NEW LAUNCH vs RESALE

LittleRedDotProperty team came across many clients who has the impression of buying resale unit is a safer bet due to lower price hence lower risk. This may not be necessary true.

In the past where our parents bought any properties in the 70s – 90s, they are able to generate at least 100% profit or even more should they sell in today market. However, things are different now as we approached the real estate. The market now is very dynamic as compare to the past. Consumers’ behavior and Government’s cooling measures are just some factors to illustrate today market.

With in-depth analysis of the price trend, cashing out from new launch is actually more feasible in term of wealth creation planning. Let us quote you few examples below to enhance our analysis:

Should I Sell?

Caspian owners bought a 3 bedroom unit at $750,000 and today worth $1.3mil. Here come the golden question; Will you choose to cash out for profit or choose to keep it?

There is no Right or Wrong choice in the situation. But if you have a choice to choose, which scenario would you prefer?

SCENARIO 01

SCENARIO 02

Should i hold the property longer?

Another classic example of a owner holding on to High Park unit since launch date till Aug 2019 and another owner choose to cash out and re-enter into another new development in identical period.

SCENARIO 01

SCENARIO 02

This is also happen even to those older developments near MRT stations as well. For eg, The Queens which is just across Queenstown MRT. The price become stable since 2014 whereas price of newer developments like Ascentia Sky and Metropolitan shoot up in 2017. This trend is visible in almost all areas especially if the area have upcoming new launch. You may wonder why despite premium price in same vicinity, many home buyers choose to buy new launch rather than resale unit. As the examples shown previously, entering at right time and exit is crucial.

When developer acquire a site, it will seek financial from banks to fund the construction stage. Banks will therefore calculate its funding management and advice on what price point developer need to sell in order to make a profit. Hence, when you purchase from developer you are assure that you are able to secure a loan so long you are qualified within TDSR framework.

However, price is different when buying from resale market. Individual sellers of specific development will have to price according to valuation of most banks so that potential buyers will able to buy over. Banks will take into consideration base on past transaction of the development and not the aesthetic factor of the unit etc. Hence if seller price the unit over the valuation, he / she may have to secure the buyer for longer period of time.

Purchasing a new home require careful planning and not all units are able to replicate the ‘formula’ always.

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DISCLAIMER

This review is solely done by Littlereddotproperty.sg. All information, calculations, charts and plans are current at the time of publication and are subject to change. All facts & figures are believed to be accurate as much as possible using various real estate subscribed tools but shall not be regarded as statements or representations of fact.