New Launch vs Resale Condos In 2024: Which To Buy?
The property market has seen some notable changes over the year; but one of the more obvious differences is the price gap between new launch and resale condos. With new launches now at around $2,000 psf, an increasing number of buyers – including HDB upgraders – are starting to feel priced out. But how wide is the gap between new and resale right now, and what are some of the other factors to consider when choosing?
New Launch Condo Prices In 2024
New Launch Condos in CCR
We’ll begin with new launch condos in the CCR:
New launch prices averaged $3,007 psf in January last year, rising to $3,168 psf as of January this year. Notice, however, there’s a sharp drop in the number of new launch transactions; largely due to the number of available launches, but also possibly due to new cooling measures (see below).
New Launch Condos in RCR
Next let’s look at the RCR:
Prices averaged $2,601 psf in January of last year, dipping slightly to $2,568 psf in January this year. The transaction spikes in the middle of last year were mainly due to three major launches all happening in District 15 (Grand Dunman, Tembusu Grand, and The Continuum).
New Launch Condos in OCR
Next, let’s look at the OCR.
The OCR saw a strong pick-up in price over last year, rising from an average of $1,775 psf, to $2,019 psf. This is not entirely unexpected, since the OCR is where the bulk of homeowner transactions (mostly HDB upgraders) see the most demand.
Do You Notice A Common Factor In All Three Regions?
At this point, the average price of a new launch is now over $2,000 psf in all three regions. It’s now an inescapable fact that for family-sized units (typically three-bedders of at least 900 sq. ft.), the typical quantum for a new launch condo is around $1.8 million.
If we consider a 25-year home loan at the maximum loan quantum (75% of the price), monthly loan repayments (at 4% per annum) come to $7,126 per month. This means that, to meet the TDSR, which restricts monthly loan repayments to 55% of your combined income, the borrowers may need to earn close to $14,000 per month (unless they can make a bigger down payment).
Also keep in mind that 900 sq. ft. is smaller than the average 4-room flat, so those with bigger families may face a quantum of $2 million or more. This is all, quite frankly, well past comfortable territory for many median-income Singaporeans.
Resale Condo Prices in 2024
Resale Condo Prices In CCR
We’ll start with the resale prices in the CCR:
Prices in the CCR have been mostly flat over the year – they were at $2,309 psf in January 2023, and are at $2,312 psf now. I actually expect more of this muted performance in the near term, for reasons I’ll cover below.
Resale Condo Prices in RCR
Resale prices in the RCR are trending upward, from $1,747 psf in January last year, to $1,868 psf this year. As a matter of opinion, this could trend further upward if we see issues in the wider economy (e.g., further impact from the war in Europe and in Gaza). This is because, when companies cut costs and shrink expatriate housing allowances, we sometimes see an exodus from the CCR into the more affordable RCR properties; this might prompt investors to buy within the city fringe instead.
That said, it will boil down to whether investors are still interested in rental assets in more prime areas, given the higher ABSD rates today.
Resale Condo Prices in OCR
Now let’s look in the most segment: resale condos in the OCR are the bread-and-butter of the homeowner market in Singapore; especially given that new launches are increasingly out of reach:
It’s relatively happy news for home buyers.
Prices have risen from $1,340 psf in January last year, to $1,410 psf this year; but an increase of just over 5% is at least tolerable to most. The really good news for buyers is that, as of November 2023, we can see the average price has been sliding.
With the exception of the CCR, average resale prices in the RCR and OCR have stayed below the $2,000 psf mark; and it’s still quite possible to find resale units in the $1.4 million to $1.6 million range. This is generally comfortable for HDB upgraders, if not first time buyers, so I would expect the bulk of transactions to be in these resale segments going forward.
What’s Happening In The CCR?
One of the key factors in the CCR is the impact of last year’s cooling measures.
As of April 2023, the ABSD on foreigners was doubled to 60%. This is not a huge issue for the OCR, as few foreigners buy there anyway – but the CCR will likely bear the brunt of this going forward, as this region has the biggest number of foreign buyers.
If there are buyers in the CCR this coming year, I expect it will mainly come to buyers seizing upon the narrowing price gap between the RCR and CCR.
Within the RCR, there is (speculative) hope that the cooling measures will push buyers from the CCR into the relatively cheaper city fringe. In any case, I also expect that the launches of Grand Dunman, Tembusu Grand, and The Continuum so close together will have a knock-on effect on surrounding resale homes; this could lead to District 15 bumping up the regional average.
Harmonisation of Gross Floor Area
Another factor to consider are the changes to the definition of Gross Floor Area (GFA), which would apply to the new launches we’re seeing now.
As of June 2023, the government is standardising the definitions of Gross Floor Area (GFA) across regulatory bodies. This also has an impact on new launches though.
Several of the methods used to maximise prices in the past, such as building extra large air-con ledges, or charging for “empty air” between the floor and ceiling (strata void space) are no longer allowed. Previously, developers were able to charge buyers for the square footage of these features, even though they themselves were not charged for it.
The impact on price is not yet known to us – it could go in two different ways. On the one hand, it may result in more space for the amount you pay. On the other hand, developers may simply raise prices, to make up for the inability to use these methods. As such, I would say it may not affect the prices; but there’s a clear win in that you’re buying actual square footage you can use.
This would be a significant advantage for new launch buyers, compared to less space-efficient resale units. No one really wants to pay several thousand dollars for planter boxes they don’t use, even if the overall price may be lower.
Conclusions On New Launch vs Resale Condos in 2024
- For those upgrading from 3-room or 4-room flats, or on a budget, new launches may be an uncomfortable stretch at this point. Executive Condominiums (ECs), or a resale unit in the OCR, are probably more sensible (and you can upgrade further from those in future, if you like)
- For buyers with a bigger budget, it may be worth keeping an eye on new launches in the CCR, if developers get nervous about the ABSD and are more modest with prices. Alternatively, you might look to the RCR, and try to take advantage of narrowing prices with the CCR.
- For singles and couples (no children) who are buying smaller, low quantum units, it may be worth looking at new launches. This is because the lower overall quantum might still make the units affordable, and the more efficient layouts of newer condos are even more important, when you’re buying a compact unit.
For more personalised assistance or further questions, do reach out to me directly and I’ll be glad to help.
Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.
Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.
Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.
Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.
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