Are New Launches A Safer Investment Than Resale in Singapore?

Are you considering investing in a property in Singapore but wondering whether a new launch or resale condo is a safer investment? This is a common dilemma faced by many potential property investors in Singapore. While both options have their advantages and disadvantages, it is important to consider your personal circumstances and investment goals before making a decision.

New launches are often marketed as being more attractive to seasoned investors due to their potential for capital appreciation. However, these properties can also come with a higher price tag and may require a longer holding period before seeing any returns. On the other hand, resale condos are generally seen as a safer investment for new landlords due to their lower entry point and established rental yields. But they may come with their own set of challenges, such as the need for repairs and maintenance.

Ultimately, the decision on whether to invest in a new launch or resale condo will depend on a variety of factors, including your budget, investment goals, and risk appetite. In this article, we will explore the pros and cons of both options to help you make an informed decision on which type of property investment is right for you.

The Reef At King's Dock - one of the best-selling new launch in Singapore despite being priced higher PSF than surrounding resale condos such as Corals At Keppel Bay and Reflections At Keppel Bay.

Understanding the Singapore Property Market

If you're considering investing in Singapore's property market, it's important to understand how it works. The Singapore government plays an active role in regulating the market, and there are several factors that can affect property prices and demand.

One key factor is the availability of land. Singapore is a small island nation with limited land resources, and this has led to a competitive market for land. Developers must bid for land through government tenders, and the highest bidder is awarded the land. This can drive up the cost of land and, in turn, the cost of property.

Another factor is market conditions. The property market in Singapore can be affected by both local and global economic conditions. For example, rising interest rates can make it more expensive to borrow money for a property purchase, which can reduce demand and lower prices. On the other hand, a strong economy and low unemployment can increase demand and drive up prices.

When it comes to buying property in Singapore, you have the option of purchasing a new launch or a resale property. New launches are properties that are still under construction or have just been completed, while resale properties are properties that have already been lived in.

Developers often offer incentives for buyers of new launches, such as discounts or free furniture packages. However, new launches can also be riskier investments as they are subject to construction delays and changes in market conditions.

Resale properties, on the other hand, are generally considered to be safer investments as they have a proven track record and are not subject to the same risks as new launches. However, resale properties may be more expensive than new launches, particularly if they are located in desirable areas.

Overall, both new launches and resale properties can be good investments in Singapore's property market. It's important to do your research and consider factors such as market conditions, location, and developer reputation before making a decision.

New Launches Vs Resale Condos

When it comes to investing in property in Singapore, one of the key decisions you'll need to make is whether to go for a new launch or a resale condo. Here are some factors to consider:

New Launch Condos

New launch condos are properties that have not yet been completed, or are still under construction. They are typically sold by developers, and are marketed as brand new, with all the latest amenities and facilities.

Pros of New Launch Condos

• Potential for capital appreciation: buyers get to be the first-hand owner of the development, giving them the opportunity to dictate the future selling price and also leverage on other future new launches to exit for a healthy profit.
• Modern amenities: New launch condos are built with the latest amenities and facilities, which can be attractive to buyers and tenants.
• Lower maintenance costs: As a brand new property, new launch condos are less likely to require maintenance and repairs in the short term.

Cons of New Launch Condos

• Longer wait time: New launch condos can take several years to be completed, which means you'll need to wait before you can start earning rental income or move in.
• Risk of delays: There is always a risk that the construction of the property will be delayed, which can impact your investment plans.
• Lack of history: As a brand new property, new launch condos do not have a track record of rental income or resale value, which can make it harder to assess their potential as an investment.

Resale Condos

Resale condos are properties that have already been completed and are being sold by the current owner. They may have been lived in before, and may have some wear and tear, but they also have a track record of rental income and resale value.

Pros of Resale Condos

• Immediate rental income: Resale condos are often sold with tenants in place, which means you can start earning rental income right away.
• Established track record: Resale condos have a track record of rental income and resale value, which can make it easier to assess their potential as an investment.
• Greater choice: There are typically more resale condos available on the market than new launch condos, which means you have a greater choice of properties to choose from.

Cons of Resale Condos

• Higher maintenance costs: Resale condos may require more maintenance and repairs in the short term, as they may have been lived in before and have some wear and tear.
• Less modern amenities: Resale condos may not have the latest amenities and facilities, which can be less attractive to buyers and tenants.
• Higher upfront costs: most units require renovation, as well as upfront costs on loan interests, maintenance fees and property tax.

Investment Potential

When it comes to investing in property, one of the most important considerations is the investment potential. This refers to the potential for the property to appreciate in value over time, which can provide a good return on investment.

New launches are often considered to have better investment potential than resale properties. This is because they are usually priced lower than comparable resale properties, and they have the potential to appreciate in value as the development progresses. Additionally, new launches often come with a range of facilities and amenities that can make them more attractive to potential tenants or buyers.

Investing in a new launch property can also provide a good opportunity for capital appreciation. This is because the value of the property is likely to increase over time as the development progresses and the surrounding area develops. This can provide a good return on investment for those who are willing to hold onto the property for a few years.

However, it's important to note that investing in property always carries some level of risk. While new launches may have better investment potential than resale properties, there is no guarantee that the property will appreciate in value as expected. It's important to do your research and assess the risks before making any investment decisions.

Overall, if you're looking for a good investment property with strong potential for capital appreciation, a new launch property may be a good option to consider. Just be sure to do your due diligence and assess the risks involved before making any investment decisions.

Price and Affordability

When it comes to investing in a property, price is always a crucial factor to consider. New launches in Singapore tend to come with a higher price tag compared to resale units due to various factors such as location, amenities, and developer reputation. However, it is important to note that newer units usually come with better quality finishes and fittings, which may justify the premium price.

On the other hand, resale units may offer more affordable options for investors who are looking for under-priced units. These units may have been on the market for a longer time, and the owners may be more willing to negotiate on the price. Additionally, resale units may be located in more established neighbourhoods, which may be more attractive to some investors.

When considering price and affordability, it is important to look beyond just the initial purchase price. You should also take into account additional costs such as stamp duty, legal fees, and renovation costs. These costs may be higher for resale units as they may require more extensive renovation work compared to new launches.

Overall, whether new launches or resale units are more affordable depends on various factors such as location, unit size, and age of the property. It is important to do your due diligence and research the market to find the best investment option for your budget and financial goals.

Rental Prospects

When it comes to rental prospects, both new launches and resale properties have their advantages and disadvantages. However, new launches tend to have a higher rentability rate due to their modern facilities and amenities, which attract potential tenants.

Moreover, new launches are often located in areas with high rental demand, such as near MRT stations, shopping malls, and other amenities. This makes them a more attractive option for potential tenants, which can result in higher rental income for you.

On the other hand, resale properties may have a more established rental market, which means that you may have a better idea of the potential rental rates and potential tenants. However, the rental rates may not be as high as new launches due to the lack of modern facilities and amenities.

When renting out your property, it's important to consider the potential tenants and their needs. For example, if you're targeting families, you may want to look for properties with larger unit sizes and facilities such as playgrounds or swimming pools. Alternatively, if you're targeting young professionals, you may want to look for properties in areas with a vibrant nightlife and easy access to public transportation.

Overall, both new launches and resale properties can provide a source of passive income through rental income. However, new launches may offer a more predictable rental income due to their higher rentability rate and modern facilities and amenities.

Location and Amenities

When it comes to choosing between a new launch and a resale condo, location plays a crucial role in determining the value of your investment. While new launches may offer more modern facilities and amenities, they may not be located in established and desirable neighbourhoods. On the other hand, resale condos may be located in more established neighbourhoods with established infrastructure and amenities.

When evaluating the location of a new launch or resale condo, consider the proximity to amenities such as schools, shopping centres, and medical facilities. A condo that is located near these amenities is likely to be more attractive to potential tenants and buyers.

Another important factor to consider is the proximity to public transportation, especially MRT stations. A condo that is located near an MRT station is likely to be more desirable and easier to rent out or resell. However, be aware of the potential for traffic noise if the condo is located near a busy road or expressway.

In terms of amenities, new launches may offer more modern and luxurious facilities such as swimming pools, gyms, and clubhouses. However, these facilities may come with higher maintenance fees. Resale condos may have more basic facilities, but they may also have lower maintenance fees.

When considering location and amenities, it is important to evaluate your personal preferences and investment goals. A new launch may be a better fit if you are looking for modern facilities and are willing to pay higher maintenance fees. A resale condo may be a better fit if you are looking for a more established neighbourhood with lower maintenance fees.

Overall, both new launches and resale condos can be safe investments in Singapore, as long as you do your research and evaluate the location, facilities, and amenities carefully.

Maintenance and Renovation Costs

When it comes to maintenance and renovation costs, both new launches and resale condos have their pros and cons.

New launches typically come with brand new facilities and appliances, which means that you may not have to worry about maintenance costs for a while. However, you may still need to pay for minor repairs and upkeep, especially if you plan to rent out the property. Additionally, if the condo is part of a larger development, you may also need to pay maintenance fees for communal areas such as swimming pools, gyms, and gardens.

On the other hand, resale condos may have higher maintenance costs, especially if they are older and have not been well-maintained. However, you may also be able to negotiate a lower purchase price to offset these costs. In terms of renovations, resale condos may require more extensive work to update outdated facilities and appliances, which can add to your overall costs.

It's important to note that maintenance and renovation costs can vary widely depending on the specific condo and its location. Before making a purchase, it's a good idea to research the average maintenance fees and renovation costs for similar properties in the area. You may also want to consider hiring a professional inspector to assess the condition of the condo and identify any potential maintenance or renovation issues.

Overall, whether a new launch or resale condo is a safer investment in terms of maintenance and renovation costs depends on a variety of factors. It's important to do your research and weigh the pros and cons carefully before making a decision.

Risks and Challenges

Investing in property, whether new launches or resale, involves risks and challenges that you need to be aware of. While new launches may seem like a safer investment due to their modern amenities and lower maintenance costs, there are still potential risks that you need to consider.

One of the biggest risks with new launches is the possibility of delays in completion. Developers may face unexpected challenges during the construction process, such as labour shortages, supply chain disruptions, or design changes. These can lead to delays in the completion of the project, which can affect your expected rental income or resale value.

Another challenge with new launches is the lack of historical data. Unlike resale properties, which have a track record of rental and resale prices, new launches have no such data. This makes it harder to predict their future performance and assess their potential risks.

When investing in resale properties, you need to be aware of potential risks as well. One of the biggest risks is buying a property with hidden defects or maintenance issues. It is essential to conduct thorough due diligence before making an offer on a resale property. This includes getting a professional inspection, reviewing the property's maintenance history, and checking for any outstanding debts or liens.

Another risk with resale properties is the possibility of buying in a declining market. Resale properties may be subject to market fluctuations, which can affect their resale value and rental income. It is essential to research the local property market and assess the demand for rental properties in the area before making an investment.

In summary, both new launches and resale properties come with risks and challenges that you need to consider. It is essential to conduct thorough due diligence, research the local property market, and be prepared for potential surprises and challenges. By doing so, you can make an informed decision and increase your chances of a successful investment.

Benefits and Advantages

Investing in a new launch property has several benefits and advantages that make it a safer investment option than resale properties in Singapore. Here are some of the reasons why:

Discounts and Incentives

One of the biggest advantages of investing in a new launch property is the discounts and incentives offered by developers. These discounts can range from cash rebates to furniture vouchers, and can help you save a lot of money in the long run. Additionally, developers may also offer early bird discounts to buyers who purchase a unit during the launch period.

Better Facilities and Designs

New launch properties are built with modern designs and facilities that cater to the needs of contemporary living. Developers invest a lot of time and resources in designing and building these properties to ensure that they meet the expectations of buyers. This means that you can expect better layouts, improved amenities, and more advanced technology in a new launch property than in a resale property.

Lower Cost of Maintenance

New launch properties are built with new materials and are equipped with modern facilities that require less maintenance than older properties. This means that you will spend less money on maintenance and repairs in a new launch property than in a resale property. Additionally, new properties come with warranties that cover defects and damages for a certain period, giving you peace of mind.

Easier to Rent Out

New launch properties are easier to rent out than resale properties because they are newer and offer better facilities and amenities. Tenants are often willing to pay a premium for a property that is well-designed, well-maintained, and equipped with modern facilities. This means that you can expect higher rental yields and a more stable rental income in a new launch property than in a resale property.

Overall, investing in a new launch property has several benefits and advantages that make it a safer investment option than resale properties in Singapore. From discounts and incentives to better facilities and designs, new launch properties offer a lot of value to buyers and investors.

Understanding Leaseholds and Mortgages

When it comes to buying property in Singapore, it's important to understand the concept of leaseholds and mortgages.

A leasehold property means that you own the property for a certain number of years, usually either 99 or 999 years. After this period, the property will revert back to the government, and you will no longer own it. This is in contrast to freehold properties, which you own indefinitely.

Most new launches are leasehold properties, whereas resale properties can be either leasehold or freehold. It's important to consider the duration of the lease when buying a leasehold property, as this can affect its resale value.

When buying a property, most people will need to take out a mortgage to finance the purchase. A mortgage is a loan that is secured against the property, and you will need to make monthly repayments to pay off the loan.

It's important to note that the Total Debt Servicing Ratio (TDSR) framework was introduced in 2013 to ensure that borrowers do not overextend themselves when taking out a mortgage. The TDSR limits the amount of your income that can be used to repay loans, including your mortgage.

When applying for a mortgage, it's important to shop around and compare different options to find the best deal for you. You should also consider whether you want a fixed or variable interest rate, and whether you want to pay back the loan over a shorter or longer period of time.

Overall, understanding leaseholds and mortgages is crucial when considering whether to invest in a new launch or a resale property. By doing your research and seeking professional advice, you can make an informed decision that is right for you.

The Role of Developers and Agents

When it comes to investing in newly launched condominiums, developers and agents play a crucial role in the process. Developers are responsible for designing and constructing the building, while agents are tasked with marketing and selling the units.

One of the advantages of investing in a new launch is that developers often offer attractive pricing and promotions to entice buyers. These incentives may include discounts, rebates, or even furniture vouchers. However, it's important to keep in mind that developers are ultimately looking to make a profit, so it's essential to do your due diligence and ensure that the investment makes financial sense for you.

Before investing in a new launch, it's also important to visit the showflat and review the floor plans. This will give you a better sense of the layout and design of the unit, as well as the quality of the finishes and fittings. It's also a good idea to research the developer's track record and reputation to ensure that they have a history of delivering quality projects.

While investing in a new launch can be an exciting opportunity, it's important to approach the process with a clear and neutral mindset. Do your research, ask questions, and seek advice from professionals if necessary to ensure that you're making an informed decision.

Progressive Payment Scheme

When purchasing a new launch property in Singapore, you have the option to use the Progressive Payment Scheme (PPS). This scheme allows you to pay for the property progressively in stages, instead of paying the full amount upfront.

Under PPS, you will make instalment payments in tandem with the construction progress. The payments are set out in milestones from the beginning, and these would only have to be paid up when the developer attains the set milestone. This means that you will only need to pay for the completed work, making it a more manageable payment option for many buyers.

It's important to note that for new launch condos, you would need to be eligible for a 75% maximum loan at the point of purchase and have enough cash and CPF OA for the 25% down payment and relevant stamp duties before CPF will allow the funds to be disbursed. You do not need to pay the full 100% on Day 1. 

One advantage of PPS is that it can help to mitigate the risk of buying a new launch property. Since you only pay for the completed work, you are not required to make full payment until the property is completed. This means that if there are any delays or issues with the construction, you will not be at risk of losing your entire investment.

However, it's important to note that PPS may not be available for all new launch properties. It's important to check with the developer or agent to see if this payment option is available for the property you are interested in.

Overall, PPS can be a useful payment option for those purchasing a new launch property in Singapore. It allows you to pay for the property progressively, reducing the financial burden of a large upfront payment. Additionally, it can help to mitigate the risk of buying a new launch property.

Investor Profiles

When deciding between a new launch or a resale condo, it is important to consider your investor profile. Are you a new landlord or a seasoned investor? Your experience level can affect your investment strategy and risk tolerance.

New Landlords

If you are a new landlord, investing in a resale unit may be less risky. Resale units have a proven track record, and you can review historical data to assess their performance. Additionally, resale units are often located in established neighbourhoods with existing amenities and infrastructure.

However, resale units may require more maintenance and repairs. They may also have outdated features that may not appeal to modern tenants. As a new landlord, you may not be familiar with the process of managing a property, so investing in a resale unit may require more effort and attention.

Seasoned Investors

Seasoned investors may prefer new launches as they offer the potential for higher returns. New launches often come with modern features and amenities that can attract tenants and increase rental income. Additionally, new launches may be located in up-and-coming neighbourhoods with potential for capital appreciation.

However, new launches may also come with higher risks. As a seasoned investor, you may be more comfortable with taking on these risks, but it is important to conduct thorough research and due diligence before making any investment decisions.

Conclusion

In summary, whether you choose to invest in a new launch or a resale condo depends on your investor profile. New landlords may prefer the lower risk and established track record of resale units, while seasoned investors may be more comfortable with the higher potential returns and risks of new launches. It is important to conduct thorough research and due diligence before making any investment decisions.

Conclusion

In conclusion, both new launches and resale condos have their own unique advantages and disadvantages when it comes to property investment in Singapore.

If you are a new landlord and prefer a less risky investment, resale condos may be a better option as they have a proven track record and established rental yields. On the other hand, if you are a seasoned investor who is comfortable with taking on more risk, new launches may offer higher potential capital gains and rental yields in the long run.

Ultimately, the decision between new launches and resale condos depends on your individual investment goals and risk appetite. It is important to do your research and carefully consider the factors that are most important to you, such as location, price, rental yield, and potential for capital appreciation.

Some key factors to keep in mind when making your decision include:

• The location of the property and its proximity to amenities such as public transport, schools, and shopping centres.
• The price of the property and how it compares to other similar properties in the area.
• The rental yield and potential for capital appreciation over the long term.
• The level of risk associated with the investment and your own risk appetite.

By carefully weighing these factors and doing your due diligence, you can make an informed decision about whether a new launch or resale condo is the right investment for you.