Condo Price Trends: Deep Dive Into New Launch Vs Resale Market

The Singapore property market is currently witnessing a surge in condominium prices, prompting buyers to weigh their options between new launches and resale units. With new launch condos prices commanding upwards of $2,200 per square foot (psf), the allure of more affordable resale condos prices is becoming hard to ignore. 

This blog dives into the nuanced dynamics of the condo market, offering insights into price trends that could influence your decision-making process. Whether you’re a first-time buyer or looking to invest, understanding these trends is crucial for navigating Singapore’s competitive real estate landscape.

Understanding The Price Gap Between New Launch and Resale Condos

The price gap between new launch and resale condos in Singapore has been a topic of much discussion among potential homebuyers and investors. This section explores the factors driving this disparity, breaking down the elements that contribute to the pricing strategies of developers and the resulting market response.

i. What’s Driving The Price Gap?

Over the last decade, the gap between new launch and resale condo prices in Singapore has shown significant fluctuations. Historically, from 2013 onwards, the market observed a widening disparity due to a combination of factors that has gone on to create an impact on the new and resale condos:

• Historical trends: Since 2013, the new launch condo prices have seen an overall upward trajectory. Initial prices were relatively lower following a series of governmental cooling measures aimed at stabilising the market. However, as these measures adjusted to market reactions, prices began climbing again, peaking around 2021 before stabilising to current levels.
• Pandemic impact: The outbreak of COVID-19 had a pronounced effect on both supply and demand. Construction delays and a temporary halt in new launches during the circuit breaker period in 2020 led to a supply crunch, contributing to higher prices for available new units.
• Rising construction costs: In the post-pandemic period, the construction industry faced increased costs due to disrupted supply chains and safety regulations, which in turn led developers to hike the prices of new launches to maintain profit margins.
• Land prices & government policies: The Government Land Sales (GLS) programme and cooling measures such as the Additional Buyer’s Stamp Duty (ABSD) have historically influenced land acquisition costs for developers, which are then reflected in the launch prices of new condos in the Singapore property market.

ii. New Launch vs. Resale: The Price Per Square Foot (psf) Breakdown

Analysing the psf price trends offers a clearer picture of the evolving market dynamics:

• Comparing the numbers: Data shows that smaller units in new developments have consistently commanded higher psf prices due to the premium placed on new facilities and finishes. However, the psf price for larger resale units (>1200 sq ft) has become more competitive, often providing more space for the same investment.
• Freehold vs. leasehold prices: The tenure of a property significantly affects its price. Freehold properties typically maintain or increase their value over time, contributing to a higher psf in new launches compared to resale leasehold projects, where the lease decay can impact value negatively.
• Regional differences: Price trends vary significantly across different regions. The Core Central Region (CCR) generally sees the highest psf due to its prime location and luxury developments, followed by the Rest of Central Region (RCR) and Outside Central Region (OCR), where new launches often try to match the rising resale market through competitive pricing.

These factors collectively influence the decision-making process for both the seasoned investor and the first time condo buyer, balancing the allure of new features against the potential value retention of resale properties. Understanding these elements is key to making an informed purchase in Singapore property market.

The Appeal of New Launch Condos

New launch condos in Singapore continue to attract buyers for several reasons, each contributing to their higher valuation compared to resale units.

i. Why Buyers Still Favour New Launches

• Brand-New Facilities & Smart Home Technology: New condos are equipped with the latest amenities, including state-of-the-art gyms, infinity pools, and smart home features that enhance living comfort and convenience. These modern facilities are a significant draw for buyers looking for an upgraded lifestyle.
• Progressive Payment Scheme (PPS): The progressive payment scheme allows buyers to pay for their new condo in instalments, linked to the construction progress. This payment structure eases the financial burden if you are buying your first home. It also makes new launches more attractive financially compared to the lump sum payments often required in resale transactions.
• Longer Leasehold Tenure: Most new launches in Singapore are either 99-year leasehold or freehold. Buying a new launch means maximizing the tenure, which is appealing to those looking for longevity in their investments.
• Stronger Appreciation Potential: While the initial cost of a new launch might be higher, these properties typically appreciate in value, especially in well-located areas. Developers set phased pricing, which can increase as units are sold, creating an upward trajectory in investment value.

The following table illustrates the phased pricing and appreciation potential of new launches compared to resale condos over the last decade:

Year	Average PSF New Launch	Average PSF Resale	Appreciation Rate New Launch	Appreciation Rate Resale
2014	$1,500	$1,200	–	–
2015	$1,550	$1,225	3.3%	2.1%
2016	$1,600	$1,250	3.2%	2%
2017	$1,750	$1,275	9.4%	2%
2018	$1,900	$1,300	8.6%	2%
2019	$2,100	$1,350	10.5%	3.8%
2020	$2,300	$1,375	9.5%	1.9%
2021	$2,500	$1,400	8.7%	1.8%

ii. The Hidden Costs Of New Launches

Despite the allure, new launches come with their own set of financial considerations. 

• Higher price premium: Customers, especially first time home buyers, often pay a premium for the privilege of living in a brand-new property. This premium is not just for the physical unit but also for the modern amenities and perceived social status.
• Waiting period (construction timeline): One significant drawback is the wait time before moving in. New developments can take anywhere from 3-5 years to complete, during which prices and market conditions can fluctuate significantly.
• Potential quality concerns: Not all developers deliver the promised quality or facilities, which can lead to disputes and dissatisfaction among buyers. That’s why you should consider all aspects and their impact on the new and resale condo before making a decision.

The table below provides a breakdown of the hidden costs associated with new launches:

Cost Type	Description	Estimated Financial Impact
Premium Pricing	Higher psf rate for new amenities and features	10-15% above resale prices
Construction Delays	Delays due to unforeseen circumstances or developer issues	Additional costs in interest or alternate housing
Quality Risks	Risk of lower than advertised quality and finishings	Potential additional renovation costs

Why Resale Condos Are Gaining Traction

Resale condos are becoming an increasingly attractive option for many buyers, primarily due to the immediate benefits they offer and their competitive pricing compared to new launch condo prices.

i. Immediate Occupancy & Rental Income

One of the most significant advantages of purchasing a resale condo is the lack of a waiting period. Buyers can move in immediately or start generating rental income right away, which is particularly appealing to investors and buyers who need housing without delay.

• Move-in ready advantage: Unlike new launches, which may require several years before they are habitable, resale condos are ready for immediate occupation.
• Better rental yields: Since the property is available right away, it can be rented out immediately, providing a steady stream of income, which is an attractive prospect for real estate investors.

The table below highlights the average rental yields for resale condos compared to new launches over recent years:

Year	Resale Condo Rental Yield	New Launch Rental Yield
2019	3.5%	Not applicable due to construction
2020	3.6%	Not applicable due to construction
2021	3.7%	Not applicable due to construction
2022	3.8%	2.8% (for projects that became habitable)
2023	4%	3%

ii. Larger Units For The Same Price

Another reason buyers are leaning towards resale condos is the ability to acquire more spacious units for similar or sometimes even lower prices than smaller new launch units.

• More space for families: Older condos often have larger floor plans, making them ideal for families or those who desire more living space. 
• Better locations at lower prices: Many resale condos are located in established neighbourhoods with developed amenities. This can be more appealing to the first time condo buyer than the developing areas typically associated with new launches.

Here’s how the average price per square foot (psf) compares in terms of size for resale versus new launch condos:

Unit Size (sq ft)	Average PSF Resale	Average PSF New Launch
≤800	$1,200	$1,500
≤1200	$1,100	$1,400
>1200	$1,000	$1,300

iii. Potential Downsides Of Resale Units

While the immediate availability and larger unit sizes are attractive, there are potential drawbacks to consider with resale condos:

• Age & lease decay concerns: Older properties might require more maintenance, and the diminishing lease can affect the asset’s long-term value.
• Renovation & maintenance costs: Depending on the unit’s condition, new owners might need to invest in significant renovations.
• Bank loan & valuation challenges: Financing for older condos and resale leasehold projects can be more complicated, with banks potentially offering lower Loan-to-Value ratios due to the property’s age.

Freehold vs. Leasehold: Another Layer Of Price Difference

The type of property tenure—freehold or leasehold—plays a critical role in determining the price and investment value of a condo in Singapore. In this blog, which can also be seen as first time home buyers guide, we break down the nuances between these two types of tenures and how they affect buyer decisions. 

i. Why Freehold Condos Command A Premium

Freehold properties are often more desirable for buyers looking for long-term investments because they offer perpetual ownership. Here’s why they tend to command a higher market price:

• Scarcity value: Freehold properties are less common than leasehold properties, especially in land-scarce areas like Singapore, adding to their exclusivity and demand.
• Better long-term investment potential: Without the worry of a diminishing lease, freehold properties typically retain value better over an extended period, making them attractive to those looking to pass down assets to future generations.

The following table demonstrates the average price psf difference between freehold and leasehold condos over recent years:

Year	Average PSF Freehold	Average PSF Leasehold
2019	$1,800	$1,500
2020	$1,850	$1,550
2021	$1,900	$1,600
2022	$1,950	$1,650
2023	$2,000	$1,700

ii. Do Leasehold Condos Offer Better ROI?

While freehold properties are excellent for long-term retention, leasehold condos can offer a better return on investment (ROI) under the right circumstances in the Singapore property market:

• Lower upfront costs: Leasehold properties are generally cheaper, which can be beneficial for first-time buyers or investors looking to maximize immediate cash flow.
• Higher rental yields: Due to their lower purchase price, leasehold properties can often yield a higher return relative to their cost.

However, potential buyers should be mindful of the impact of lease decay on value, particularly as the lease drops below the 60-year mark.

Here’s a breakdown of the financial implications of investing in leasehold condos:

Financial Aspect	Freehold	Leasehold
Initial Cost	Higher	Lower
Long-Term Value	Stable	Decreases with Lease Decay
ROI	Lower Percentage	Potentially Higher Percentage

iii. Regional Trends: Where Is The Price Gap Narrowing?

The price gap between new launch and resale properties varies significantly across different regions in Singapore, namely the CCR, the RCR and the OCR. Each area has distinct characteristics that influence condo pricing dynamics.

• Core Central Region: Luxury condos in the CCR still exhibit significant price gaps due to the premium on luxury and exclusivity. Tightened regulations have also somewhat dampened foreign demand, affecting transaction volumes and prices for the seasoned investor and the first time home buyer.
• Rest of Central Region: Resale leasehold projects in city-fringe locations are increasingly competitive, offering closer price points to new launches. They are popular among young professionals and HDB upgraders due to better affordability and proximity to the city centre.
• Outside Central Region: New launch supply in the OCR remains robust, keeping prices competitive. Resale condos are appealing due to larger unit sizes offered at similar price points to smaller new units.

The following table illustrates the price per square foot (PSF) trends across these regions for both new and resale condos:

Region	Property Type	Average PSF (2023)	Notes
CCR	New Launch	$3,000	Premium on luxury and location
CCR	Resale	$2,700
RCR	New Launch	$1,800	Increasingly popular
RCR	Resale	$1,650
OCR	New Launch	$1,500	Competitive pricing
OCR	Resale	$1,350	Larger unit sizes

Interest Rate Trends & Market Forecast For 2025

Interest rates play a pivotal role in the affordability of mortgages, influencing both buyer sentiment and real estate market dynamics. Here, we analyse the potential impact of interest rate trends on condo prices in Singapore.

i. Impact of Interest Rate Cuts On Condo Prices

Recent cuts in interest rates are set to reshape the property market:

• Lower borrowing costs: Reductions in interest rates decrease the cost of obtaining a mortgage, which can encourage more buyers to enter the new launch property market.
• Increased buying power: Lower interest rates increase the buying power of consumers, allowing them to afford more expensive properties or take on larger mortgages without an increase in monthly payments.

The following table highlights the estimated changes in mortgage rates and their potential impact on the market:

Year	Average Mortgage Rate	Impact on Market
2023	2.8%	Stable market conditions
2024	2.5%	Increased buying activity
2025	Projected 2.2%	Further increase in transactions

ii. Will the Price Gap Continue to Narrow?

The future trajectory of the price gap between new launch and resale condos is influenced by multiple factors:

• New supply pipeline: The introduction of new projects can affect market prices, especially if they introduce unique features or competitive pricing.
• Developers’ pricing strategies: Adjustments in how developers price new launches in response to market demand can either widen or narrow the price gap.

When to Consider a New Launch vs. Resale Condo

Choosing between different properties depends on several personal factors and market conditions apart from new launch condo prices and resale condo prices:

• Immediate Needs vs. Future Planning: If immediate occupancy is required, resale condos are preferable. For those planning for future use and can wait for construction to complete, new launches may be more appealing.
• Investment Horizon and Objectives: New launches often attract buyers with longer investment horizons due to the progressive payment schemes and potential for appreciation upon project completion. Resale condos might suit investors looking for rental income or those not willing to wait for construction to complete.
• Financial Situation And Risk Tolerance: New launches typically require a higher initial outlay but may offer higher potential returns. Resale condos might appeal to those with limited cash flow who prefer a lower entry price.

Mortgage Tips For Securing The Best Financing Option In 2025

Navigating the financing landscape for condo purchases can be daunting. Here are a few tips and first time home buyer advice to secure the best mortgage deal:

• Shop Around For Mortgage Rates: Don’t settle for the first financing offer. Compare rates from multiple banks and financial institutions.
• Consider Fixed vs. Floating Rates: Fixed-rate mortgages offer stability in repayments, while floating rates might provide lower initial rates. Choose based on your risk tolerance and financial outlook.
• Evaluate Loan Terms: Beyond the interest rate, consider the flexibility of loan terms, including prepayment penalties and loan tenure, to align with your financial goals.

Final Thoughts

The Singapore condo market is poised for an exciting phase in 2025. The potential for economic recovery, coupled with the impact of various government policies, suggests a dynamic period ahead. Analysts are forecasting a stabilization in condo prices, marked by a gentle upward trajectory in both the new launch and resale segments as demand gradually rebounds.

The enhanced confidence among buyers is expected to fuel this growth, as more individuals feel secure in making significant property investments. This increased activity is likely to support a steady price stabilization and foster a gentle growth across the market.

For potential condo buyers or current homeowners considering refinancing, now is a crucial time to reassess your mortgage options. Engaging with a knowledgeable mortgage broker can provide you with tailored advice that aligns with the latest market trends and your personal financial circumstances.

Get the best home loan Singapore across all major banks and compare mortgage rates with the highest rewards. Enjoy the lowest mortgage loan rates for refinancing home loan or buying a new property!

*The information and publications on this website are not intended to be and do not constitute financial advice from Dollarback Mortgage Pte Ltd.