Older 'new' condos on the market

May 11, 2008

property

Older 'new' condos on the market

Leftover units offer immediate occupation, but buyers should take note of some things

By Fiona Chan Property Reporter

With property developers holding back major launches as they wait out the gloomy market sentiment, eager buyers have had to turn to other avenues for a home.

Some with urgent housing needs are looking at older 'brand-new' condominiums - developments that have been completed for a number of years but still have unsold units.

At several of these condos, which have had unsold stock for a few years, all the remaining units have been taken up in recent months.

Far East Organization, for instance, held an open house last month for the leftover units at its four-year-old Water Place in Tanjong Rhu. The 437-unit development is now fully sold.

The company's Tanglin View has about 20 unsold units, going for $1,400 per sq ft (psf).

But do such properties make good buys?

Some of the condos might have been priced above the market at the time they were launched, which is why there are still unsold units, said Mr Ku Swee Yong, the director of business development and marketing at Savills Singapore.

But now that their surrounding projects are mostly sold out, it might be worth paying a premium for immediate occupation or immediate rental income at these completed units, he added.

Another advantage is that buyers get to see the actual unit they are buying - the views, fittings, defects and so on, said consultants.

'What you see is what you get, so there is less scope for misunderstandings,' said Mr Colin Tan, the head of research and consultancy at Chesterton International.

What to look out for

Apart from the standard considerations - location, price and design - completed condos come with a few more checkboxes for you to tick off before you sign that contract.

Buyers should ask what the developers have done with the unsold condos since they were completed.

In some cases, the developers have left the units empty, which is what GuocoLand has done with Le Crescendo in Paya Lebar, where would-be buyers can see the actual units that are on sale.

Other developers rent out the unsold homes for interim income, but are willing to sell them with the tenancies.

At The Equatorial, developer City Developments is selling one last two-bedroom unit, tenanted, for $2.1 million.

If the unit has been rented out for five years or more, buyers should check the electrical wiring and plumbing to see whether they need to be changed, said Mr Tan.

'The danger is that, on the surface, everything looks new and you think the same goes for services that cannot be seen,' he noted, adding that 'false ceilings can hide a lot of internal problems'.

While new condos come with a 12-month liability period for defects, this might not apply to condos that have been completed for some time, especially if they have been rented out in the meantime.

Consultants recommend that buyers check with the developers to see if they are willing to make good any defects found within a reasonable period.

For 99-year leasehold condos, it is also important to find out when the clock started ticking on the lease. 'The buyer needs to check on the remaining lease period as these condos may be marketed as being new,' said Mr Tan.

Orchard Scotts in Scotts Road, for instance, was completed last year, but its 99-year leasehold tenure started ticking in 2001.

Similarly, River Place in Havelock Road was completed in 2000 but the 99-year lease took effect in 1995.

Can you get a discount?

Some developers, such as Far East Organization, occasionally hold promotions for their completed projects in order to offload the units.

In the past few months, it has offered discounts on completed condos such as Icon in Tanjong Pagar, The Lakeshore in Jurong West and Hillview Regency in Bukit Batok.

Last week, it is understood to have offered stamp duty reimbursements for Hillview Regency units.

DTZ Debenham Tie Leung's executive director, Ms Margaret Thean, said whether you can get a discount is 'subject to location'.

'If a project is situated in a prime location, it is unlikely you will get a bargain. But if it's a mass market project and on the outskirts, you're likely to have more room to negotiate,' she said.