A tale of New versus Resale

By The Folks @PropTalk - December 29, 2010 4 Comments

You may have already seen these reports in the ST today.

There seem to be no let up in momentum for recent property launches, especially for new developments with "smallish" units. However, it will be interesting to see what the rental situation be like once all these "shoe-box" apartments come onto the market in the next 2 - 3years.

The resale market, on the other hand, seemed to have lost steam somewhat.

Given a choice, the wife and I will prefer Resale versus New anytime. This is especially so with the still "crazy" prices for new launches these days. With Resale (especially older, completed developments), you stand a much better chance of getting:
  • Larger units at "saner" asking prices.
  • Better layouts with spacious living/dining area and much bigger bedrooms.
  • Generally no bay windows/planter boxes/PES that eat into your living space.
  • And more importantly, you do not have base your buying decision solely on the showflat or worse, just a floor-plan, which can go horribly wrong sometimes.
But that's just us talking...



4 comments to ''A tale of New versus Resale"

  1. my sentiment exactly. what's your view on older project that is worth considering, below 700K?

  2. Hi Anonymous (1st Jan): That is kinda difficult question to answer especially since we do not know your size/location preference and reason for buying (own-stay/rental?). However, $700K certainly does not get you very far these days. Any property marketing folks out there care to comment/recommend?

  3. Not necessary true. You lose out in the capital gain for resale. While 1st owner definately cash out in terms of capital gain and enjoy good rental yield. The risk is therefore transferred to you as second or third owner while awaits the next opportunity to cash out your investment. Esp if rental market falls and 1st owner can still afford to lower rental but whether you are able to lower your rental to meet your monthly mortgages. 10cents worth

  4. Hi Anonymous (4th Jan): Capital gain is a direct function of the purchase price. Given that the price of all segments (including high-end & luxury) have now surpassed their previous peaks, one will have to be extremely bullish (not to mention, "garang") to put money into new developments now and expects huge capital gains in the foreseeable future.
    And speaking from personal experiences over the past 2 -3 years, the capital gains achievable from Resale are not any worse than New.
    Prices of Resale are still lagging New at present. So one may actually be able to achieve good capital gains from Resale at lower capital outlays.
    Rental wise, many new developments that have just TOP-ed are currently struggling to achieve rental yields of 3%, whereas older properties at similiar locations are known to fetch much higher yields.
    Just our 11cents worth... :-)