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.