New launch condo vs resale condo
A common question that will always resurface whenever a Singapore property owner reaches a milestone in their real estate journey that allows them the opportunity to make purchase considerations.
Particularly for owners with investment consideration, weighing out the pros and cons of getting a new launch condo vs a resale, extends beyond into finding a comfortable place of dwelling.
No easy answers – not all new launches are better than resale condos
The truth is that there are no easy answers. Both on paper and in reality, new launches do possess more positive investment attributes than a resale property.
But piercing behind the veil of glitzy new launch marketing and zealous agent speak, there are many unprofitable new launches that underperformed its resale counterpart.
It is our job as real estate investors to know when getting a new launch is better than getting a resale condo and vice versa.
The focus of this article
We will first lay out the general advantages of getting a new launch vs resale condo and we will quickly move towards focusing our attention on discussing situations in which a new launch is better than a resale condo and vice versa.
The general advantages of getting a New Launch Condo
All new launch buyers are aligned towards selling at a profitable price
Some call this the tribe mentality, this is a phenomenon that all new launch development possesses as an advantage over its resale counterpart.
The challenge with buying into a resale condo development is that different owners purchased their properties at different entry prices at a different time.
Your neighbours, who purchased their resale units 5 years earlier than you, can be selling it at a selling price that is unprofitable to you, but highly profitable to them.
As a late entrance to a resale condo development, you would often have to compensate with a longer holding period, 6 to 7 years, to allow the earlier owners to sell out first before you make your exit.
But this challenge does not apply to a new launch condo, all buyers entered at the same time during launch and made their purchase at the developer’s launch prices. And upon the TOP of the new launch, all new launch owners share the common intent of only exiting their properties till a profitable benchmark price is being met.
What’s more interesting is that, each new profitable selling price, serves as the basis for your to build a case for a higher selling price. This creates a healthy spiral that will increase your chances of enjoying higher price appreciation as compared to a resale condo.
Leverage on developer’s pricing strategy to enjoy in built price appreciation
So typically for large or mega sized new launch developments with unit count greater than 500 units, developers tend to launch the units at a lower price during launch day, with the intent to clear majority of the units. They will then gradually raise prices to yield greater overall profit for the project.
As a new launch buyer, if you are able to successfully ballot for a unit during launch day. You have got a first mover advantage. You will be able to capitalise on the gradual price increase and in-built price appreciation for your property, before any resale transactions even take place.
Exploit price disparity between different units in the new launch
With a resale condo development, you will only be privy to select units available for sale at a particular point in time. If you will have to make the best of what is available.
For the new launch condo, all units are available for ballot during launch day. In addition to that, units are often priced differently based on their facing, their format and their floor level.
By breaking down the developer’s pricing strategy, you will be able to identify potential value buy. Example, units that are non-pool facing are priced significantly lower than units facing the pool, then it could make sense purchasing such units and eventually reselling it with the proposition of being more affordable.
On the opposite spectrum, if units that are pool facing are only priced at a slight premium to non pool facing units then it makes sense to go for a pool facing units.
The same logic is applicable to paying a little more for a 3 bedroom unit vs a 2 + study unit.
Lower Interest expense for the first 3 years
Common knowledge, but worth mentioning. For new launches, you will be funding the bulk of the purchase netting off 5% booking fee and 15% down payment, under a progressive payment scheme that coincides with the stages of construction.
In short, the bulk of the mortgage and interest payment will only come towards the 3rd year when the development is about to be fully constructed aka TOP, and towards the 4th year when the development clears its statutory certification, also known as CSC.
Compared with a resale condo, which you will have to pay the full mortgage and interest upfront. You will at least enjoy a 30 to 40k savings in interest, depending on your loan size and the prevailing interest rate.
Brand new lease life
Real estate is a game of passing hot potatoes around, or old potatoes for a more fitting term. To make money, investment minded homeowners constantly trade into a newer and younger property and resell it for a profit to home stay focused homeowners who provide exit liquidity.
A well selected new launch unit with a fresh lease life is a plus for capitalising on this buy and sell cycle.
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The general advantages of getting a Resale Condo
Enough said about new launches, let’s dwell into the general advantages of getting a resale condo.
Ready for immediate occupancy or rental
There is a reason why there is always a demand for resale condo. For buyers that are working with a single property portfolio, waiting 3 years for a new launch development to be fully completed is a tough sell, resale condo will be the go-to option.
As a side note, if you were ever considering the option of renting while waiting 3 years for a new launch unit to be constructed, think again.
The $120k rental + $50k buyer stamp duty + agent fee incurred when selling your property for $25k will easily add up to a total cost of $200k.
A typical new launch makes $250 to $300k, you would be doing a lot of work to make $50k if you were to go down this route.
Less room for error when selecting unit via physical viewing
Buying off site plan and floor plan could be risky when purchasing a unit in a new launch development. You will need to consider what you will be exposed to in your view based on what’s shown on the site plan and what’s to be built in the future, based on the URA master plan.
It is not uncommon to hear of a situation whereby new buyers bought a unit with the appeal of an unblocked open view, but met with the unfortunate news of a future BTO to be right in front of your unit when it TOPs.
Being able to view physical units to inspect for views, air flow, actual layout, neighbours, development’s density is a plus when it comes to mitigating the risk of selecting a wrong unit.
Larger units with more living spaces
Condos design and built can be categorised into 2 categories, old era and new era. In the old era, developers optimised for space, generously throwing in service yards, bay windows and large living rooms.
In the new era, developers optimised for affordable quantum, packing all the necessary living spaces into the smallest unit possible.
So if you are someone that values storage space, laundry space at affordable psf and potentially quantum then there will be a higher chance that a resale condo can fulfil those requirements.
Profitability of new launch vs resale condos
In this section, we will dive deeper to compare the profitability and capital appreciation of new launch condo vs resale condo. We will see if new launch condo’s price appreciation truly surpasses that of a comparable resale property.
Base on a seperate article where we dived deep into the profitability of new launch condos. We observed that while it is true that new launch condos are generally more profitable than resale condo. The outperformance of new launch condo over its resale counterpart is not uniform across all new launches.
Generally there are 2 category of new launch condos, categorised in terms of their performance.
- Tier 1 – New launch that are more profitable than resale condo
- Tier 2 – New launch that are less profitable than resale condo
Tier 1 – New launch that are much more profitable than comparable resale condo
Jadescape (new launch) vs resale comparables
| Project Name | Profit | Price Appreciation (%) | Holding Period (years) |
| Jadescape (new launch) | 322,328 | 21.75% | 3.3 |
| Tresalveo (resale) | 301,910 | 19.52% | 6.3 |
| Clover by the park (resale) | 357,189 | 22.12% | 7.6 |
Whistler Grand (new launch) vs resale comparables
| Project Name | Profit | Price Appreciation (%) | Holding Period (years) |
| Whistler Grand (new launch) | 278,037 | 25.56% | 3.1 |
| The Trilinq (resale) | 182,479 | 13.83% | 5.2 |
Stirling Residences (new launch) vs resale comparables
| Project Name | Location | District | Region | Completion | No of Units | Profit | Price Appreciation (%) | CAGR (%) | Holding Period |
|---|---|---|---|---|---|---|---|---|---|
| Stirling Residences (new launch) | Queenstown | D3 | RCR | 2022 | 1,259 | 281,461 | 21.12% | 6.05% | 3.3 |
| Queens Peak | Queenstown | D5 | RCR | 2020 | 736 | 188,613 | 17.50% | 3.66% | 4.4 |
| Commonwealth Towers | Queenstown | D3 | RCR | 2017 | 845 | 194,786 | 12.98% | 2.87% | 4.1 |
Forest Woods (new launch) vs resale comparables
| Project Name | Location | District | Region | Completion | No of Units | Profit | Price Appreciation (%) | CAGR (%) | Holding Period |
|---|---|---|---|---|---|---|---|---|---|
| Forest Woods (new launch) | Serangoon | D19 | OCR | 2020 | 519 | 249,325 | 22.40% | 4.53% | 4.5 |
| Jade Residences | Serangoon | D19 | OCR | 2017 | 171 | 52,619 | 4.31% | 0.52% | 7.3 |
| Sunglade – 3-5 year holding period | Serangoon | D19 | OCR | 2003 | 475 | 149,745 | 12.60% | 2.89% | 4.3 |
Tier 2 – New launch that are less profitable than its comparable resale condo
The Woodleigh Residences (new launch) vs resale comparables
| Project Name | Profit | Price Appreciation (%) | Holding Period (years) |
| The Woodleigh Residences (new launch) | 223,033 | 17.49% | 3.2 |
| The Poiz Residences (resale) | 280,043 | 17.77% | 3.6 |
| Blossoms @ Woodleigh (resale) | 518,695 | 53.25% | 5.6 |
| 8@woodleigh (resale) | 140,698 | 11.42% | 5.8 |
The Seaside Residences (new launch) vs resale comparables
| Project Name | Profit | Price Appreciation (%) | Holding Period (years) |
| Seaside Residences (new launch) | 274,645 | 19.38% | 3.8 |
| The Bayshore (resale) | 260,413 | 32.89% | 10.8 |
Riverfront Residences (new launch) vs resale comparables
| Project Name | Location | District | Region | Completion | No of Units | Profit | Price Appreciation (%) | CAGR (%) | Holding Period |
|---|---|---|---|---|---|---|---|---|---|
| Riverfront residences (new launch) | Hougang | D19 | OCR | 2023 | 1,451 | 166,417 | 17.53% | 4.88% | 3 |
| Kingsford Waterbay | Hougang | D19 | OCR | 2018 | 1,157 | -39,265 | -3.84% | -1.18% | 4 |
| Riversails | Hougang | D19 | OCR | 2016 | 920 | 156,611 | 15.63% | 4.52% | 4 |
Factors that Influence the profitability of new launch vs resale condo
Referencing the performance of the 2 different categories of new launches above. The following factors plays a significant role in determining whether a new launch condo can outperform a resale condo or vice versa.
- Price disparity – psf price gap between new launch vs resale
- Purchase Quantum – overall purchase quantum of new launch vs resale
- Layout – liveability and efficiency
New Launch Condo is worth buying when …
When the price of new launch is priced at a reasonable premium to surrounding resale development
Entry price is a big deal when it comes to all real estate investment, you can have the best facilities, layout and location. But if it is overpriced and you bought into the hype, you will be looking at marginal profits.
On the contrary, look for new launch developments that are priced very closely to the surrounding resale development. It is a given that psf would be higher, but have a second at the new launch price quantum.
Due to its smaller square footage and more efficient layout, you could be marketing the new launch unit at a similar, if not slightly higher premium than a surrounding resale condo. This will equip you with a strong selling proposition to exit with a good profit during TOP.
When there is limited competing supply in the area
Another factor to look out for is competing developments within the immediate geographical area for the new launch. For a simple rule of thumb looking at developments within the same MRT station and developments 1 or 2 MRT stations away.
Consider the age of these developments, its selling price, its selling quantum, its layout efficiency and if there are an abundance of units of the same room type available.
If the answer errs towards scarcity then you are in a good position.
When the layout of the new launch is superior to comparable resale
Your prospective exit buyer for your new launch is potentially purchasing for homestay, if not homestay plus investment.
Hence layout efficiency is very important, the goal is to pay as little in terms of square footage but to have maximal living space.
The competing resale developments in the area, provides large square footage, bumping up their resale quantum, despite lower selling psf. But offers lots of inefficient corridor space, private elevator, air con ledges, planters boxes or bay windows.
Then your new launch development would have a strong case for outperformance.
Resale Condo is worth buying when …
When the launch price of a new launch is a lot higher than the surrounding resale condo
This happens when a new launch that is gaining a lot of hype is being launched. Generally, hype and marketing success is good for new launch developers but bad for buyers.
If you the new launch is priced a significantly higher psf than surrounding resale development. Then purchasing a resale development would give you an opportunity to sell into the future price appreciation of the new launch, using it as a benchmark and price catalyst to upsell your own resale unit.
In a separate article, we expanded into this topic of how to find undervalued resale condo development by analysing price gaps between new launch and resale developments.
When the size and layout of the resale development is superior to the new launch development
There are hits and misses when it comes to a new launch development. In the event, when you see an opportunity whereby the new launch is offering a sub-optimal layout to its surrounding resale development then it makes sense to capitalise on buying the resale unit and use that as a selling point to prop up the price of your own resale unit.
So an example of this is the comparison of the Hundred Palms ECs 3 bedroom compact unit type with its comparable 3 bedroom compact unit type in Affinity at Serangoon.
A 900+ sqft 3 bedroom compact unit in Hundred Palms EC features an enclosed kitchen, yard and a utility room, while a similar sized unit in Affinity at Serangoon features only an open, unenclosed kitchen, without yard and utility room.
Given the area attracts family buyers with children, the Hundred Palms ECs’ layout provides an attractive selling proposition to be marketed against its competing new launch development, Affinity at Serangoon.
Hundred Palm EC is a EC that is about to achieve its MOP in Dec 2024, it is not exactly a resale development, we are referencing this example strictly for the differences in layout.
When the resale development possess stronger attributes than the new launch
Due to availability of land plots, not all new launch developments possess superior attributes when compared to resale condos.
For example, a mega sized integrated new launch condo development can be generating a lot of hype and interest in a particular area. But in actual fact, due to the location of its land plot, it falls short of the 1km radius of a particular reputable school. In comparison, its competing resale developments could be located within 1km radius of s reputable primary school.
In this case, it makes sense to reconsider if it is better to purchase the resale condo that is within 1km radius of the reputable primary, and leverage the new benchmark prices set by the new launch development as a price catalyst.
For a full suite of key investment attributes to look out for when evaluating investment property refer to article “ Which condo is good for investment in Singapore “.
Risk consideration – New launch condo vs Resale condo
Having dealt with the profitability comparison between new launch condo and resale condo, it is a opportune time for us to segway into comparing the risk that we undertake when purchasing a new launch condo development vs a resale condo.
Unit selection Risk
For new launch condo, you will be purchasing a unit strictly, based off what you see in the showroom and development’s site plan. While it may seem trivial in the beginning, but the risk of you purchasing a unit with unforeseen negative attribute could be significant. If you did do your due dillegence when it comes to unit selection.
We have seen clients experiencing issues renting and selling their new launch property due to their unit facing bin center of neighbouring condo development or their block being located to a construction site with on-going heavy piling work.
On the other hand, unit selection risk is a lot lower for resale condo. Given that you are able to physically view and examine the facing of the unit, its surrounding noise level before purchase.
Risk of not being able to find Tenant
Having owned a new launch unit that recently TOP myself. I felt that the stress and the risk associated with not being able to find a tenant with speed is a understated challenge that most new launch buyer overlook.
When your new launch unit attain its TOP, all the other buyers that bought into the same development is looking to list their unit for rent at the same time. This results in a sudden surge in competing supply which could result in you not being able to secure a tenant with ease.
On the other hand, for resale developments, the competition tends to be less intense as not all units are competing for tenant at the same time.
Risk of Lease Decay
This is an area in which new launch development have a significant upper hand over resale condo. As new launch units comes with a fresh lease, there is hardly any concern over lease decay.
On the flip side, for resale units, you would have to consider the age of the development carefully. As soon as it closes in to the 30 year mark, you should be wary of the risk of lease decay.
Part 2 – Diving deeper into the profitability of Resale Condo
In earlier section where we compared the profitability of new launches vs resale condos. We concluded that new launch condo generally tends to show higher potential for capital appreciation.
While this is true, we understand that new launch condo is not for everyone. There are some buyers out there that are strictly looking for a resale property that they can live in or rent out immediately.
Hence we extended the article to dive deeper into the profitability of resale condos and further elaborating on how to identify one.
Resale condos that have generated over 350k profit for its owner
| Project Name | Location | Tenure | No of units | Sales Vol | Average Profit | Average holding period (years) |
| THE SEA VIEW | East Coast | Freehold | 546 | 6 | 1,199,409 | 11 |
| THE ESTA | East Coast | Freehold | 400 | 6 | 1,024,284 | 10 |
| THE CALROSE | Lentor | Freehold | 421 | 8 | 446,367 | 6 |
| THE RAINTREE | Bukit Panjang | 99 yrs FROM 2003 | 315 | 9 | 375,393 | 5 |
| CASPIAN | Jurong West | 99 yrs FROM 2008 | 712 | 15 | 465,305 | 10 |
| KOVAN MELODY | Kovan | 99 yrs FROM 2004 | 778 | 16 | 594,642 | 12 |
| THE QUARTZ | Seng Kang | 99 yrs FROM 2005 | 625 | 20 | 434,222 | 10 |
Resale condos that have generated losses or sub optimal profit
| Project Name | Location | Tenure | No of units | Sales Vol | Average Profit | Average holding period (years) |
| THE RESIDENCES AT W SINGAPORE SENTOSA COVE | Sentosa Cove | 99 yrs FROM 2006 | 228 | 69 | -1,460,800 | 13 |
| MARINE BLUE | Marine Parade | Freehold | 120 | 5 | 180,500 | 6 |
| NOUVEL 18 | Newton | Freehold | 156 | 1 | -548,000 | 1 |
| THE SORRENTO | Clementi | Freehold | 131 | 7 | 140,758 | 9 |
| SUITES @ EASTCOAST | Bedok | Freehold | 116 | 5 | 58,124 | 8 |
Insights derived from comparing high performing vs under performing resale condos
The quick cross sectional review of the most profitable vs the least profitable resale condo developments provides the following insights.
The right resale condo can also generate equally healthy profits as new launch condos
Firstly, it should be noted that it is possible to generate outsized profit from buying a resale condo. And it is a myth that buying a resale condo always comes with suboptimal profit.
A longer holding period is required for resale condo to generate healthy profits
Next, you need to be able to have a longer holding period in order to make money from resale condo. Referencing the 1st category of outperformers amongst the resale condos, you will see that the owner held it for an average of 6 to 11 years.
There is a real risk of losing money when not selecting the right resale condo
Third, there is also a chance that you will lose money if you do not know what you are doing and buy into a resale condo by strictly looking at where you want to live and what you like, without considering what your future exit buyers are looking for.
Attributes that determine if a resale condo is worth buying
The section above provides a good opportunity to dive deeper into what it takes to determine if a resale condo is worth buying.
In essence, how to avoid owning something that falls into the loss making resale condo category and how to own a resale condo that can bring you your next pot of gold.
#1 – Size of Development and Transactional Volume
An easy way to avoid making losses is to stay away from small boutique condo developments, these are condo developments that are below 300 units.
To be specific, the chances of making losses are commonly seen amongst developments with less than 150 units.
To be frank, smaller condo developments are not much worse off in terms of liveability, but they are set out to fail simply based on buyer’s mechanics for a lack of better word.
Property prices are fuel by transaction volume
So the cheat code, property prices are not built entirely based on fundamentals like good location, best layout or aesthetics. It is built by the number and recency of profitable transactions recorded by your neighbours.
If you own a small development with only 100 owners, your only proxy price would possibly be that of your neighbour that has sold his property some time back. Similarly his proxy price would be the previous neighbour that has sold his property further back. Worst, if the selling price was an unprofitable one, you would have to proxy against an unprofitable selling price.
On the flip side, apply this similar thinking to a resale condo development with 1,000 units. The chances of you referencing a profitable and recent transaction sold by your neighbour is much higher.
Fellow owner psychology
Again another pointer that does not relate to fundamentals, consider the mindset of your fellow owners. Owners that purchase into smaller boutique developments tend to purchase it with the intent of living in it for the long haul, with investment return thrown to the back seat.
Hence you see lesser transactions or even the willingness to let go of the property at lower price without much emphasis on making money.
Compare that with the owners in large sized, popular condo developments, you get more owners that are placing investment return on top of mind. Once they see the opportunity to nett a healthy 300k plus profit, they will be willing to transact, further fueling transaction volume and the preservation of profitable pricing.
#2 – Popularity of the resale development
Every location will have its “hero” condo development. That’s the development that potential buyers will always ask for and also the development that agents will always promote to their client.
Think …
Jadescape in Marymount
Parc Clementis in Clematis
Treasures in Tampines
Jgateway or Jden in Jurong East
From a property portal standpoint, these popular developments are also the common search terms that buyers and agents will normally enter when searching for properties.
So positioning your purchase in a popular development, together with the attributes that are being discussed here, will improve your chance of making money when buying a resale condo.
#3 – Price gap between resale condo and its comparable new launch counterpart
The bigger the price difference between your prospective resale condo vs the upcoming new launches in the area the better.
Ideally you want to position your unit against the new launch as the more affordable option. This allows you to have a comfortable benchmark price for you to market against and also gives you the opportunity to tap on buyers that are excluded from the new launches due to affordability.
We discuss at length about how to find undervalue resale property by analysing price gaps between new launches and resale condo.
#4 – Present of price catalyst
Inline with the earlier point, you will want to have narratives to help justify and stimulate the price appreciation for your resale condo.
Examples of price catalysts are as follows.
- Upcoming new launch in the area, setting new benchmark prices
- Development of new MRT line
- Redevelopment of the area into new township
- Re-location of a reputable primary school into the area
- Development of new commercial hub in the area
- Development of BTOs in the area – generating new HDB upgrader’s demand
#5 – Fundamentals
Of not forgetting to evaluate your resale condo based on the fundamentals that it possess.
We discuss a lot more fundamentals in the article Which condo is good for investment in Singapore ?
In short you should be looking out for the following characteristics to determine if your resale condo is worth buying.
- Potential demand from surrounding HDB upgraders
- Upcoming URA transformation plan for the location of property
- Proximity to MRT
- Proximity to reputable school, within 1km and 2km radius
- Proximity to international school
- Proximity to expat’s place of work
- Surrounding area supply of competing property
- Layout of units within the development
- Price of units in comparison to other developments
Is resale condo worth buying ?
The answer is yes. Provided if you know what you are doing, prioritising both investment specific criteria, alongside home stay, liveability considerations.
As a summary a resale condo is worth buying if you are able to check the following criterias.
- Holding power – be ready to hold it over a 6 years horizon
- Ideally you live in it while waiting for price to appreciate
- The resale condo possess most of the attributes listed in section above
Getting a new launch condo vs resale condo as your 2nd property ?
Having gone through the pros and cons of a new launch condo vs resale condo, you could be interested in finding out more about how you can start making plans towards getting one without incurring ABSD.
For more insights refer to the following articles.
- What is decoupling in property – All common questions answered
- How to own 2 properties in Singapore ? – Practical Methods
- The complete guide to “sell one buy two” property investment strategy
- Is it worth paying ABSD for your second property ?
- HDB Essential Occupier Scheme – Buy 2nd Private Property
If you are a BTO or EC property owner and your property have attained its MOP status refer to the article below for ideas on what your next steps could be
- What can I do after EC MOP ? – Everything you need to know
- 7 Options to consider when BTO MOP
- How do you make $500k investing in resale condo ?
Need Clarity Before Committing to a New Launch Condo?
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- A tailored shortlist of new launch condos that match your search criteria
- Side-by-side pros and cons analysis of 2–3 projects you’re currently considering
- A second opinion on which project offers the best balance of profit potential and downside protection
Book your New Launch Research Consultation now to make a confident and well-informed decision.
