Buying condos that are T.O.P— What you must know

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TOP refers to the term Temporary Occupation Permit. If a condo has this permit, then it means that the development on this project had started quite a while back, and it is now almost ready to be lived in. So, all the condos that will TOP in 2020 have been under construction since 2018, at the very least.

Benefits of buying TOP Condos

Two words: Time and Convenience. The idea of moving into a brand new house is very alluring, and buying a condo that is almost finished would mean that you could move in immediately.

However, there are several questions that you should ask yourself, when buying a new property. Do you really need to? If you do, then why? Is it to live there, rent out or resell shortly afterwards? How are you going to finance it?

To understand the nuances of real estate and how developers price, there are two concepts you need to be familiar with:

  1. The buyer’s perspective
  2. The seller’s perspective

1. The buyer’s perspective

There are two kinds of gratification, just like there are two kinds of buyers. Delayed gratification and instant gratification.

The buyer who chooses to buy first and then wait :

  • Believes in delayed gratification
  • He knows that moving in will not be possible for a minimum of 3-4 years
  • He makes the purchase and waits, therefore paying a lesser price as a perk for believing in and investing in the project early.

The second kind of buyer:

  • Believes in instant gratification
  • He is willing to pay for speed and convenience
  • He buys at a later developmental stage, when the units are ready to be lived in
  • He pays more, because of the convenience of getting the keys early
  • The price might be higher because the seller has less urgency to sell, as several units have already been sold.

2. The seller's perspective

This is where things get a bit more interesting.

The sellers know that two kinds of buyers exist, and work accordingly.

  • They price their units at a lower value at the beginning of the project, and raise it in increments as the project goes on
  • Ultimately, when the project has been completed, they price the unsold units at very high prices, as they factor in the speed and convenience made available to the new buyers
  • There is no urgency to sell now
  • After all, the first sale will always be a bigger win than the 10th one

Buying condos that are almost TOP

Applying the two principles above, it is easy to understand why ‘almost completed’ developments sell at a much higher price.

  • The seller will have no pressure to sell units, so they will raise the price
  • Potential buyers will be ready to buy it at this price as they value the speed and convenience at which they can now move in.

Now, why could this be bad? And what does reselling have to do with it?

This is because when buying an almost completed development, you’d be buying at a much higher price than 70% of the other residents. They would be paying, say, $200k, and you’d be paying $400k. If you plan on reselling, it would be much harder to make a decent profit.

Let’s explore this further.


Example 1. Resale EC Transaction

Let’s look at two units- one with a pool view, and one without. Which one would sell for a higher profit? The unit with the pool-view right?


The unit with the pool view made a profit of $140k, while the one without made a profit of $200k,which is significantly higher.


  • Logically speaking, a pool view unit will have a higher value than the one without and thus sell for a higher price. However, the higher sale price equates to an initial higher purchase price as well! Hence there is little to no difference in the profits between the units
  • However, the pool view unit was bought later and thus cost $68k more, reducing the profit margin compared to the other.

Even though the buyer purchased the unit at a higher price than the others, he cannot sell at a higher price. This is because of how the market economy works.

  • If most sellers are selling at a much lower price than you, then that will be the market price for the property
  • Given the market price and availability of cheaper units, which buyer will be willing to buy from you if you price much higher?

Ultimately, the pool view condo was bought at an increased price of $68k, but sold at an increased price of only $8k, reducing the profit margin by $60k compared to the other unit

This simply demonstrates the point we're making. It is wiser to buy earlier, than later.

Example 2. Resale EC “Bounce-out” Units

A bounce-out unit refers to the EC balance units that go back on the market. This happens when the original deal falls through. This could be due to a change of heart, or a couple breaking up.

As a result of this happening:

  • These bounce-out units are back on the market as new condos for sale
  • According to the buyer’s perspective, there is a section of the market that is willing to pay a lot more money if they can move in immediately
  • Therefore, these bounce-units will be priced at a lot higher than before when they are put on the market
  • Customers are willing to pay this price, as the units are ready to move in

You could be one of two people here:

  • You could be the buyer who bought early, and then sold the ready units at a much higher price later on
  • Or, you could be the buyer who buys the ready units later on from the people who have bought early.

In the name of speed and convenience, you could either be the guy who sells at much higher, or the guy who buys at much higher.

Are you wrong if you fall in the latter category of late buyers? Not necessarily, you may have your own reasons. You may not be willing to wait for a long time to move in, and might be willing to pay more than everyone else.

However, it is important to know the consequences of buying later. And the huge chunk of profit you could be missing out on.


The point we are making here is that it is important to plan ahead. People buy property for a variety of reasons, but if reselling for a profit is one of them, you should always buy early.

If early buyers purchase at a price that is $200k cheaper than yours, and if they are looking to make a profit of $200k, then you will have no room to make a profit at all.

This is because you will be buying a ready unit at $400k, while they are selling their ready units that they purchased early at $200k. Therefore, your property prices will remain stagnant, because you bought it at a more expensive price than others.

In conclusion, be aware of the entire picture, so that you are not trapped with an expensive property that you cannot easily resell. Want to know more? Drop me a message, and let's have a chat.