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Which Is A Better Bet For You — Buying New Launch Condo Or Resale Property?

One of the most attractive long term investment instrument in Singapore is real estate.

Regarded as one of the most resilient property market in the world, many regard Singapore as a safe haven for investment due to it’s stable political weather, pro-business environment and strong economic growth.

According to a Knight Frank report, in Q1 this year, real estate investment was $3.8 billion, a 26.7% higher than the $3 billion recorded in Q1 2020.

So you are considering investing in the Singapore private residential property market, the main question would be – should I buy new launch condo or resale?

In today’s article, we will take a look at the pros and cons of new launch condos and resale.

(1) New vs. Used

When you buy a new launch condo, you get everything brand new.

The building is new, your unit is new, the fixtures, appliances and fittings are all brand new. You may even be amongst the first few to use the facilities. You do not have to worry about leaking taps and spalling concrete on the ceiling and walls.

For resale condos, the condition of the unit may not be the best or well-maintained.

You will need to do some form of renovation. The plus point is that you can then renovate the unit to your preference and taste. However, the condo facilities may not be in tip top condition.

(2) Facilities

Newer condos tend to have the latest and unique facilities. Apart from the usual swimming pools, barbeque pits and gyms, most newer condos also come with modern facilities such as on-demand concierge services, pet pools and smart home features.

If you are buying for investment purposes, new launch condos tend be easier to rent out due to the newness of the property and the better facilities.

Older condos tend to have the usual facilities and not much more. You get your swimming pools, gym, clubhouse and not much else. Often times, the facilities in older condos are in need of some upgrading.

(3) Discounts

Before the official launch of a project, developers tend to have a VVIP preview and offer early bird discounts to gauge public interest and make a decision on the pricing. So if you are among those that commit at the preview, you may be getting a better price than those that buy later.

Developers also use early bird dscounts to sell units and create a demand scenario to encourage buyers to commit.

Another form of developer dicount could happen when the project is nearing the Additional Buyer’s Stamp Duty (ABSD) deadline. Developers have a 5-year deadline to develop a residential site and sell all the units within the project.

If they are not able to do, the developer will have to pay a penalty of 25% of the land price that they paid when acquiring the land. For projects nearing this deadline, developers tend to have a fire sale and give good discounts to sell off the remaining units instead of paying the penalty.

For resale condos, you are buying the property from another owner, your only form of discount is your ability to negotiate with the current owner and bring the price down.

(4) Flexible Payment Schemes

For new launch condos, you have more flexiblity in the payment schemes. You are allowed to borrow up to 75% of the price from a bank/lender and you pay the remaining 25% downpayment including the option fee, booking fee and stamp duties.

For the 25% downpayment, you can opt for a Progressive Payment Scheme (PPS) or a Deferred Payment Scheme (DPS).

For PPS, you pay a booking fee of 5% to obtain the Option to Purchase (OTP). You pay another 15% when you sign the Sale & Purchase Agreement. You then make payment progressively as the building is reach certain stages i.e. foundation work, reinforced concrete work, partition walls etc.

The DPS allows you to pay only the 20% as downpayment first and not pay anything for the next two to three years. Once the period is over, then you’ll resume paying monthly instalments. However, DPS is only available for projects that have received the Certificate of Statutory Completion (CSC) and Temporary Occupation Permit (TOP).

For resale, you pay the 25% downpayment and upon completion of the transaction, service the monthly instalments immediately. There is no PPS or DPS for resale condos.

(5) Maintenance Cost

Buying a new launch condo with everything brand new and first hand, there is minimal maintenance, if any. The developer will also have a warranty period where they will fix any defects.

For resale condos, which are obviously older, there is a tendency for problems to arise. Cracks on the walls, leaking tapes and pipes, repainting and such, adds to your maintenance costs. If you are buying to rent out, this could be a major setback as compared to buying new launch condos.

(6) Waiting Time

New launch condos are buildings under construction (BUCs). That means having to wait for several years before you can live in or rent out. So if you are in urgent need of a place to stay, new launch condos would not be the right choice.

For resale, you can move in or rent out immediately. So for investors, you can see rental income almost immediately.

What's Your Deciding Factor?

Ultimately, the decision to buy new launch condos or resale would be dependent on your current situation and circumstances.

If you are not in a hurry to move and want a modern looking bulding with updated facilities and fitted with the latest appliances, go for a new launch condo.

If you need a place to stay urgently or immediate returns on your investment by renting out, then a resale condo would be your choice.

The important thing is to work out your financials and decide which is the better option, given your current situation.

For the latest updated listings on either new launches or resale propeties, do check out with the proprietary A.I. smart search functions to find what you are looking for.

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