A new launch from a developer and a subsale unit from an existing owner can carry similar prices, yet they demand very different amounts of cash, waiting time and risk. Many buyers choose on price alone.
Should you buy new from a developer, or a subsale unit?
“I can immediately start renting out.”
It depends on your cash and experience. Investors with capital should favour a subsale, where you can see the real condition and rent from day one. First-time buyers short on cash are better served by a new launch.
Why
A new launch needs far less cash upfront
Developer packages and rebates can let you in with 1 to 2% in cash: about RM8,000 on an RM800,000 unit. Sean estimates a RM600,000 subsale needs around RM80,000, covering a 10% deposit plus your own lawyer, valuer, stamp duty and transfer costs.
Developers handle the paperwork
A developer lines up the bankers, lawyers, valuers and approvals for you. For a first-time buyer unfamiliar with the process, that convenience matters; a subsale means coordinating it all yourself.
With a subsale, what you see is what you get
You can see the actual condition, the neighbours, the schools and the train station that already exists. A new launch is sold on plans, and facilities marked "proposed" may arrive late or not at all.
A subsale earns rent straight away
New launches take about two years to complete for landed homes and three to five for large high-rises. A big project can also hand over thousands of units at once, all competing for the same tenants.
What to do
- Start from your intent and your cash: limited cash and a first purchase point to a new launch; capital and experience point to a subsale.
- With a new launch, separate what is approved from what is only "proposed" in the brochure.
- With a subsale, check current rents and condition, and budget about 10% plus fees in cash.
- If you need somewhere to live soon, choose a completed unit; a new launch may take years.
- In a large new project, consider how many units will hit the rental market at handover.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
New property VS Sub Sale
Sources & Verification Data
Summarised from Sean's English captions for this August 2017 episode. The quoted answer is verbatim; everything else is paraphrased. Parts of the older automatic captions are unclear, so only clearly stated points are included.
