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 track records include Ki Residences Singapore, Royal Square At Novena, Sophia Hills, Arc At Tampines and many more.
Exactly what are the positives to purchasing a house Off the plan? Off the plan properties are marketed heavily to Singaporean expats and interstate buyers. The reason why many expats will purchase Off the plan is it takes many of the stress away from getting a property back in Singapore to invest in. As the apartment is completely new there is absolutely no must physically inspect the web page and generally the location will certainly be a good location close for all amenities.
What is ‘off the Plan’? Off the plan is when a builder/developer is constructing a set of units/apartments and will turn to pre-sell some or all of the apartments before construction has even began. This type 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 actually a deposit of 5-10% will likely be paid during the time of signing the agreement. Not one other payments are required whatsoever until construction is done upon in which the balance from the funds are required to complete the investment. The length of time from signing from the contract to completion can be any amount of time really but generally no more than 24 months. Other benefits of purchasing Off the plan include:
1) Leaseback: Some developers will offer you a rental guarantee for a year or so post completion to supply the buyer with comfort around prices,
2) In a rising property market it is not uncommon for the value of the apartment to increase leading to an excellent return on your investment. When the deposit the purchaser put down was 10% and also the apartment increased by 10% over the 2 year construction period – the purchaser has seen a 100% return on their money as there are hardly any other costs involved like interest payments etc within the 2 year construction phase. It is far from uncommon for a buyer to on-sell the apartment prior to completion turning a quick profit,
3) Taxation benefits who go with purchasing a brand new property. These are generally some terrific benefits and in a rising market purchasing Off the plan can be well worth the cost.
Exactly what are the negatives to buying Ki Residences Floor Plan Singapore Off the plan? The main risk in purchasing Off the plan is obtaining finance for this particular purchase. No lender will issue an unconditional finance approval for an indefinite period of time. Yes, some lenders will approve finance for Off the plan purchases but they will always be susceptible to final valuation and verification of the applicants finances.
The highest time period a lender will hold open finance approval is 6 months. Which means that it is not easy to arrange finance prior to signing an agreement upon an Off the plan purchase just like any approval could have long expired when settlement arrives. The chance here is the fact that bank may decline the finance when settlement arrives for one of the following reasons:
1) Valuations have fallen and so the property is worth less than the initial purchase price,
2) Credit policy has evolved leading to the home or purchaser will no longer meeting bank lending criteria,
3) Interest rates or perhaps the Singaporean dollar has risen resulting in the borrower no longer being able to pay for the repayments.
The inability to finance the balance in 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 less than the agreed purchase price.
Examples of the aforementioned risks materialising during 2010 through the GFC: Throughout the global financial disaster 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 living 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 having an internal space of 30sqm. Lending policy in 2008 ahead of the GFC permitted lending on such a unit to 80% LVR so just a 20% deposit plus costs was required. However, following the GFC banking institutions begun to tighten up their lending policy on these small units with a lot of lenders refusing to lend at all and some wanted a 50% deposit. This purchaser did not have enough savings to pay a 50% deposit so were required to forfeit his deposit.
2) Foreign citizen residing in Australia had purchase a property in Redcliffe Off the plan during 2009. Settlement due April 2011. Purchase price was $408,000. Bank conducted a valuation as well as the valuation arrived in at $355,000, some $53,000 below the purchase price. Lender would only lend 80% from the valuation being 80% of $355,000 requiring the purchaser to place in a bigger deposit than he had otherwise budgeted for.
Must I buy an Off the Plan Property? The author recommends that Singaporean citizens living overseas considering purchasing an Off the plan apartment should only do so if they are in a strong financial position. Ideally lisldj could have no less than a 20% deposit plus costs. Before agreeing to buy an Off the plan unit one should speak to a specialised mortgage broker to verify they currently meet mortgage loan lending policy and really should also consult their solicitor/conveyancer before fully committing.
Off the plan purchasers can be great investments with many many investors doing very well out from the purchase of these properties. You can find however downsides and risks to purchasing Off the plan which need to be considered before investing in the investment.