Why Higher New Launch Prices Lead Many to Consider Resale Properties

“Buying a property is relatively easy when it comes to the down payment and monthly payments. But what really matters is whether you can sell it easily and at a good price in the future.” - Raymond Tiah

“New launch prices are higher, that’s why I am looking at resale properties.”

This is what most of the resale buyers I have met told me.

But why are there still buyers purchasing new launches?

Let me share some recent research.

Attached is the price trend of three properties, all located beside each other:

- Red Line: Resale property

- Blue Line: New launch in Q4 2019, TOP in Q4 2023

- Yellow Line: New launch in Q1 2024

When the Blue property launched in 2019, its price was 19.75% higher than the Red resale property. Over about five years, the Blue property appreciated by 18%, while the Red property only appreciated by 4%.

Why is this so?

One reason is that in a new launch, the developer controls the selling prices. In contrast, the resale market prices are subject to market sentiment and behavior, with no single entity in control.