After serving hundreds of property buyers for the last 9 years, “resale property vs new launch property, which one is better?” is one of the most often asked questions by home buyers and property investors, which is totally understandable. After all, whether you are buying for own stay or investment, you literally only have these 2 options, are you going to buy new launch from developers, or buy in the resale market.
In this blog, I would like to give a brief comparison and some important questions for you to consider.
The above diagram shown the comparison between new launch and resale. As you can see, there’s no clear winner here. Whether to buy a new launch or resale is mostly depends on your objective, needs, and situations.
If your main objective is for capital appreciation, particularly with shorter holding period of less than 10 years, overwhelming data and past transactions have shown that buying a good new launch (especially during the VIP preview with early bird discount) have outperform resale properties.
The keyword here is “good new launch”, because not all new launch projects are good, as I have seen many investors experienced it first hand and found out too late.
However, it doesn’t mean you can profit from investing in resale property. I have helped many investors invested in the right resale properties, and happily seeing them enjoying good rental yield returns and capital appreciation too.
So the key is, whether to buy a resale or new launch property, it depends on many factors, including your objective, time horizon, needs, personal preference and financial planning.
Here are some important questions you need to consider when deciding between the two:
- Are you buying property for own stay or investment?
- For investment, are you looking for long term rental returns or shorter term capital appreciation?
- In order to potential enjoy capital gain from first mover advantage (buying a new launch), are you ok to wait for 3-4 years (the completion period of a new launch)?
- Are you ok to rent a place first while waiting for the new launch property to be completed?
- For own stay, what are most important to you? Size, layout, condo facilities, tenure, location, schools, amenities, condition of the property, landscaping etc?
- Have you done your financial calculation and planning? Financial planning include mortgage eligibility, whether to payment Additional Buyer Stamp Duty or not, decoupling, buying under trust etc
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