Should You Invest In A Subsale Or A New Property?
As a first-time buyer, upgrader, or savvy property investor, one of the most crucial decisions you’ll face before making any investment is choosing what type of property to invest in.
Once you know what kind of home you want and where it should be, the next decision will either make or break your investment decision.
“Should I buy a subsale or brand new property?”
Understanding the difference between these two types of properties is the key to maximising returns and minimising risks.
So, what’s the difference between subsale and brand new property?
Subsale: You’ll purchase these properties from an existing owner. A family may be moving out of their home and putting it up for sale; hence, this would be classified as a subsale property.
New launch: As the name suggests, these are new to the market (sometimes under construction or recently completed) or have not been owned/stayed in by anyone before, as they come fresh off the developer’s construction site.
Now that you know the (basic) difference between a subsale and brand-new property, here’s an important point to consider:
While each option presents unique opportunities and challenges, particularly from an investment perspective, it is vital for you to ensure your financial position, including your credit score, is strong.
This will improve your chances of securing favourable financing and enhance your investment’s overall profitability.
So, let’s explore the various factors that can influence this decision, weighing in these insights to help you make informed choices for your next property purchase.
Pros, Cons, and Costs of A Subsale Property
Pros | Cons |
Established Advantage: Subsale properties are physically ready to view to be decided and located in matured and often central locations, where they provide predictable and stable returns. | Limited Flexibility: If the property is old, information about it may be hard to obtain. Also, the price is typically non-negotiable (no discounts or leeways), and available units are restricted. |
Immediate Revenue: Once required, these properties can be rented out almost immediately (based on your own research on the area and rental market), generating cash flow without delay. | Maintenance Cost: Older properties may require significant renovation to spruce up, which amounts to additional costs and affects your overall ROI. |
Market Insights: Since the property already exists, you can conduct your due diligence by accessing the neighbourhood, amenities or facilities, and potentially rental income. | Research Intensive: Due diligence is crucial during the initial stage, especially for older properties, to avoid hidden defects or unforeseen liabilities. You cannot charge the previous owners for repairs. |
Now let’s explore the costs of a subsale property, and be prepared to fork out the following:
Valuation Fees | Depends on the value of the property, usually borne by the seller, but can be pushed to the buyer. |
Property Agent’s Fees | They help negotiate and assist the buyer and seller in reaching an agreement. A skilled agent can provide valuable market insights. |
Always 10% of the property price, but you also need a minimum of an additional 20% cash in hand as reserves are recommended for unforeseen expenses. | |
Based on a price tier, depending on the price of the property. | |
Memorandum of Transfer | Transferring the deed from the buyer to the seller and stamp duty charges apply. |
Legal Fees | Costs of preparing and handling the legal documentation and passing it to the appropriate authorities, including stamp duty charges follow a price tier of the property’s purchase price. |
Miscellaneous Charges | MRTA/MLTA for mortgage assurance, fire/home insurance, loan instalment, interest, deposits for utilities, repair/renovation, maintenance, etc. |
Pros, Cons, and Costs of A Brand New Property
Pros | Cons |
Attractive Pricing: Developers often offer rebates and discounts to encourage and entice buyers (legal fees borne by the developer, stamp duty exemption, minimal downpayment), improving your initial investment margin. | Delayed Return of Investment (ROI): Must wait before generating rental income. May run the risk of construction of the building being delayed due to external/internal issues, or worse, the project being abandoned. |
Flexibility Advantage: Easy to find information on the project and to view the showroom. Flexible to choose unit type, direction, floor plan, etc. | Time Consuming: Long waiting time until completion if the property is under construction. |
Modern Appeal: New, unique designs and new facilities can attract higher rental rates, especially in rapidly developing areas. | Market Uncertainty: New developments can affect supply-demand dynamics in the area, potentially impacting property value. |
Defect Liability Period: Most developers offer a 24-month warranty to fix any issues related to the home’s build, reducing short-term maintenance costs. | Community Development: It takes time for a new neighbourhood to develop a strong rental market. |
While a brand new property is what many of us dream of, don’t forget about the costs of one:
A minimum of 10% or however much the bank is willing to lend you. In certain cases, the developer will have a special programme that requires less than the 10%, or nothing at all until the development is completed. | |
Based on the price tier, depending on the price of the property. | |
Legal Fees | Costs of preparing and handling the legal documentation and passing it to the appropriate authorities include 5% stamp duty charges, 6% government tax, and disbursement charges. |
Transfers ownership of the property to the rightful owner 6 months after the completion of the property. Charged based on a tier price and 6% government tax and disbursement charges. | |
Miscellaneous Charges | MRTA/MLTA for mortgage assurance, fire/home insurance, loan instalment, interest, deposits for utilities, repair/renovation, maintenance, etc. |
Key Considerations Before Investing In A Subsale Or Brand New Property
Before delving into deciding on which property type is the most ideal to invest in, here are some essential insights to help investors align their investment choices with their financial goals, risk tolerance and long-term investment strategies:
ROI/Capital Appreciation
Both subsale and brand-new properties offer potential return on investment and capital appreciation, but the dynamics can differ significantly:
Subsale Property | Brand New Property |
Due to their established market value and location, these areas often offer stable and predictable ROI. However, capital appreciation might be slower compared to emerging areas. | These can provide significant capital appreciation, especially in rapidly developing areas. Investors might benefit from buying at lower prices during pre-launch or construction phases. |
Often located in established neighbourhoods with proven demand, such as Bangsar, Damansara and Mont Kiara. | Typically feature modern amenities and designs, appealing to the growing middle-class demographic. |
It may offer immediate rental income potential, especially in high-demand areas like KLCC. | Often, it comes with developer warranties and lower maintenance costs in the early years. |
Recent trends in Malaysia indicate that properties in areas with declining yields have seen substantial value increases. This appreciation can significantly contribute to overall ROI, especially with rental income.
Rental Yield
Rental yield is a crucial metric for investors in Malaysia, calculated by dividing the annual rental income by the property’s value and expressing it as a percentage.
Subsale Property | Brand New Property |
Typically located in mature neighbourhoods, these properties can offer consistent rental income due to existing demand and infrastructure. | While rental yield might be uncertain initially, brand-new properties in strategic locations can command premium rents once the area is fully developed and in demand. |
Often, they offer higher initial rental yields due to lower purchase prices. | There may be lower initial rental yields due to higher purchase prices. |
Established locations like Bangsar can command steady rental demand. | Modern amenities can attract premium tenants, especially in areas like Mont Kiara. |
While new properties may offer lower initial yields, they often have the potential for faster capital appreciation in developing areas, which can balance out the overall returns over time.
Market Trends and Demand
Current market trends in Malaysia reveal a complex landscape influenced by inventory levels, mortgage rates, and buyer preferences.
Subsale Property | Brand New Property |
Invest in areas with proven demand and minimal supply growth to ensure steady rental income and potential for appreciation. | Look for upcoming developments in high-growth corridors, where demand is expected to rise due to new infrastructure, amenities, and population growth. |
Buyers are gaining more negotiating power than in previous years, especially in the subsale market. | Limited resale inventory in prime areas has increased demand for new construction in emerging locations. |
Financial Considerations
Investors should carefully weigh the financial aspects of both subsale and new properties to ensure they achieve their desired investment returns.
Subsale Property | Brand New Property |
These require a substantial initial outlay, including a higher downpayment and potential renovation costs. However, immediate rental income can offset these expenses. | Often, developers offer attractive financing options, including lower down payments and rebates. This can ease the initial financial burden, but be aware of delayed returns if the property is still under construction. |
Financing options may be more diverse due to established property values. | Higher initial purchase prices but often include modern amenities that suit the modern rental market. |
It’s crucial to factor in all associated costs, including maintenance fees, property taxes, and potential miscellaneous fees, when comparing the overall financial impact of subsale versus new properties in Malaysia.
High-Growth Investment Areas To Consider
1. Bangsar
Bangsar is a vibrant and upscale neighbourhood located just a short distance from the city centre of Kuala Lumpur. It is one of the most sought-after residential and commercial areas in the city, known for its lively social scenes, dining options, modern amenities, diverse community, and trendy lifestyle offerings.
Bangsar is home to a mix of luxurious condominiums, townhouses, and older bungalows, attracting both locals and expatriates. The area is popular for its convenient location, where a diverse community lives. Take a look at some of these brand new and subsale properties to consider as your next investment:
Brand New Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM763,333 | 580 sq ft – 1,185 sq ft | Leasehold | 2024 | |
N/A | 636 sq ft – 1,252 sq ft | Leasehold | 2021 |
Subsale Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
RM850,000 | 689 sq ft | Freehold | 2017 | |
RM2,550,000 | 4,500 sq ft | Freehold | N/A |
2. Petaling Jaya
Petaling Jaya is a well-rounded city that offers a high quality of life. It balances urban conveniences, green spaces, and a strong sense of community. Its strategic location and robust infrastructure make it one of the most developed and populous urban areas in the country.
Divided into several sections and neighbourhoods, each with its own unique character and social offerings. These include sections like Section 13, Bandar Utama, Damansara, and Kelana Jaya. Housing options range from high-rise condominiums and apartments to terraced houses and bungalows.
The city is home to a diverse population, including locals and expatriates and is popular among middle to upper-middle-class residents due to its convenient location and comprehensive amenities. Here are some brand new and subsale properties for grabs:
Brand New Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM789,000 | 692 sq ft – 1,085 sq ft | Leasehold | 2025 | |
N/A | 2,028 sq ft – 3,990 sq ft | Leasehold | 2026 | |
From RM506,000 | 583 sq ft – 1,129 sq ft | Freehold | 2027 | |
From RM691,000 | 775 sq ft – 1,420 sq ft | Leasehold | 2028 |
Subsale Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
RM705,000 | 1,470 sq ft | Freehold | N/A | |
RM365,000 | 947 sq ft | Leasehold | N/A |
3. North Kiara
North Kiara, also known as “North Mont Kiara”, is an emerging residential area adjacent to the more established neighbourhoods of Mont Kiara and Desa Sri Hartamas in Kuala Lumpur. This area is gaining attention due to its strategic location, tranquil environment, and increasing development of upscale residential properties.
North Kiara primarily comprises high-end residential developments, including luxury condominiums, serviced apartments, and gated communities. The community in North Kiara is diverse, with a mix of local professionals, expatriates, and families. The area is popular among those who value privacy, security, and a serene atmosphere. Take a look at what’s available to invest in this neighbourhood.
Brand New Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM659,000 | 1,033 sq ft – 1,582 sq ft | Freehold | 2027 | |
From RM868,000 | 1,141 sq ft – 5,523 sq ft | Freehold | 2028 |
Subsale Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM1,259,000 | 2,100 sq ft | Freehold | 2015 | |
From RM1,400,000 | 3,713 sq ft | Freehold | 2017 |
4. Kuala Lumpur
Kuala Lumpur, is a key destination for property investment due to its strategic location, strong economic fundamentals, and diverse property market.
Kuala Lumpur offers diverse property investment opportunities, from luxury residences and commercial spaces in prime areas to more affordable options in emerging suburbs. While the market presents both opportunities and risks, careful selection of location, property type, and timing can lead to significant returns on investment. Check out some of the upcoming and existing properties available for your next investment.
Brand New Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM328,000 | 700 sq ft – 1,000 sq ft | Leasehold | 2028 | |
From RM628,000 | 1,050 sq ft – 1,239 sq ft | Freehold | 2024 | |
From RM748,000 | 463 sq ft – 549 sq ft | Leasehold | 2026 |
Subsale Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
RM890,000 | 900 sq ft | Freehold | 2020 | |
RM540,000 | 729 sq ft | Leasehold | 2022 | |
RM1,500,000 | 2,800 sq ft | Freehold | 2010 |
5. Mont Kiara
Known for its expatriate community, Mont Kiara is a hotspot for investment in upscale condominiums and serviced apartments. The area offers international schools, shopping centres, and easy access to the city, making it popular among expatriates and families.
Its strategic location, excellent amenities, and strong property market make it an attractive area for property investment, with opportunities for both capital appreciation and rental income. As the area continues to develop, Mont Kiara will likely remain one of Kuala Lumpur’s premier neighbourhoods for years. Here are some brand new and subsale properties for sale.
Brand New Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM1,399,800 | 1,607 sq ft – 3,010 sq ft | Freehold | 2027 | |
From RM1,099,741 | 1,313 sq ft – 4,693 sq ft | Freehold | 2028 | |
From RM1,600,000 | 2,558 sq ft – 3,057 sq ft | Freehold | 2027 |
Subsale Properties For Sale
Project Name | Price | Built-ups | Tenure | Completion |
From RM1,680,000 | 689 sq ft | Freehold | 2010 | |
RM2,250,000 | 3,000 sq ft | Freehold | 2006 | |
RM1,250,000 | 1,668 sq ft | Freehold | 2005 |
Let Us Help You With Your Property Buying Journey!
Navigating the journey of choosing the right new launch project can be complex and challenging.
But fret not—we have curated resources with the right information, tools, and guidance to help you make an informed and confident decision. Check out our Ultimate New Launches Guide for all the information you need about the latest developments!
Whether you are a first-time home buyer, upgrader or investor, let us guide you on the processes, regulations, financing, and more! Start your journey today!
