New Launch vs. Resale: Finding the Best Property Investment in Singapore’s Real Estate Market as 2024 Closes
As we enter the final stretch of 2024, the Singapore property market continues to present investment opportunities in both new launches and resale properties. With over 12,800 new homes expected by year-end and resale transactions projected to increase, the choice between buying a new launch or opting for a resale unit has become pivotal. As cooling measures, evolving policies, and fluctuating interest rates influence buyer decisions, it’s essential to find the best strategy to meet investment goals.
1. Singapore’s Property Market in Q4 2024: An Overview
The Singapore property market trends in Q4 2024 remain heavily influenced by government policies, fluctuating interest rates, and new Additional Buyer’s Stamp Duty (ABSD) hikes. The anticipated supply of completed properties is another key factor shaping property investment decisions. These market conditions affect both new launches and resale properties, offering unique opportunities and advantages depending on the buyer’s profile and financial situation.
With over 40 new projects planned for launch in 2024, the market is expected to see an estimated addition of 12,800 new homes by the end of the year. Meanwhile, resale transactions are forecasted to rise, with estimates projecting 13,000 to 14,000 deals by year-end (Source: EdgeProp SG).
Current Market Factors in Singapore’s Real Estate Market
Interest Rates: As of Q4 2024, the Singapore Interbank Offered Rate (SIBOR) stands at around 3.5%, significantly affecting borrowing costs for local buyers and investors.
However, the cost of borrowing is beginning to decline, potentially creating a surge in demand over the next two years. This trend could drive up property prices, similar to the low-interest environment experienced during the COVID-19 period.
Cooling Measures: The 2023 Additional Buyer’s Stamp Duty (ABSD) hike continues to impact the market, especially foreign investors, who now face a 60% ABSD rate for properties. This policy aims to stabilise demand and manage property affordability.
Demand Shifts: Investors are increasingly drawn to new property launches in the Rest of Central Region (RCR) and Outside Central Region (OCR), where property prices tend to be more competitive. These areas offer strong investment potential and appeal to those seeking value outside the Core Central Region (CCR).
2. New Launch vs. Resale Condos: Price Comparison in Singapore’s Property Market (Q4 2024)
New Launch Prices in Q4 2024
New property launches in Singapore continue to draw attention, especially in the OCR, where developments such as Hillhaven, The Myst, SORA, Norwood Grand, and Kassia have sparked significant interest. Norwood Grand, in particular, saw an impressive 84% sell-through rate on its launch day, with all one-, two-, and three-bedroom units fully sold. This high demand underscores the strong buying interest in Singapore’s property market.
Property prices in the OCR have risen to exceed $2,200 psf, placing the cost of a typical three-bedroom unit at around $2 million. These new developments offer advanced amenities and are strategically located near transportation hubs, making them attractive options for HDB upgraders and investors aiming for long-term property appreciation.
Another notable development, Chuan Park, is located near Lorong Chuan MRT in the OCR. During its launch weekend, 77% of the 916 units were sold at an impressive average price of $2,578 psf. With modern amenities and proximity to top schools, Chuan Park’s 916 private units are especially appealing to families seeking convenience and quality living, adding further value to Singapore’s real estate landscape.
Resale Property Prices in Singapore
Resale condominiums in Singapore continue to present a more affordable option, particularly in popular areas like District 15, where the average price per square foot (psf) is around $1,751. This is notably lower than the average new sale price, which stands at approximately $2,723 psf. Resale condos attract buyers seeking immediate occupancy and larger living spaces, offering significant advantages over new developments.
For HDB upgraders in 2024, resale condos in mature estates across Singapore provide a convenient option with lower upfront costs, catering to those with a preference for established neighbourhoods and quicker move-in timelines.
3. Which is More Profitable: New Launch vs Resale Property Investment in Singapore?
New Launch Profitability
Investing in new launches often results in attractive returns, particularly for early buyers who purchase during pre-launch phases. On average, early buyers of new launches may see returns around 16% upon selling after the Temporary Occupation Permit (TOP) is issued, though returns vary by project and market conditions. Projects like Emerald of Katong (EOK) and Chuan Park are expected to attract both homeowners and investors due to their strategic locations in highly sought-after districts.
Resale Property Profitability
Resale properties, particularly in the RCR or District 15, have shown stable and consistent returns over time. On average, resale-to-resale transactions yield around 10% profitability. For investors looking to start generating immediate rental income, resale properties provide a faster return on investment compared to waiting for a new launch property to complete.
4. Financing and Affordability Considerations for New Launch vs Resale Properties in Singapore
Financing a new launch often requires a significant upfront commitment. For a $2 million new launch condo, such as a unit in Emerald of Katong (EOK), buyers will need to budget for monthly repayments of approximately $7,126, assuming a 4% interest rate over 25 years. To qualify under Singapore’s Total Debt Servicing Ratio (TDSR), a household income of $14,000 per month would be required.
In contrast, resale properties offer more affordability. With prices ranging between $1.4 million to $1.6 million, resale condos in areas like District 19 allow buyers more flexibility, smaller down payments, and fewer financing challenges.
5. Impact of Government Policies and ABSD on Property Investment in Singapore (2024)
The 2023 ABSD hike significantly impacted the property market, particularly for foreign buyers. With 60% ABSD now applied to foreigners buying properties in Singapore, demand for high-end new launches has slowed considerably. This has led to a shift in interest toward properties in the RCR and OCR, where the property prices are more affordable.
Future Predictions:
According to CBRE, property prices in the OCR are expected to stabilise in 2025, with new BTO projects and additional supply potentially easing demand pressures in the mid-tier condo market.
6. Real-Life Scenarios: New Launch vs Resale Properties in Singapore
Scenario 1: HDB Upgraders Choosing New Launches
A family upgrading from an HDB flat may be drawn to new launch projects like Emerald of Katong (EOK), which offer modern designs and convenient access to transportation hubs. Buyers should, however, be prepared for a 2-3 year wait for completion. Additionally, new launches typically come with higher price tags, leading to stricter financing requirements. On the upside, the progressive payment scheme provides upfront cash flow flexibility and can reduce interest payments, especially as interest rates are expected to taper down over the next two years.
Scenario 2: Investors Choosing Resale Properties
An international investor exploring Singapore’s luxury condo market was initially interested in a new launch in Marina Bay. However, the 60% ABSD made it less financially viable. Instead, he opted for a resale unit in the RCR, allowing him to avoid the waiting period associated with new launches and start generating rental income immediately.
While the ABSD still applied to the resale purchase, the lower purchase price in the RCR made it a more financially viable option for rental yield and potential appreciation.
Conclusion: New Launch or Resale – Which Property Investment is Best in Singapore?
As we close out 2024, the decision between new launch and resale properties depends on your financial goals, investment horizon, and personal preferences.
For first-time homebuyers on a budget, new BTO flats in non-mature estates offer excellent affordability, especially with government grants. For families upgrading from HDB flats or those seeking immediate rental income, resale condos in mature districts like District 15 offer faster returns and are less impacted by cooling measures.
Key Takeaways:
New Launches: These properties are ideal for those looking for state-of-the-art amenities and potential for value growth but require a longer waiting period and higher initial investment.
Resale Properties: Resale properties in popular districts like District 15 offer affordability, immediate move-in readiness, and proven returns, making them a preferred choice for those seeking established neighbourhoods and quicker occupancy.
Not sure what’s best for you? Contact Zach Lin below or via whatsapp for a non-obligatory consultation.
