Profitability of New Launch Condo

Try walking into a glitzy new launch development showroom this weekend, and you will sure to be bombarded by this marketing speak by a property agent. “You should get a new launch condo over a resale condo, as it provides much better capital gain ! “

This common sales pitch is backed by the following factors.

Updated to reflect latest new launch profitability 

This article was updated with new sections below to provide readers with the latest updates on the most profitable new launch development that TOP in recent years

The goal is to highlight the most profitable new launches that have recently TOP and identify common traits that can help us make more informed investment decisions.

TOP effect

New launch developments are often touted to provide better capital appreciation due to the “TOP effect”. This is the case whereby prospective buyers are willing to pay more for a new launch because they are attracted to the idea that they will be purchasing a brand new property that allows them to build their dream home from scratch.

Compared to a resale condo, the buyers would have to either overhaul or make alterations on the current owner’s interior design. In addition to that, prospective buyers would have to be mindful of higher repair costs to be incurred when replacing air cons and faulty oven, cooker hood and pipings.

Early bird discount

Another factor often claimed to contribute to higher capital appreciation for new launch development, is the early bird discount that developers offer to drive awareness for a new project. Buyers purchasing early can save between 5% to 15%, enjoying a price cushion for capital appreciation.

The scope of this article

In this article, we will specifically dive deep into the actual performance of all new launch developments that achieve its TOP status between 2020 and 2023 and verify if this common saying is indeed true.

We do this by reviewing the performance of all new launches with the following characteristics

• Achieve TOP status between 2020 to 2023
• Mid-sized development with greater than 400 units built

We track the following metrics

• Profit – the actual quantum of profit that is made when selling the property
• Price appreciation – the average growth percentage between the property initial entry price and its exit selling price
• Compounded annual growth rate – the average annual price appreciation of the property over its holding period
• Holding period – the average no of years property is held, before being sold

To ensure we truly measure price appreciation enjoyed by direct buyers of new launch condos, we classified transactions into 2 categories.

• New sale – Buyer than purchased during the new launch phase directly from developer and reselling to another buyer
• Resale – Buyers that purchase after the new launch phase from another seller and reselling it afterwards

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Profitability of New Launch Condo Developments

Reviewing the performance of the different new launch developments that achieve its TOP status between 2020 and 2023. We easily infer that not all new launches performed equally well.

Focusing on price appreciation as a metric, we can segregate the different developments into 3 quartiles. With the upper quartile achieving strong price appreciation of between 20% to 25% growth ,the middle profile achieving price appreciation of 16% to 17% growth and the lower quartile achieving poorer performance of between 8% to 15% growth.

Stemming back to the common statement of new launches promising a higher return than its resale counterpart, this statement may not always hold true. Selecting a new launch development that fell into the lower quartile would mean that a comparable resale unit could perform equally well if not better.

Supply plays a major factor in influencing the potential for capital appreciation for new launch

Examining the top quartile developments and the lower quartile developments, it can be inferred that supply plays a major role in influencing the performance of new launch developments.

New Launch In Mature Estate With Limited New Launch Condo Supply Performed Well

Referencing the top quartile performers, Parc Esta, Jadescape, Stirling Residences and Forest Woods are new launch developments launched in mature estates.

These mature estates like Eunos, Sin Ming, Queenstown and Serangoon have not seen new mega development condo launches in many years. And the condo developments in these areas are mainly older developments with age 10 years and above.

For home buyers looking to relocate into these mature estates with established amenities. They will be comparing these brand new launch units with older units, and this is when the “TOP effect” works to its greatest effect to drive price appreciation.

Parc Esta and its competing developments

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Jadescape and its competing developments

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Forest wood and its competing developments

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New Launch in estates with over supply of newer condo development performance less optimally

On the other extreme, referencing the lower quartile development. You would notice that they are launched in areas where there is ample supply of new condo developments.

In the Woodleigh and Potong Pasir area, Park Colonial, Trever, followed by The Woodleigh Residences all launched consecutively between 2021 to 2023. Alongside other existing developments in the area, buyers have got many options to choose from.

Trever, Parc Colonial, Woodleigh Residences and its competing developments

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Similarly for Upper Serangoon and Hougang area, Riverfront Residences is launched in a area whereby there are lots of equally young comparable condo developments

Riverfront Residences and its competing developments

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Comparing new launch performance with comparable resale development in the area

In this section, we will dive deeper to compare each new launch with its resale counterpart to see if its price appreciation truly surpasses that of a comparable resale property.

The earlier trends hold, with the upper quartile performers outperforming their resale counterparts.

For more details on the advantage and disadvantages of new launch vs resale condo, refer to article link inline.

Comparison Whistler Grand and its resale counterpart

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Comparison Stirling Residences and its resale counterpart

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Comparison Forest Woods and its resale counterpart

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But we do see some exceptions whereby there are some resale developments that still manage to outperform its new launch counterpart.

Comparison Jadescape and its resale counterpart

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Taking Clover By The Park as an example, despite Jadescape’s decent performance, it still manage to outperform Jadescape.

Another example is The Bayshore, who performed equally well as The Seaside Residences over a 3 year holding period.

Comparison Seaside Residences and its resale counterpart

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When comparing the middle and lower quartile performers with their resale counterparts, you can see that their resale counterpart price appreciation cuts very close to theirs. Confirming the point that the much touted “TOP effect” is not common amongst all new launches.

Comparison Trever, Parc Colonial, Woodleigh Residences and its resale counterpart

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Comparison Riverfront Residences and its resale counterpart

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Updates to review latest profitability of New Launch Development in 2024

Which type of new launch development will yield the greatest profitability in 3 years ?

A recent question posted by our reader on how to identify new launch developments that could yield the most investment return within 3 years drove us down this rabbit hole. 

Typically, we would advise our readers and clients to be prepared to hold on to their new launches for at least 4 to 5 years before flipping it for maximum profit. Refer to the article “When should I sell my new launch condo after it TOP ?” for more insights on this. 

But in the sections that follow, we will review the profitability of all notable new launches that TOP in 2023 and 2024, and identify what are the common traits amongst developments that have done well within a short 3 year holding duration.  

Profitability review of New Launch Development that TOP in 2023 and 2024

To get things going. Let’s plot out all the notable mid to large sized new launch developments that have achieved its TOP status in 2023 and 2024.

As a rule of thumb, we tend to avoid shortlisting any boutique developments with less than 200 units in our research. Generally, small unit count and low transaction volume amongst these boutique developments are not the most conducive for investment return.

High Growth New Launch Development – Above 4% Annualised Capital Gain

Underperforming New Launch Development – Below 3% Annualised Capital Gain

Common Traits Amongst – High Growth New Launch Development

Let’s run through each of these developments and identified attributes that helped it achieve its strong capital appreciation. 

Ki Residences at Brookvale

• Newest freehold condominium in the upper Bukit Timah area
• Priced lower than surrounding freehold development, Floridian
• Priced very close to 99 year development in the neighbourhood, Mayfair Garden, Mayfair Modern. 
• Added benefit of being one of the largest 648 unit development in the area
• Positioned as a undervalued buy

Ki Residences – Resale Comparable

Penrose

• Newest and largest development in Aljunied area
• Pent up demand for RCR mature estate like Aljunied, with absent of new launch in many years
• Superior when compared to the many older boutique development without full condo facilities in Aljunied

Large vs Boutique Developments in Aljunied

Clavon and Parc Clementis

• Area saturated with mostly older development prior to the launch of Clavon and Parc Clementis
• Located in a district with huge homestay upgrader demand from both HDB and Condo upgraders
• Price gap between newer Clavon and Parc Clementis and surrounding older resale condo is not significant

Price Comparison – Clavon and Parc Clementis vs Surrounding Condo

Treasure at Tampines

• Newest mega development in Tampines
• Significant price advantage, pricing lower than comparable but older resale condo The Tapestry

Price Comparison – Treasure at Tampines vs Surrounding Condo

Common Traits Amongst – Underperforming New Launch Development

Having reviewed the common traits amongst high performers, let’s proceed to see if there is any commonalities amongst underperformers

Cuscaden Reserve

• Located in an area that is traditionally supported by foreign buyers
• Loss of foreign buyer demand due to ABSD being hike to 60%
• Low take up of high initial launch price, resulting in 20% discount being implemented by developer

Performance of New Launch and Condos in Orchard Area

Sky Everton 

• Lack of product market fit
• Sky Everton being a freehold development is priced with a significant premium compared to younger comparable 99 year condo in the area
• The CCR region is frequented by investors looking to optimise for yield, not freehold status. Sky Everton’s higher psf and purchase quantum results in sub optimal yield
• Latest wave of 99 year new launch is priced very close to Sky Everton, adversely impacting demand for Sky Everton

Woodleigh Residence and Seng Kang Grand Residences

• Both integrated development is priced with a 10% to 20% premium compared to comparable development in the area.
• With that in place, particularly in residence heartlands. Buyers tends to first prioritise the more affordable condo development located right next to the integrated development
• This presents a unique phenomenon, whereby the launch of an integrated development actually serves as a catalyst to the private condo located next to it.
• Reference the case of Woodleigh Residences vs Park Colonial.

Summary – Most profitable new launches in 2024

Having analysed each of these outperformers that delivered 4% to 6% annualised capital gain, they all share the following traits. 

For high performing new launch developments 

• Price advantage – price very closed to a neighbouring older development
• Lease life advantageous – being the newest condo in an area filled with older developments
• Located in an area with significant local homestay buyer demand

For under performing new launch development

• Premium pricing – price significantly higher than comparable in the area
• Product market misfit – freehold status with premium in an area where exit buyer do not prioritise freehold status
• Located in an area lack of regular homestay buyer demand. Luxury property does not work.

Final words

While it is generally true that new launches do provide a chance of greater capital appreciation compared to resale condos. It is important to note that this does not apply to all projects, careful due diligence needs to be exercised to select the right development.

At a high level, the existing supply of competing new developments in the area is an important factor to consider, alongside other factors.

Similarly, there are resale developments that have shown that they can outperform new launches and this remains a topic that deserves an in-depth coverage in another article.

More reads, more gains ?

Kudos on making it this far. The fact that you have invested the last 5 mins reading this article. We believe you are a like minded real estate investor looking to beat the rat race by getting more out of your real estate investment. If so, do check out the following articles.

• Full List of Condo that TOP in 2025 and 2024
• Renting 3 years to wait for New Launch Condo TOP – Worth it ?
• When should I sell my new launch condo after it TOP ?
• 2 Bed 1 Bath vs 2 Bed 2 Bath condo – Which is better for investment ?
• New Launch Condo with Balance Units
• What is GFA harmonization – How does it affect you as a investor ?
• Are all Integrated Developments in Singapore Profitable Investments ?