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Should I Buy a Resale or New Condo
We often get asked by clients about the investment considerations they should keep in mind when deciding between slightly older resale condos and new condominium buildings.
Typically, investors fall into two camps: first, some investors aren’t concerned with yield and appreciate the asset, holding onto it in anticipation of appreciation; second, other investors prioritise yield and purchase the asset at the right price.
These investors also value how the asset integrates into the fabric of Singapore, e.g. urban redevelopment. For them, it’s less about personal excitement and more about the asset yield, monthly costs, and whether the investment is easier to carry in the long term in slowdowns or downturns.
Many of our clients rent out these apartments to foreigners working here temporarily. We also find that most new developments in less exceptional locations peak in value, or the developer’s finishes are less on-trend, leading to a need to renovate, especially if you’re aiming for a shorter-term investment strategy. So, different purchase considerations are important.
These nuances are essential to pay attention to when buying a brand-new product — unless the property is in an incredible neighbourhood like Nassim Road, Ardmore Park or Bukit Timah. It doesn’t matter then because it will almost always sell.
Do Condos Have Good Resale Value?
Which is the better investment: a new versus resale condo in Singapore? Each has its advantages, and when representing our investor-buyer clients, the split between buying new or resale units comes down to understanding our client’s financial goals and what we recommend.
New condominiums refer to buying before or during construction. Everything is brand new when the buyer closes and takes over the property. Resale refers to buying an existing condo from an individual seller, who may be the second, third, or fifth owner, depending on the age of the condominium.
Resale condos are generally less expensive per square foot than new condos in the same neighbourhood with similar amenities. This price difference isn’t due to resale condos deliberately selling for less. Instead, it reflects that new condos must cover higher development and land acquisition costs. Additionally, inflation means that properties developed later will naturally cost more than those built earlier due to the general price increase over time.
Buyers typically have more negotiability with a resale. With resale, the buyer deals with an individual seller, so the flexibility is much higher. New condos are less negotiable because the developer needs to meet financial commitments with the bank, and investors are involved.
A resale condominium allows you to predict rental income more accurately based on current or past tenants’ pay. These are easily viewed from public websites. For example, the buyer can know there are only a few condos for resale in the 275-unit building; this shows that the demand for the building is likely very high. Or, that rent per square foot is $7.43 when competitors rent at $6.13 per square foot.
Resale condos tend to appreciate steadily in value and offer a solid return on investment — but they come with their share of drawbacks, too. The buyer knows how the building has been performing over the years regarding appreciation trends, rental demand, rent and sale prices, etc.
As such, you can make a more informed choice of whether the resale condominium will be worth investing in.
Advantages of Buying a Resale Condo
One of the primary advantages of buying a resale condo is its immediate availability — think instant gratification in a world of taps and swipes. Once the purchase is completed, you can move in immediately, unlike with new developments that may require construction to finish. This is a significant benefit for buyers who need to relocate quickly.
Unlike new developments where buyers might only see showrooms or architectural drawings, purchasing a resale condo allows you to inspect the actual unit. This direct assessment lets you evaluate the true condition and layout of the property, aiding in a more informed decision-making process about whether it suits your needs and lifestyle.
The community dynamics, such as the demographics of residents (e.g., families, elderly, singles), noise levels, and overall ambiance, can be assessed in a well-established freehold resale condo. This feature enables potential buyers to better gauge if they would feel comfortable and enjoy living in the environment.
Also, resale condos are often located in neighbourhoods with mature amenities such as schools, parks, shopping centres and public transport systems. This can provide a better quality of life and convenience compared to newer developments that might still be building their infrastructure.
Another advantage of a resale condo is that the buyer will know the condo building’s financials and history of repairs, litigation, and damages, all of which give the buyer a clearer understanding of the condo building.
For example, the building’s financial reserves of the Management Corporation (MCST) show how much financial cushion the building has available for maintenance and unexpected repairs, helping to predict potential future assessments. This documentation provides insights into the building’s upkeep and can indicate the likelihood of future repairs and associated costs.
Information about any past or ongoing litigation involving the MCST or the condominium can signal potential issues within the community. Such legal matters are important for buyers to consider as they can impact the living experience and future costs.
Our Selection Top Neighbourhoods for Resale Condos
1. Ardmore (off Orchard)
Despite a general downturn in luxury condominium sales of late, one of our favourite and most exclusive resale condo neighbourhoods is Ardmore, just hidden behind Orchard Road. Some of the most exclusive developments in the area include Le Nouvel Ardmore and Sculptura Ardmore.
Ardmore Park is a frontrunner, with median prices rising 135.8%, doubling from $1,889 per sq ft (psf) in 2006 to $4,454 psf in September 2023. With the redevelopment of strata buildings from the shopping district into multi-use developments for the future Orchard Road, we foresee this revitalisation further enhancing the value of properties in this area.
2. Cairnhill
Cairnhill is another prime example of a mature property neighbourhood comprising heritage homes and contemporary condos. With its established community and urban conveniences right off Orchard Road, Cairnhill represents a stable and attractive investment opportunity, especially with the recent announcement of The Ritz-Carlton Residences being one of the top gainers in Q1 2024, reaping a $4.9 million profit.
You might also consider looking at the Klimt Cairnhill if you’re looking for a new property development instead of a resale condo as a future investment.
3. Bukit Timah
Resale condominiums along the Bukit Timah stretch seemingly as a members’ club of the wealthy with resort-like properties filled with amenities and lifestyle services together along this stretch of tree-lined homes. The new Watten House launch recently shattered records with an impressive S$3,484 per sqft price.
If you’re looking for a resale condo with space, the stunning 7,050 sqft penthouse with more than $1.2 million renovations with 5 bedrooms and 5 baths on the 28th floor at Wing on Life Garden might be for you. If you’re looking for a legacy investment for generations to come, this is the neighbourhood for you and your family.
4. Tanjong Pagar
If living close to the city’s downturn central business district is your priority, Tanjong Pagar may be the destination you’re looking for.s Setting the benchmark for sustainable and livable developments that blur the lines between business and leisure, Wallich Residence has become an iconic landmark in downtown Singapore.
Situated on the top floors of Guoco Tower, from the 39th to the 64th story, it has redefined luxury living in the city’s skyline and brought renewed vitality to the business district. Upcoming mixed-used luxury condos are being developed around the CBD, so a resale condo in this neighbourhood would be a solid investment as Singapore grows.
5. Sentosa Cove
Sentosa is a waterfront living dream destination. However, most projects have experienced a median profit loss. But there still a couple of properties worth noting, such as The Berth by the Cove, with 68 resale transactions yielding a median profit of $282,350 for a holding of 11.1 years. Also, one of the top gainers for Q1 this year was The Oceanfront@Sentosa Cove, with a 27% profit.
If you’re looking for a potential investment opportunity, now is the time to consider, especially with the recent The Residences at the W Singapore Sentosa Cove, where developer CDL slashed prices by 40% to an average selling price of S$1,780 per square foot.
Discover the Right Resale Condo Property
At our luxury real estate firm, we specialise in assisting global investors with the purchase of Singapore resale condos, targeting portfolio diversification and long-term return on investment. Our comprehensive service begins with identifying the right property based on each investor’s objectives. We then manage the entire buying process, from acquiring to renting the property and handling tenant relationships. Finally, we take charge of marketing the property for its eventual resale, ensuring that our clients achieve the best possible financial outcome now and in the future.
