New launch or resale unit? Here’s a guide for homebuyers

[SINGAPORE] Prospective homebuyers in Singapore often grapple with the choice between a pricier new condominium apartment or a more affordable resale unit.

Some property agents, along with well-meaning family and friends, point them to the primary market for supposedly stronger investment potential. 

But data crunched by property players for The Business Times suggests the opposite is often true.

Resale properties frequently earn higher returns when sold again, owing to their lower base price compared with the large sums that new launches often fetch.

Homeowners may thus have to ask: Is a brand-new buy really worth it? Here’s a guide for those deciding between a new launch and a resale property.

Which option delivers better investment returns and capital growth?

Over the past three decades, resales have consistently been more profitable than new non-landed private homes.

New private homes notched a historical median annualised return of 2.7 per cent on the market, compared with 3.7 per cent for resale units that changed hands again, statistics compiled by real estate researcher Vairavan Shanmugam show.

Vairavan, a doctoral student who was formerly a data insights specialist at proptech firm Ohmyhome, studied more than 630,000 transactions from 1995 to June 2026, focusing on purchases and subsequent resales with a minimum holding period of three years.

Why do new launches yield lower returns compared to resale units?

The primary reason is the heavy initial price premium built into new builds.

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Many happy returns for resale homes

Over the past five years, new homes in the Core Central Region (CCR) sold for 41 per cent more than resale units on a per-square-foot basis.

High developer land acquisition costs, construction costs, and heavy marketing expenses push entry prices up.

Are prime locations safer for new builds?

According to Vairavan’s research, about 28 per cent of new sales in the CCR made losses over the past decade, compared with 14.9 per cent for resales in the same period. 

New launches in the CCR notched losses between 22.4 and 35.6 per cent in that period, and were not confined to a few bad years.

How do property size and lease age impact the decision?

The resale advantage reflects differences in size, tenure and location. 

In fact, average returns on new-sale homes in the past two years surpassed resale returns for leasehold units larger than 1,500 sq ft in size.

But for properties between 700 and 1,000 sq ft, resales still posted materially stronger returns, commanding a premium of as much as 12.4 percentage points.

Notably, older leasehold resales still had an edge over new homes, albeit a narrower one. Properties with less than 70 years left on their lease in 2021 recorded a median return of 23.7 per cent, compared with 17 per cent for new-sales.

What advantages do new launches offer if resale homes provide better returns?

The market could be moving towards a point where many buyers are consciously paying for consumption value and lifestyle preferences rather than maximising returns.

Key advantages of buying new include modern amenities, lower initial maintenance, defect-liability coverage, brand-new finishes, and a progressive payment scheme that eases upfront cash flow during construction.

For a more in-depth look into this topic and data sources, read: Many happy returns for resale homes