Why I won’t buy at new launch

Not for me!

1) What your deposit means

I know many people have strong ‘belief’ that the price of their unit will increase significantly by TOP.

Honestly, unless you’re quite sure that you’re buying near the bottom; otherwise, who can guarantee what the market will look like a few years from now?

If you’re buying a unit that’s going to be delivered in the future, it implies that you agree with the following:

• You’re willingly to place a 20 to 40 percent deposit to help fund the developer to build the project. You agree that there’s not a single cent of interest/dividend/profit paid to you. You’re also not entitled to enjoy any product/service until TOP.

• You’ll buy the unit and pay the same price no matter what, even if there’s a financial crisis or crash of the property market in between.

After the financial crisis in early 2009, some new launch in Kuala Lumpur only asked for 1 percent payment (and nothing else) until TOP. That sounds very attractive!

But on second thoughts, if the market price drops just 2 percent, the buyer might as well forfeit that 1 percent deposit rather than holding onto a negative asset.

2) What happen when you sell

Another reason why I won’t buy at new launch is that: you’re buying at the same price as everyone else.

Of course, you can get extra 1 or 2 percent discount from various promotions. But do you know that I can easily bargain at 15 to 20 percent off the valuation when times are bad?

And next time when I decide to sell, I have a better margin to play with.

Supposedly your neighbors all buy at $1,000 psf during the launch and now all of you are selling at the market price of $1,200 psf. But I am willing to close the deal at $1,100 psf because, with my purchase price at $800 psf, the profit is good enough to me.

3) What you’ll expect at TOP

Do you have experience collecting the key of your unit from the developer after TOP? Do you find it (the size, outlook, finishing, etc.) somewhat different from what you remember seeing in the showflat or the sales brochure?

Can you make a list of developments where the actual site/unit looks better than what was originally pictured/described in the sales brochure?

It’s tricky when you buy uncompleted projects. The showflats look nice. So do the drawings in the brochures. But remember they are ‘artists’ impressions only’ and showflats are ‘for display only’.

Afterall, what you are buying is only based on your trust of what the developers or the agents said at the time of purchase!