Ki Residences is developed 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 much more.
Do you know the positives to buying a property 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 most of the stress away from getting a property back in Singapore to purchase. Because the apartment is brand new there is not any need to physically inspect the web page and usually the area is a good location close to any or all amenities.
What exactly is ‘off the Plan’? Off the plan occurs when a builder/developer is constructing a set of units/apartments and definately will turn to pre-sell some or all the apartments before construction has even began. This kind of purchase is call purchasing off plan since the buyer is basing the decision to purchase based on the plans and drawings.
The typical transaction is actually a deposit of 5-10% will likely be paid during the time of signing the contract. No other payments are required whatsoever until construction is finished upon that the balance in the funds are required to complete the acquisition. The amount of time from signing from the contract to completion can be any amount of time really but generally no more than 2 years. Other advantages 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 provide the buyer with comfort around prices,
2) In a rising property market it is really not uncommon for the price of the apartment to increase resulting in an excellent return on your investment. If the deposit the purchaser put down was 10% and the apartment increased by 10% within the 2 year construction period – the customer has seen a 100% return on their own money since there are hardly any other costs involved like interest payments etc inside the 2 year construction phase. It is not uncommon for a buyer to on-sell the apartment before completion turning a fast profit,
3) Taxation benefits who go with purchasing a whole new property. These are some terrific benefits and in a rising market purchasing Off the plan can be a smart investment.
Do you know the negatives to purchasing Ki Residences Floor Plan Singapore Off the plan? The key risk in purchasing Off the plan is obtaining finance for this purchase. No lender will issue an unconditional finance approval to have an indefinite period of time. Yes, some lenders will approve finance for Off the plan purchases nonetheless they are always subjected to final valuation and verification from the applicants financial situation.
The utmost time frame a lender will hold open finance approval is six months. Which means that it is far from easy to arrange finance before signing an agreement upon an Off the plan purchase just like any approval would have long expired by the time settlement arrives. The chance here would be that the bank may decline the finance when settlement arrives for one of many following reasons:
1) Valuations have fallen therefore the property is worth under the first purchase price,
2) Credit policy is different leading to the property or purchaser no longer meeting bank lending criteria,
3) Interest rates or even the Singaporean dollar has risen leading to the borrower no longer being able to pay the repayments.
Being unable to finance the balance of the purchase price on settlement can resulted in borrower forfeiting their deposit AND potentially being sued for damages if the developer sell the home for under the agreed purchase price.
Examples of the above risks materialising during 2010 during the GFC: During the global financial crisis banks around Australia tightened their credit lending policy. There have been many examples where applicants had purchased Off the plan with settlement imminent but no lender willing to finance the balance of the purchase price. Here are two examples:
1) Singaporean citizen located in Indonesia purchased an Off the plan Ki Residences Sunset Way in 2008. Completion was due in September 2009. The apartment was actually a studio apartment with an internal space of 30sqm. Lending policy in 2008 before the GFC permitted lending on this kind of unit to 80% LVR so just a 20% deposit plus costs was required. However, following the GFC financial institutions begun to tighten up their lending policy on these small units with lots of lenders refusing to lend in any way while others wanted a 50% deposit. This purchaser did not have enough savings to pay a 50% deposit so had to forfeit his deposit.
2) Foreign citizen located in Australia had invest in a property in Redcliffe Off the plan in 2009. Settlement due April 2011. Purchase price was $408,000. Bank conducted a valuation and also the valuation arrived in at $355,000, some $53,000 underneath the purchase price. Lender would only lend 80% from the valuation being 80% of $355,000 requiring the purchaser to set in a bigger deposit than he had otherwise budgeted for.
Do I Need To buy an Off the Plan Property? The writer recommends that Singaporean citizens living overseas considering purchasing an Off the plan apartment should only do so should they be in a strong financial position. Ideally lisldj could have a minimum of a 20% deposit plus costs. Before agreeing to purchase an Off the plan unit one should contact a specialised mortgage broker to ensure that 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 a lot of many investors doing very well out of the acquisition of these properties. You will find however downsides and risks to purchasing Off the plan which have to be considered before investing in the acquisition.