Ki Residences is designed by Link: Hoi Hup Realty and Sunway Group. The two developers have been doing partnership projects for 11 years in Singapore and is well known in the industry. Their records include Ki Residences Singapore, Royal Square At Novena, Sophia Hills, Arc At Tampines and many more.
Exactly what are the positives to buying a house Off the plan? Off the plan properties are marketed heavily to Singaporean expats and interstate buyers. The main reason why many expats will purchase Off the plan is it takes a lot of the stress away from getting a property back in Singapore to invest in. Since the apartment is new there is no need to physically inspect the website and customarily the place is a good location close to any or all amenities.
Precisely what is ‘off the Plan’? Off the plan happens when a builder/developer is constructing a set of units/apartments and will look to pre-sell some or each of the apartments before construction has even began. This sort of purchase is call purchasing off plan since the buyer is basing the choice to purchase based on the plans and drawings.
The typical transaction is really a deposit of 5-10% will likely be paid at the time of signing the contract. Hardly any other payments are needed whatsoever until construction is complete upon in which the balance from the funds are required to complete the investment. The length of time from signing of the contract to completion can be any period of time really but generally will no longer than 2 years. Other benefits of purchasing Off the plan include:
1) Leaseback: Some developers will offer you a rental guarantee to get a year or so post completion to offer the customer with comfort around prices,
2) In a rising property market it is really not uncommon for the value of the apartment to improve causing an outstanding return on investment. In the event the deposit the customer put down was 10% and also the apartment increased by 10% on the 2 year construction period – the customer has seen a 100% return on the money because there are no other costs involved like interest payments etc within the 2 year construction phase. It is really not uncommon for a buyer to on-sell the apartment just before completion turning a fast profit,
3) Taxation benefits who go with purchasing a whole new property. They are some great benefits and in a rising market purchasing Off the plan can be well worth the cost.
Do you know the negatives to buying Ki Residences Floor Plan Singapore Off the plan? The main risk in purchasing Off the plan is obtaining finance with this purchase. No lender will issue an unconditional finance approval to have an indefinite time frame. Yes, some lenders will approve finance for Off the plan purchases but they are always subjected to final valuation and verification from the applicants finances.
The utmost time period a lender will hold open finance approval is 6 months. Which means that it is not possible to arrange finance before signing a contract with an Off the plan purchase just like any approval might have long expired once settlement arrives. The danger here would be that the bank may decline the finance when settlement arrives for one of the following reasons:
1) Valuations have fallen and so the property will be worth less than the initial purchase price,
2) Credit policy has changed leading to the property or purchaser no more meeting bank lending criteria,
3) Interest rates or the Singaporean dollar has risen resulting in the borrower will no longer being able to pay for the repayments.
Being unable to finance the balance in the purchase price on settlement can resulted in borrower forfeiting their deposit AND potentially being sued for damages should the developer sell the property for less than the agreed purchase price.
Examples of the above risks materialising in 2010 throughout the GFC: Through the global economic crisis banks around Australia tightened their credit lending policy. There was many examples where applicants had purchased Off the plan with settlement imminent but no lender ready to finance the balance in the purchase price. Listed here are two examples:
1) Singaporean citizen living in Indonesia purchased an Off the plan Ki Residences Sunset Way in 2008. Completion was due in September 2009. The apartment had been a studio apartment with the internal space of 30sqm. Lending policy in 2008 prior to the GFC permitted lending on this type of unit to 80% LVR so merely a 20% deposit plus costs was required. However, right after the GFC banking institutions started to tighten up their lending policy on these small units with a lot of lenders refusing to lend at all while some wanted a 50% deposit. This purchaser was without enough savings to cover a 50% deposit so were required to forfeit his deposit.
2) Foreign citizen living in Australia had buy a property in Redcliffe Off the plan during 2009. Settlement due April 2011. Purchase price was $408,000. Bank conducted a valuation and the valuation arrived in at $355,000, some $53,000 underneath the purchase price. Lender would only lend 80% of the valuation being 80% of $355,000 requiring the purchaser to set in a bigger deposit than he had otherwise budgeted for.
Must I buy an Off the Plan Property? The writer recommends that Singaporean citizens living overseas considering purchasing an Off the plan apartment should only do this should they be in a strong financial position. Ideally lisldj might have a minimum of a 20% deposit plus costs. Before agreeing to get an Off the plan unit you ought to speak to a specialised mortgage broker to verify which they currently meet mortgage loan lending policy and must also consult their solicitor/conveyancer before fully committing.
Off the plan purchasers can be great investments with lots of many investors doing very well out of the acquisition of these properties. You can find however downsides and risks to purchasing Off the plan which must be considered before committing to the investment.