When it comes to choosing a condominium, one of the choices you’ll run into will be Buildings Under Construction. In short, these are condominiums that are still in the construction phase and won’t be ready for month/years. But developers will still offer these units for sale, giving you two options:
- You can wholly purchase a condominium unit while it’s still under construction.
- You can secure through payment an “option” to buy.
Developers will offer units for sale at various points in the condominium’s development – from the land purchase phase to near completion. But before you purchase a BUC property, consider these pros and cons:
|Pros of BUC Property
||Cons of BUC Property
- Larger Range of Discounts: Many developers offer per-square-foot discounts or will absorb the stamp duty, giving you 1% – 3% savings on your purchase.
- Priority Purchasing: If you buy early, you can choose the unit you want to purchase. This make a huge difference in the future resale value as a unit with a view or closer to amenities will fetch a higher value.
- Defects-Free Period: If your unit has any defects such as cracked tiles, creaking doors, bad windows, etc., the developer will fix the problems. Just be aware of exclusions.
- Abandonment: If the property developer launches without securing enough capital because of bad sales, there’s the risk the project could be abandoned. And it may be a long time before you get your money back.
- Delay: If there are delays in construction, your plans for moving in or renting out the unit will be dashed until it resumes. That means you’ll either have to move in with family for the time being or spend more money for temp lodging.
- Speculation: The value of under-construction property is purely speculative, meaning that you’re not guaranteed to reach the rental yields/appraisal values of similar launches. Also, showflats are never completely accurate, as what you “see” isn’t always what you get.