Also known as the “sell and build” concept, developers start selling before construction work begins. For property buyers, they would usually cross their fingers and hope for the best when they buy property off the plan from developers. If they are lucky, they will get a reasonably decent if not perfect unit plus they may see a significant appreciation in value once the project is complete.

Under construction properties, or some would call it properties off the primary market, are popular among house buyers because of the discounts and freebies offered by developers. Here are a few pros and cons you need to weigh before you decide to buy a property off the plan.

1. Pros
a. Value Appreciation
• Buying it first-hand means you’re buying it cheaper, and when the unit is completed, it will naturally cost more.

b. Easy Information
• Projects are often showcased at fairs and property launches. If not, you can walk in to their showrooms anytime.

c. Brand New
• Everything in the unit is brand new as you’re the first owner of the property. Knowing this often gives a psychological peace of mind to owners.

d. Discounts
• There are heaps of discounts for brand new property, as it is in the interest of the developer to sell off all the units as quickly as possible.

e. Warranty
• Brand new properties from the developer typically come with a standard 18-month defect liability period. It entitles the owner to get the developer to rectify any defects in the unit, like bathroom leakage, cracks in the wall, or door hinges that are not properly installed.

2. Cons
a. Taking on Risks
• With cheaper purchase price comes higher risk. As you are buying the property based on plans and models, the quality is not guaranteed.
• There are cases of developers abandoning the project due to lack of financing, too. This is why it’s important to choose reputable developers when buying off the plan.

b. Locked Financials
• When you buy an under construction property, you will have to wait for three to four years until it is completed. During this time, your credit with the bank is locked away for the total loan sum and it will be difficult to buy another property.

3. Other Considerations
a. What you see may not be what you get – Keep in mind that not all the fittings, furniture and electronics come with your purchase. Always clarify what items are included and what are not.

b. Weigh out the costs involved – If you are purchasing a property directly from the developer, you will need to consider the following cost:
• Initial Deposit: minimum 10% of property value
• Loan application processing fee
• Mortgage Reducing Term Assurance (MRTA) and fire insurance (if you take up a housing loan)
• Stamp Duties
• Legal fees and costs
• Utilities deposit (Electricity and water)


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