When considering the investment potential of new launch versus resale condominiums in Singapore, it is essential to examine the unique benefits and drawbacks each option presents. New launch condos typically offer buyers early bird discounts and the privilege of selecting from a wide range of units before they are available to the general public.
These properties boast the latest facilities, features, and designs, including smart home technology and modern amenities within the complex, such as supermarkets and childcare centers.
Additionally, new condos tend to have lower maintenance costs due to brand-new appliances and infrastructure.
On the other hand, resale condos provide opportunities for investors to find properties priced below market value, sometimes significantly so, as seen in the case of a unit at Suites @ Shrewsbury sold for only $550,000.
Resale properties can be rented out immediately, offering a quicker return on investment through rental income. They also tend to have larger unit sizes compared to newer launches, which can be more appealing to families and those desiring more space. Moreover, well-maintained resale units may require less expenditure on renovations and fittings.
Investors must also consider the financial implications of purchasing either type of property. For new launches, a progressive payment plan allows buyers to pay in installments as construction progresses. In contrast, purchasing a resale condo involves a series of payments, including the option fee, exercise fee, Buyer's Stamp Duty, and the final payment, which totals 95% of the purchase price.
Data from 3,612 URA transactions between 2018 and 2022 indicates that both new sale to resale and resale to resale transactions yielded high average returns of around 15%. Interestingly, sellers who divested before the Temporary Occupation Permit (TOP) saw higher profits of 12.3%, compared to those selling immediately after TOP at 8.05%.
Resale properties, particularly in the Core Central Region, have been profitable in 91% of transactions and often outperform new launches. However, this data should be approached with caution, as profitability can vary based on numerous factors, and developers are currently facing shrinking margins due to increasing land and construction costs.
In conclusion, whether a new launch or a resale condo makes for a better investment depends on an individual's financial situation, desired property features, and intentions for the property. It is advisable for potential investors to carefully weigh these considerations and seek professional advice if needed.
For expert guidance on choosing between New Launch Condo or Resale Condo, you reach out to Kaeden Ong at +65 9048 0660 for personalized advice.
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