Buying Condo in Singapore: New Launch Vs Resale Condo
Buying a condo in Singapore is what many Singaporeans aspire to achieve be it for a better lifestyle, a higher status symbol or simply to enjoy better capital appreciation as compared to public housing in Singapore.
Today’s article topic is for those who are looking at buying a condo in Singapore, understanding the condo options that are available for you to choose from, the main differences between them – New Launch vs Resale Condo, and which type of condo investors typically look at when buying a condo in Singapore for investment.
Just to give you an idea of how much prices have escalated over the years for a condo in Singapore: Back in 2016, a new launch 1 bedroom condo in the Outside Central Region (OCR) only costs S$400,000 to $500,000 on average. Now in 2023, a new launch 1 bedroom condo in the OCR easily costs about $1,000,000 to $1,200,000.
Nonetheless, those whom have bought previously or are planning on buying a condo in Singapore today are still in a good position to plan for retirement through real estate, given how property prices are still set to grow in the long run in Singapore.
2 Types of Condo in Singapore
1st Type of Condo in Singapore: Resale Condo
Buying a resale condo in Singapore means that you are buying from a direct owner in the secondary market or in other words, second-hand units. But buying a resale condo does not signify that you will be the second owner as there could a possibility of the unit having changed hands 3 to 5 times.
You will be able to find these resale condo units available for sale on property portals such as PropertyGuru, 99.co etc. As resale condo are condo developments that have already been built, you will be able to visit the actual units and see the actual physical thing.
2nd Type of Condo in Singapore: New Launch Condo
Buying a new launch condo in Singapore means that you are buying directly from the primary market – from the developers themselves. New launch condo are condo developments that have not been built yet, sold by local/foreign private developers, and marketed by real estate marketing agencies such as ERA and Propnex etc. for sale.
It could take 1 to 5 years for the new launch condo to be built depending on which phase you enter, as some new launch condo developments may have already started their sales a few years back.
As the building has not been built yet, the developers will build a show flat/showroom to help buyers visualize how the condo will look in future coupled with a few showroom units to showcase certain bedroom types, and the choice of fittings that will eventually be used in your actual unit.
10 Main Differences Between New Launch Vs Resale Condo
Difference #1: Move-in Date
A) New Launch Condo
For new launch condo developments, there are a few types. The first type are those that you buy at the very initial launch phase (which also requires balloting usually). These will typically take 4 to 5 years to be built.
The second type are those that you buy after the initial launch phase which will likely lessen the amount of wait time to 1 to 3 years instead. But do note that the developers would most likely have increased the prices slightly for this phase of buyers.
The third type are new launch condo developments that have met TOP (Temporary Occupation Period) already, but the developer still has unsold units and are ready for you to move-in immediately. However, do take note that these units are usually priced the highest as compared to the first 2 phases, given a no-wait time plus you get a brand-new unit.*
*(Sometimes, developers may also give a discount on these units if they would like to clear their stock so do check with your property agent on such available units).
B) Resale Condo
For resale condo, the usual transaction waiting time would be 14 weeks from when you place an option (deposit) on the unit before you would obtain your keys to the unit. However, as this is a private treaty arrangement with the seller, we have also seen contracts that go up to 6 months or longer for the total transaction time. Sellers may also request for a free 3 months extension stay even after you obtained the ownership rights to the unit.
Difference #2: Choice of Units
A) New Launch Condo
New launch condo developments typically have a wider range and variety of units for you to choose from. There could be a few floor plan variations for a bedroom type (e.g., 2-bedroom, 2-bedroom + study. 3-bedroom compact, 3-bedroom deluxe, 3-bedroom premium etc.) You can also get to choose your preferred balcony orientation facing and the level that you prefer, if they have not been sold yet.
B) Resale Condo
For resale condo, it really depends on what units are listed on property portals for sale. There could be limited options for you to choose from as not every owner could be looking to sell now. Therefore, what you see is what you get as per the units available. On average, there are usually approximately 1 to 3 units on sale per resale condo development.
Difference #3: Payment Timeline
A) New Launch Condo
The initial downpayment for a new launch condo is 5% cash whereby the Option to Purchase (OTP) will be issued to you. Subsequently, the developer will send a Sales & Purchase agreement to your law firm in the next 2 weeks, in which you will be required to exercise the Sales & Purchase agreement within 3 weeks’ time upon receiving it.
Thereafter, you will be required to pay your stamp duties and additional buyer stamp duties (if any) within the next 2 weeks from when you have exercised the Sales & Purchase agreement. 1 week later on, you will then be required to pay another 15% downpayment via either cash or CPF.
The total downpayment till date is at 20% right now, but there is still another 5% more payable by cash or CPF as the maximum bank loan is only 75%. This 5% will subsequently be deducted when foundation work of the construction begins. This could potentially be 6 months to 1 year later, depending on the construction progress.
Thereafter, your monthly instalment repayments will run on a scheme termed as Progressive Payment over the next 4 to 5 years. This means that your monthly instalments are progressive and cumulative, following the progress of the building construction. It could start in the hundreds, before accumulating to the thousands range. Each construction phase typically lasts between 3 to 9 months.
We shall further illustrate the above via the image below from the downpayment to the monthly instalment progressive repayment. Here's assuming a Singapore Citizen purchasing a new launch condo (first property) with a $2 million purchase price, a 1.5 million loan amount at 30 years loan tenure and 4% interest rate:
Progress | Payment Milestones | Payment Amount | Monthly Installment |
|---|---|---|---|
Option to purchase | 5% | $100,000 cash | - |
Receive S&P from developer within 2 weeks from OTP | - | - | - |
3 weeks to exercise S&P | - | - | - |
Pay BSD within 2 weeks from S&P exercise date | - | 69,600 cash/cpf | - |
Pay remaining 15% 1 week after BSD | 15% | $300,000 cash/cpf | - |
Completion of foundation work (6 months - 1 year later on) | 10% | 5% - $100,000 cash/cpf + 5% home loan disbursed | $477.42/month |
Completion of reinforced concrete framework of unit | 10% | Another 10% home loan disbursed | Installment cumulates to $1432.26/month |
Completion of partition walls of unit | 5% | Another 5% home loan disbursed | Installment cumulates to $1909.68/month |
Completion of roofing/ceiling of unit | 5% | Another 5% home loan disbursed | Installment cumulates to $2387.1/month |
Completion of door frames, window frames & plumbing | 5% | Another 5% home loan disbursed | Installment cumulates to $2864.52/month |
Carpark | 5% | Another 5% home loan disbursed | Installment cumulates to $3341.94/month |
TOP (Temporary Occupation Permit) - take keys | 25% | Another 25% home loan disbursed | Installment cumulates to $5729.02/month |
CSC - legal completion | 15% | Another 15% home loan disbursed | Installment cumulates to $7161.27/month |
b. Resale Condo
For resale condo purchases, you will be required to pay the 5% cash downpayment first, followed by the Buyer Stamp Duty (BSD) and/or Additional Buyer Stamp Duty (ABSD) if any; once you have exercised your Option to Purchase (OTP).
Subsequently once you have reached completion, you will then have to pay 20% of downpayment from your CPF OA or cash. Full instalment kicks in once you have reached completion. As we have mentioned previously, the whole timeline is usually about 14 weeks from when you have placed the initial deposit of 1% for your OTP.
