Invest in Singapore Property: Building under construction payment schedule

Payment Schedule of BUC properties

The below is a typical payment schedule for the Singapore Property Buyer. (This is not indicative of all cases)

1% of the purchase price
Option to purchase.

4% of the purchase price – 14 days after Option to purchase.
Exercise option

Payment of Stamp Duty (~3%)
28 days from option to purchase

15% of the purchase price
12 weeks after exercising option to purchase.

If the property that you bought is an uncompleted Condominium, then you will have to pay progressively as the building achieves various milestones.

10% of purchase price – Timing depends on speed of construction
Notice of foundation work completion.

10% of purchase price
Notice that reinforced Concrete framework of the unit has been completed.

5% of the Purchase Price
Notice that the brick walls of the unit have been completed

5% of the purchase price
Notice that the ceiling of the Unit has been completed.

5% of the purchase price
Notice that the door and window frames are installed and the wiring and plastering have been completed.

5% of the purchase price
Notice that the car park, roads and drains serving the housing project have
been completed.

25% of the purchase price
Payable 14 days after notice of vacant possession and the Temporary Occupation Permit of Certificate of Statutory Completion n respect of the unit (or a certified copy thereof)

A certificate by the qualified person engaged by the vendor that the building and all roads and drainage and sewerage works serving the Housing project have been completed and that the water and electricity supplies, and gas supplies (if any) have been connected to the unit.

15% of the purchase price
On Completion date. Of which 2% is payable to the vendor (i.e. the developer) and 13% is payable to the Singapore Academy of law as stakeholder.
Whether you can afford the condominium or not, buying a condominium under construction can be a good way to gradually put up the cash for buying a property.

Smoothing out Funding of a Private property
In the case where you have the earning capacity, but you will need some time to recover after the initial 20% downpayment. The Singapore home loan installment will be lesser at the earlier stages, this enables you to save up and build up your cash reserves as there may be many other costs associated with owning a private property.

If you are Singapore property investor, if your view is that the property market will pick up in a few years, buying a property under construction is similar to buying shares on “Contra”, except that this “contra” gives you several years of holding “option”.

Many speculators like this feature which gives them the chance to finance a property cheaply and flip the property for a profit.

Genuine Home Buyers can get burnt buying a Property Under Construction

Due to the ease of financing, holding on to a Building under construction during the early stages can be rather cheap. This means that speculators can easily get in and bid up the prices for genuine buyers, creating a squeeze on the prices.

This means that such buyers will tend to end up paying a higher price due to cheap singapore home loans.

How to profit from Property Under Construction?

Due to the presence of speculators, when the pressure mounts and when they cannot turn a profit flipping the property and cannot lease the property out and starts to default. You can then stand on the side lines to punish these greedy speculators and pick up the properties cheaply.

Invest in Singapore Property: Sibor and Inflation

Invest in Singapore Property: Sibor and inflation

Property Buyer Home Loan

Many people say that, what happens if the interest rates go up?
What will happen to my home loan installment? When interest rates go up, your loan repayment becomes more expensive.

Does Rising Sibor really hurt you?

The common answer is yes, it hurts you due to more expensive loan. However many people do NOT get hurt by Sibor rising.

The reason for this is because during times when interest rates are high, Inflation(CPI) is also high. If you have a
house, a job, shares and other assets, those values tend to rise as well. It is mostly a zero-sum game.

In some cases, those asset values rise faster than CPI rate or it could rise even more than the cost of your housing mortgage.

BANKS CANNOT LEND YOU AT LESS THAN THE CPI

The point is, banks cannot lend you money at a rate that is less than the CPI, otherwise their money will lose its value as those same money will only be able to Afford less goods and services.

WHEN DO BANKS REALLY MAKE MONEY?

Some say that in 2006 and 2007 banks make a lot of money. While they probably did make money, charging you 5% for your home loans, but CPI was at 6.5%, that means that their money is depreciating. In fact they are losing money
doing that. This is a very rare event in History.

SO DOES INFLATION AFFECT INTEREST RATES?


Absolutely YES!!! Inflation is the base line. If Inflation rises, everything rises along with it. Due to Inflation rises, Sibor or SOR will have to rise along side. If SIBOR or SOR rises, there is NO DOUBT that the bank’s floating rates will also have
to rise.

How fast they raise rates will depend on how benevolent the banks are. So what do you think the banks do?

Are banks benevolent? I think you know the answer.

Contact Property Buyer
www.PropertyBUYER.com.sg

We are a Research-focused Singapore Mortgage Consultant which helps you compare Home loans either for new loans or refinancing, we balance risks versus rewards for each loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
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