My husband and I finally decided this year that the time is right to get serious and start looking for a house of our own. Make no mistake, the topic of buying a house is a serious one. If you think about it, one of the biggest, if not the biggest financial purchases a person could make in their lifetime would be getting their forever home.
So now here we are, together we have decided – let’s get it! But… what exactly are we getting?
See, the reality is that house hunting can be a long, stressful and complicated journey. There are many things to consider and factor in. But one of the most important question you need to decide EARLY on so that you can narrow your options and not waste time is – do we buy a subsale or a new house?
You’ll realize that I’m using the term house here. This post is going to centre more on landed property, rather than an apartment or condominium. I do feel though that some of these tips are relevant for any type of home purchase.
From our experience and with some research, here are some of the key things to keep in mind when deciding between purchasing either a subsale or new property.
Budget and cash-on-hand
I can’t speak for all territories, but in Malaysia at least, your budget and how much cash you have on hand play a big part in deciding between the two.
To put things simply, to buy a subsale property in Malaysia you will need to put a minimum of 10% downpayment of the property price in cash. This is assuming you qualify for a bank loan for the remaining 90% of the amount. On top of that, you must also consider the mortgage insurance, valuation fee, stamp duty, legal fees and other charges which can be a hefty sum! All in all, the total upfront cash you would require can easily be between 15-20% of the subsale property price.
For new property development on the other hand, things are somewhat simpler. In principle, you will still need to pay the 10% downpayment and associated transaction costs. However, most developers these days offer “rebate” or choose to absorb certain costs to make the purchase more affordable, to the extent that you may not be required to fork out the downpayment at all! If you are short of cash but are keen to own a home, this is certainly an attractive proposition.
Unfortunately that is not the only cash involved, as there is still the matter of renovation work. There is no perfect home in the world; even a brand new house normally does not come with a near-complete kitchen or would require minor tweaks to turn it into your own home.
This is where a new property again has the edge over a subsale house, as the latter tend to be a mix combination of old or to someone else’s taste, and require massive upgrades or changes which is translated into more upfront cost.
Location, location, location
Once again, considering the context of Malaysia and Klang Valley, if your target areas are urban spots like KL or Damansara, I have news for you – land is scarce and you can hardly find new landed development in these established locations. Unless you are targeting apartments or condominiums, your best bet if a landed property tops your list is for a subsale unit.
Unfortunately, not everyone has the cash upfront and can afford a subsale house in established locations (see my previous point). If you belong to this segment, you have little choice but to venture a bit further out to the sprawling suburbs – hence the growing popularity of newer townships in places like Shah Alam, Rawang, Semenyih and Nilai to name a few.
Now, there is nothing wrong with these new areas especially if they fit into your budget and tick all criteria. Ideally, you should factor in other aspects like the distance to/from your workplace, support system and your lifestyle. Which brings us to the next point…
Lifestyle and community
A plus point of a subsale property is often what you see is what you get. This applies not only to the state of the house, but more important the amenities and surrounding community. You may have grown up in a particular location and grown to love the convenience of the road access, café selections or diversity of the neighbours. These are all pulling factors to continue living in the area.
On the other hand, new landed property at least in Klang Valley, are usually part of emerging townships which will take time to grow in character. If you are among the early movers into these places, chances are it will be a few years before you can welcome your street neighbours, enroll your kids in the local school or find entertainment within the vicinity of your area.
The good news is many property developers nowadays play their part to accelerate the growth of these new townships. While they cannot bring KLCC and the urban amenities to you, what they can do is offer well-kept public places with greeneries, premium facilities and good security to enhance your quality of living and promote a sense of community.
At the end of the day, it’s all down to your personal preferences and lifestyle. There is no perfect place in the world when it comes to finding a home, but throughout the journey you will learn a little more about yourself and define your own perfection.
While we are on the subject, some other aspects I encourage you to consider are the following:
- Support system – Are you someone who likes to be close to your family and friends? Can they regularly and easily make the trip to visit you in your new place should they need to?
- Distance from work – Does your work require you to go into the office post-pandemic. How long would it take you to get to work? How is the peak hour traffic?
- Accessibility – How is the access to major highways? What are the public transport options? The last thing you want in the morning on the way to work is to be caught in a bottleneck with no access to public transport.
- Amenities – Is there easy access to basic necessities? For instance, schools, hospitals, groceries, etc.
- Leisure – How do you relax? What do you do for entertainment? Where do you hangout with your friends?
Applying the above
Now that I have outlined the above factors, allow me to share our real life situation and the considerations in finding our home.
In my case, I’m someone who does not like taking huge risks and venturing into the unknowns. In our search for a new home, we surveyed the locations with established communities for a sense of familiarity and comfort. Because of this, I was not attracted to new townships or areas. Call me impatient, but I am particularly not fond of the rows of empty houses and bare lands that I see in these places. I also recognized that I like to be close to family and friends for the support, so from early on our search revolves around areas nearby their locations.
Because both my husband and I work in corporate, our offices are primarily based in the city centre. We may be WFH for now, but it’s always good to be situated not too far from your office for post-Covid work arrangement. On a personal level, I’ve been living in KL for almost a decade now and cannot imagine relocating out of town. To me, nothing beats the joy I feel when driving around and exploring the city at my own backyard. Besides, I like having options within easy reach, be it for basic necessities, food/restaurants, shopping malls or even parks/places to jog. Similarly, my husband likes to go for groceries from a pasar/local farmer’s market which is often available in established communities.
With all the above in mind, I was able to narrow down my preferred location and our choice becomes clear – we are going for a subsale house! If your conscience is less clear, that’s okay because the search in itself is after all a journey and no one should press you to make a hasty decision.
The ideal house
When you close your eyes and imagine your forever home, what do you see? Is it a house with a side garden? Or perhaps a high rise with a large balcony overlooking the sunrise? Do you prefer a brand new place with modern look or old classic one with character?
To a certain extent, we are in control to make any house a dream home. That being said, we must also recognize that depending on our budget, chosen location and other factors, we must be willing to prioritize and make a trade-off. For example, if budget is limited and location is more important than a garden, then one must be ready to sacrifice the latter and re-align the search options.
For my husband and I, we are excited about the prospect of doing renovation and upgrades on an old subsale house as that gives us the opportunity to mould it to our taste and turn it into an ideal home. While this may not be everyone’s preference, at some point you will go through the experience even in a new home so it is best to save money and learn.
Conclusion
All in all, buying a property especially one that you intend to make into a forever home is a landmark decision for any individual and depends significantly on the preferences as well as existing financial position. I highly encourage you to do a lot of research, talk to people and understand your own situation as you go about the adventure. If you’ve made it this far, I hope you’ve gained a little from my experience. I wish you all the best in your journey to finding a home!
Other useful resources
- Should You Choose A Subsale Or Brand New Property? by PropertyGuru
- New Property or Subsale House? by NuProp
- Subsale or new launch property – Which is better? by iProperty
- Pros and cons: Buying Sub-sale vs Development Projects
- A sub-sale or brand new property: Which should you choose?
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