Buying Condo in Singapore: New Launch Vs Resale Condo

Buying a condo in Singapore is a goal that 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 is for those considering buying a condo in Singapore. We’ll explore the different condo options available, highlight the key differences between New Launch vs Resale Condos, and discuss which type of condo investors typically prefer when looking to invest in Singapore’s property market.

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. Since resale condos are developments that have already been completed, you’ll have the advantage of visiting the actual units and seeing the property in person.

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, are sold by local/foreign private developers, and marketed by real estate marketing agencies such as ERA Realty for sale.

It could take 1 to 5 years for the new launch condo to be built depending on which phase you enter into at, 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

• Difference #2: Choice of Units

• Difference #3: Payment Timeline & Monthly Installments

• Difference #4: Total Interest Paid & Other Costs

• Difference #5: Taxes and MCST Fees

• Difference #6: Renovation Costs & Property Condition

• Difference #7: Years of Lease

• Difference #8: PSF, Size & Quantum

• Difference #9: Floorplan Layout

• Difference #10: Investment Perspective

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.*

*(Once in a blue moon, developers may also give a discount on these leftover units if they are in urgent need to clear their stock so do check with us 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 & Monthly Installments

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 how Progressive Payment works via the image below. 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)	10%	5% - $100,000 cash/cpf + 5% home loan disbursed	$477.42/month for 10 months
Completion of reinforced concrete framework of unit	10%	Another 10% home loan disbursed	Installment cumulates to $1432.26/month for 10 months
Completion of partition walls of unit	5%	Another 5% home loan disbursed	Installment cumulates to $1909.68/month for 3 months
Completion of roofing/ceiling of unit	5%	Another 5% home loan disbursed	Installment cumulates to $2387.1/month for 3 months
Completion of door frames, window frames & plumbing	5%	Another 5% home loan disbursed	Installment cumulates to $2864.52/month for 6 months
Carpark	5%	Another 5% home loan disbursed	Installment cumulates to $3341.94/month for 6 months
TOP (Temporary Occupation Permit) - take keys	25%	Another 25% home loan disbursed	Installment cumulates to $5729.02/month for 1 year
CSC - legal completion	15%	Another 15% home loan disbursed	Installment cumulates to $7161.27/month subsequently

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.

Difference #4: Total Interest Paid & Other Costs

A) New Launch Condo

As new launch condo monthly repayments are based on a progressive payment scheme, the total interest costs payable in the years whilst it is building is significantly lesser as compared to a resale condo.

The reason being the bank only disburses a fraction of the home loan based on the progress of the building construction. For example, the bank may only disburse $100,000 of loan at the first stage of building. Hence, both your monthly instalments and interest costs are significantly lesser; which also means that your CPF/cash outlay will be lesser as compared to a resale condo over the course of construction.

Using the same example as above, 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:

Source: ERA

You will realize that the total amount of interest that you would have paid over a course of 4 years will only be $48,140 for a $1.5 million loan.

If you intend to rent while waiting for the new launch condo to TOP, you may then add in your rental costs for example $3500 x 48 months = $168,000.

So your total costs will be $48,140+ $168,000 = $216,140 over a course of 4 years.

B) Resale Condo

For a resale condo, the full 75% loan will be disbursed the moment your purchase transaction reaches completion. Therefore, you will be paying the full monthly instalment immediately once it reaches completion. The total amount of interest payable will be applied on the full loan amount as well.

Using the same example as above, 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:

Source: ERA

As the full monthly installment is payable upon reaching completion, the total amount of interest payable will generally be much higher for a resale condo. Over a course of 4 years, your total interest costs payable will be $231,442.

Adding in an estimated renovation cost of $100,000 and 48 months of MCST fees payable at $300/month, you will be looking at a total cost of $345,842. At this point, you may realize that a new launch condo does not have MCST fees which then brings me to my next point:

Difference #5: Taxes and MCST Fees

A) New Launch Condo

As a new launch condo has not been built yet, there will be no MCST fees payable during its building stages. Property taxes will not be applicable as well.

B) Resale Condo

For resale condo buyers, your MCST payment kickstarts the moment your purchase reaches completion. MCST fees are typically collected in quarterly amounts. For example if your unit’s MCST is $400/month, you will have to pay $1200 to your MCST upfront.

There will also be property tax payable yearly; either based on owner-occupied or non-owner occupied rates. Non-owner occupied rates refer to the scenario where you will be renting the condo out.

Difference #6: Renovation Costs & Property Condition

A) New Launch Condo

As new launch condo are brand new developments, they are typically of move-in condition once the condo reaches TOP (Temporary Occupation Permit) and require lesser renovation costs.

The developer also provides a 1-year warranty to all the fittings that they have provided such as the newly renovated bathroom, kitchen with appliances, flooring, and air-conditioning units. You can also have the developer rectify any defects that you may spot in this 1 year.

With a new launch condo, you'll enjoy brand new facilities, including a swimming pool, communal areas, tennis courts, and, in some cases, smart home features integrated into both the units and the facilities. These condos are designed to meet the needs of modern-day living.

b. Resale Condo

Since resale condos are sold by the current owners in the secondary market, the condition of the unit depends on its age and how well the previous owner has maintained it. If the unit was rented out, it may not be in ideal condition, so it’s important to keep this in mind when considering a resale condo.

The typical amount to allocate for renovations for a resale condo could range anywhere from between $50,000 to $300,000 depending on the size, condition and the extent of the renovations that you wish to do. Older condo resale condo units may also carry with them plumbing or structural issues, so do be sure to check properly first as this may incidentally add on to your renovation costs.

Should you be lucky and find a resale condo that has an interior design that fits your taste to a tee, then you will be able to save a lot more on your renovation costs. Else, you may have to allocate extra for hacking costs before being able to incorporate the interior design style that you prefer.

When it comes to facilities, older developments may have facilities that show signs of wear and tear over the years, which could impact their condition. Additionally, there have been cases where relatively young resale condo developments have suffered from poor maintenance by the MCST, leading to faster deterioration. These factors can influence both rental demand and future resale value, so it’s important to keep an eye on them.

Difference #7: Years of Lease

A) New Launch Condo

As new launch condo are brand new developments, they come with a fresh new lease of 99 years.

B) Resale Condo

As resale condo are on the secondary market, their remaining lease will be dependent on the year that the land was bought. For freehold resale condo, there will be no remaining lease but do take note of the overall condition of the development to ensure that there will still be appeal/demand when you are trying to rent it out or resell it in future.

Difference #8: PSF, Size & Quantum

New Launch Condo vs Resale Condo

Generally, new launch condos tend to be smaller compared to older resale condo developments. This is due to Singapore's limited land availability, which has become more constrained over the years.

The price per square foot (PSF) for new launch condos is typically higher compared to resale condos. This is due to the higher costs of land acquired by developers through Government Land Sales (GLS) or from en bloc owners, as well as the benefit of a fresh 99-year lease.

However, the overall quantum for a new launch condo may or may not be higher than a resale condo. This depends on factors such as the age, size, and location of the resale condo.

This is what we mean as an example:

Formula: Size (sqft) x PSF = Quantum ($)

An older resale 2 bedroom condo

1200sqft (Size) x 2200 (PSF) = $2,640,000

Vs a new launch 2 bedroom condo

700sqft (Size) x 2800 (PSF) = $1,960,000

As land prices continue to rise, resulting in higher PSF, developers often opt to build smaller homes in order to keep the overall quantum more affordable. Based on a psf of 2800, should the 2 bedroom still be at a size of 1200 sqft like in the older days; the overall quantum will already translate to an amount of $3.36 million which can be out of reach for the majority of home buyers.

As the psf cannot be changed due to the land cost prices, the developers can only build smaller but more efficient home to keep the entry prices affordable.

And instead of marketing 1200sqft properties as a 2 bedroom in this modern day; what the developers have done would be to add an extra room into this 1200sqft and market it as a 3 bedroom instead, as most home buyers require rooms more than size.

Difference #9: Floorplan Layout

New Launch Condo vs Resale Condo

New launch condo developments are typically now of standard layouts due to the developers using Pre-Fabricated Prefinished Volumetric Construction (PPVC).* This means that every unit is construed in an off-site fabrication facility, which also includes doing up the internal finishes, fixtures, and fittings in the unit beforehand. These completed units are then delivered to the actual site, and stacked on top of each other like Lego pieces.

The reason why most developers are using PPVC now is because it is more efficient and takes a shorter amount of lead time to construct the whole condo. Off-site fabrication also means lesser dust and noise pollution. Production in a controlled factory environment will also allow developers to produce higher quality products.

Therefore, this is why you will realize that most new launch condo layouts are similar these days. Another interesting to take note is also the fact that new launch condo layouts though smaller but are much more space-efficient these days. What we mean by this is because in the older days, most resale condo developments may come with planter boxes and bay windows. These spaces are typically under-utilized but are included in your sqft count.

Therefore, do take note to account for the sqft that these planter boxes and bay windows take up, minus it off from the overall sqft; and you will get your actual usable space and sqft.

Some resale condo developments may also have irregular layouts and are not a typical square or rectangle, so be sure to be comfortable with that. But the good thing about resale condo developments will be that you are allowed to hack walls as they are not built in the PPVC model back in the days. This may then allow you to have more flexibility in terms of your interior design ideas.

*(Note – some selected new launch condo developments may not be using PPVC and walls could be hackable too. Do clarify with a trusted property agent if you need to.)

Difference #10: Investment Perspective

A) New Launch Condo

How developers price their units is based on their cost price which is made up of land price + construction/labour costs + construction loan interest costs + marketing costs + profit margin = selling price.

You may commonly hear developers offering early-bird or VVIP discounts to early buyers that attend the showflat preview when the new launch condo is first launched.

This holds true for majority of new launch condo launches as developers tend to want to have a good sales performance on the launch day in order to gain news publicity and attract more interest in their developments subsequently.

Therefore, their profit margins are typically the thinnest on the launch day.

We’ve seen firsthand how developers typically raise their prices by 3% to 5% per year in the 4 to 5 years following a launch, and even more as the new launch condo nears its TOP (Temporary Occupation Permit).

This creates an opportunity for buyers to enter at the lowest prices, as later phases of buyers—who may be your direct neighbors—will likely pay a higher price or PSF due to these price increases over time.

As an early buyer, you stand to make a "paper gain" on your unit, benefiting from the first-mover advantage. Being among the first wave of buyers also gives you the priority to choose your preferred units in terms of level and facing. However, do note that balloting is required during the showflat preview.

For those purchasing new launch condos for investment, many tend to sell their units once the 3-year Seller Stamp Duty (SSD) period ends, typically before the condo reaches its TOP. However, most investors choose to sell at TOP, as resale buyers will have the opportunity to view the actual unit and won’t have to wait for the property to be completed. As a result, they’re often willing to pay a premium for these new homes.

At the TOP stage, investors who bought for capital gains usually aim to sell at a targeted PSF, driving prices upward.

Finally, some buyers may decide to move into the new launch condo themselves or rent it out for rental yield after enjoying capital appreciation. If the new launch condo is strategically located, it can continue to provide strong returns in the long run.

Do reach out to us directly if you would like to know what are the available options in the new launch condo market.

B) Resale Condo

Resale sellers’ pricing strategies differ significantly from those of developers, as they are largely influenced by the individual seller’s appetite, market conditions, and the pricing of nearby units.

As a result, resale condo units may come with Cash Over Valuation (COV), as some sellers may not set realistic prices. COV can easily exceed your budget and may cost you more than expected.

Paying above valuation means paying a premium—more than what the unit is truly worth. This puts you at a disadvantage compared to earlier buyers in the same development, who will likely have a greater profit margin to work with.

That said, there are still opportunities to find fairly valued or even undervalued resale units, particularly from serious or urgent sellers. However, these are often harder to find and may not align with your timeline.

One of the advantages of buying a resale condo is the ability to start generating rental income almost immediately. Rental income tends to be more predictable, as you can base your expectations on recent rental transactions and volume. However, do keep in mind that you will need to account for potential vacancy periods during off-peak seasons, as well as costs for furniture, repairs, MCST fees, property tax, and agent commissions.

With resale condos, past transactional data allows you to make more informed predictions about future pricing trends. You can evaluate whether the property’s past performance has been stable, appreciating, or declining.

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In conclusion, both new launch and resale condos offer unique opportunities, and the right choice depends on your goals, timeline, and preferences. New launch condos offer the potential for capital appreciation, modern facilities, and a fresh start, while resale condos can provide immediate rental income and a more predictable pricing structure.

Whether you're looking for a property to live in or an investment, understanding the advantages and trade-offs of both options will help you make an informed decision.

Ultimately, choosing between a new launch or resale condo comes down to your unique situation, financial readiness, and market conditions. It’s always important to stay updated with market trends and seek professional guidance to navigate your options effectively.

If you need assistance in choosing the right condo for your needs, feel free to reach out to us. We’re here to help you make the best decision for your property journey.

**Note - No commission is payable should you decide to engage us to help you with purchasing a new launch executive condo (EC), resale executive condo (EC), a new launch condo or a resale condo.

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