Singapore’s private property market has long been viewed as an attractive and aspirational asset class for many. Yet for home buyers and investors alike, one question remains timeless: should you buy a new launch unit or a resale property?
In recent years, this question has become even more complex. The property cycle in Singapore has shown a consistent pattern of new launch prices increasing by around $400 per square foot (PSF) every five years, largely driven by land acquisition costs and developer pricing strategies. Resale prices tend to follow suit eventually, closing the gap to new launches. Understanding these dynamics can help you make a clearer, more informed decision.
The Price Tug-of-War: New Launch vs Resale
New launches are often seen as the drivers of price trends. Buyers are typically drawn by modern designs, new facilities, and deferred payment schemes. However, as resale prices rise, some existing developments can be priced surprisingly close to newer ones.
This is especially noticeable with TOP (Temporary Occupation Permit) projects, where prices may already be matching, or even exceeding, those of nearby new launches. When resale quantum approaches that of a new launch, buyers should carefully weigh the pros and cons of each option.
A Practical Way to Evaluate Your Options
A useful approach is to look at the true cost of ownership and financing structure.
With a resale unit, you can move in immediately but must pay the full mortgage quickly. In contrast, new launches come with progressive payment schemes, meaning your home loan repayments are smaller initially and increase as the project nears completion.
However, if you’re purchasing a new launch, you’ll likely have to rent another property while waiting for your unit to be ready. A smart way to compare is to calculate the total rental costs you would incur during this wait and weigh it against the upfront full mortgage commitment of a resale purchase.
If the rental and waiting period costs still make the new launch attractive, it may be the better choice for you.
Understanding the Pairing Strategy
Another useful tool to guide decision-making is the Pairing Strategy, which helps identify the most suitable property choice depending on market conditions.
In any given season, certain combinations of property types and locations present better value. For example, resale units in the Rest of Central Region (RCR) may be particularly appealing in one quarter, while new launches in the Core Central Region (CCR) might offer greater upside potential in another.
This dynamic strategy groups property choices into categories like:
It’s important to remember that multiple ‘optimal pairings’ may exist simultaneously. These pairings evolve with shifting price trends, demand-supply factors, and macroeconomic conditions. As a result, buyers must stay informed and regularly evaluate whether the pairing that worked a year ago still holds today.
The Pairing Strategy serves as a useful guideline, not a guarantee. It must always be complemented by thorough research and personalised financial planning.
What About Market Trends?
Macro factors also play a key role in influencing property demand. Globally, we are observing a shift in capital flows:
If interest rates continue to decline in the US and globally, as many analysts predict, Singapore’s property market could experience renewed demand from both local and foreign investors.
How to Spot a “Safe Bet” in New Launches
For buyers considering new launches, a practical rule of thumb is to check if the launch price is within 15% to 20% of the PSF pricing of surrounding existing developments or new projects. This suggests fair market alignment and reduces the risk of overpaying.
Another useful guideline: if the total quantum of a new launch unit is very close to that of a nearby TOP project, it may be smarter to choose the new launch. You’ll enjoy brand-new fittings, the latest designs, and a longer lease tenure (in leasehold cases), often at minimal price premium.
Think Ahead: Your Exit Strategy
Lastly, any property purchase should consider not just entry but also exit. Ask yourself: how much will the next buyer be willing to pay when your new launch reaches TOP and becomes available for resale?
Understanding demand trends in the area, the supply of upcoming new developments, and potential future MRT or infrastructure improvements can give you valuable clues about your future resale potential.
Conclusion: There’s No One-Size-Fits-All Answer
The decision between a new launch and resale ultimately comes down to your personal timeline, financial situation, and risk tolerance.
If you value the flexibility of progressive payments, brand-new features, and potentially better capital appreciation at completion, a new launch may suit you better.
If you prefer immediate occupancy and are comfortable with a larger upfront mortgage, a resale unit offers certainty and speed.
In today’s fast-evolving market, the key is to stay informed, do your calculations, and make a decision that aligns with your lifestyle and long-term goals.
Still unsure whether a new launch or resale property suits your needs in today’s market? Our experienced consultants can help you cut through the noise and guide you toward the right property decision for your goals. Contact our team today to get personalised advice and explore your best options with confidence.
Disclaimer: Information provided on this website is general in nature and does not constitute financial advice or any buy or sell recommendations.
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