Second, the theme of the renovation. Everyone has different likes and dislikes. If you have selected a very curated type of renovation, then naturally, the pool of people that share the same appreciation is a little smaller than the generic crowd. With the reduced number of people interested in the unit, this will also affect the demand of the unit. At that point, you will be in one of two positions. Either waiting a while longer for that buyer that shares the same appreciation or reducing the price in order to fulfil the sale in your desired timeframe. Generally, most buyers appreciate units that have functional necessities and are not overly cluttered with excessive renovations. This will allow them to save some cost and at the same time still have the flexibility to furnish the unit with their own preferred furniture. Additionally, given the current delays and increase in the cost of renovations due to the pandemic, it may actually be more sensible to purchase a renovated unit. Take this for example:
Purchase Price: $500,000 (Combination of Loan, CPF and/or Cash)
Renovation Cost: $50,000 (Cash or Renovation Loan with 4.5% Interest Rate)
Possible Cash Outlay: $50,000 (Not accounting for Stamp Duty, Taxes and other administrative charges)
Renovation Period: 2-3 Months
Purchase Price $550,000 (Combination of Loan, CPF and/or Cash)
Renovation Cost: N.A.
Possible Cash Outlay: N.A. (Not accounting for Stamp Duty, Taxes and other administrative charges)
Renovation Period: N.A.
So the main difference between a renovated unit and a non-renovated unit is the reduction of cash outlay and renovation period. Especially in our pandemic plagued times, many have been faced with renovation delays and increased cost, due to the reduced manpower and higher construction costs. Some have even had to scale down the extent of their renovation in order to keep it within their budget.
At the same time, if the price of the unit is within the valuation of the flat, then the potential buyer may even be able to factor in the cost of the renovation through the housing loan. Albeit, this is a generic perspective, and potential buyers will still factor in a small amount as touch up cost. But this still provides a comparison with the specifics subjected to the factors of each flat.