically secure up to 75% of the property price as a loan from banks, while those with existing loans may be limited to 45% or lower.
Additional Costs: Apart from the property price, you need to account for stamp duties, legal fees, and other administrative costs.
Step 2: Understand the Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD)
When purchasing a new launch condo, buyers need to factor in the applicable stamp duties:
Buyer’s Stamp Duty (BSD):
First $180,000: 1%
Next $180,000: 2%
Next $640,000: 3%
Next $500,000: 4%
Remaining amount: 5%
Additional Buyer’s Stamp Duty (ABSD):
Singapore Citizens (first property): 0%
Singapore Citizens (second property): 20%
Singapore PRs (first property): 5%
Foreigners: 60%
Understanding these costs will help you avoid any financial surprises.
Step 3: Research Available New Launch Projects
Once you have a clear budget, explore available new launch condos. Some factors to consider include:
Location: Proximity to MRT stations, schools, shopping malls, and business hubs.
Developer Reputation: Choose a reputable developer with a strong track record.
Potential for Capital Appreciation: Consider future developments in the area, such as new MRT lines or business parks.
Facilities and Unit Layouts: Assess the condo’s amenities, unit sizes, and efficiency of layouts.
Step 4: Attend Previews and Showflats
Developers usually conduct previews and open showflats for prospective buyers before the official launch. Here’s what you should do during these previews:
Check the Unit Layouts: Examine the different unit types to determine which best suits your needs.
Ask About Early Bird Discounts: Developers often provide early bird discounts for first-day buyers.
Clarify Payment Schemes: Ask about available payment plans such as the Deferred Payment Scheme (DPS) or the Normal Progressive Payment Scheme.
Step 5: Secure an Option to Purchase (OTP)
Once you have decided on a unit, you will need to secure an Option to Purchase (OTP) by paying a booking fee (usually 5% of the purchase price). The OTP grants you exclusive rights to purchase the property within a specified period (typically 14-21 days).
Step 6: Arrange for Financing
After securing the OTP, arrange for financing:
Obtain an In-Principle Approval (IPA): Banks can provide an IPA, which gives an estimate of the loan amount you can secure.
Choose a Loan Package: Compare fixed and floating interest rates among different banks.
Finalize Loan Application: Submit necessary documents such as income statements and CPF contribution records.
Step 7: Exercise the OTP and Pay the Down Payment
To proceed with the purchase, you must exercise the OTP within the stipulated period by signing the Sale & Purchase Agreement (S&P). You will also need to:
Pay the remaining 15% of the down payment (bringing your total down payment to 20% if taking a loan).
Pay the Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD), if applicable, within 14 days of signing the agreement.
Step 8: Follow the Progressive Payment Schedule
For new launch condos, payments are made progressively as the development is constructed. The typical progressive payment schedule is as follows:
Upon signing the S&P: 20%
Completion of foundation: 10%
Completion of reinforced concrete framework: 10%
Completion of brick walls: 5%
Completion of ceiling: 5%
Completion of doors and windows: 5%
Completion of plumbing and electrical works: 5%
Issuance of Temporary Occupation Permit (TOP): 25%
Upon completion (CSC): 15%
Step 9: Collect the Keys Upon Completion
Once the condominium receives its Temporary Occupation Permit (TOP), buyers can collect the keys to their units. Before moving in or renting it out, inspect your unit for any defects and ensure they are rectified by the developer.
Conclusion
Buying a new launch condo in Singapore is a structured process that involves careful planning, financial assessment, and due diligence. By understanding the steps involved, from budget assessment to key collection, you can make an informed and smooth property purchase. Whether you are buying for investment or personal use, a well-researched decision can yield long-term benefits in Singapore’s thriving real estate market.