Why are homebuyers consistently willing to pay considerably more for new launch condominiums despite the substantial price differential? The premium, which typically amounts to 40% higher per square foot compared to resale counterparts, stems from several tangible and intangible factors that investors and homeowners calculate into their purchasing decisions.
Recent market data reveals that average new launch prices have surpassed $2,200 per square foot in 2024, with freehold developments commanding an especially notable 48.2% premium over comparable resale properties during the first three quarters.
The justification for this substantial price gap largely revolves around physical and financial attributes unique to new developments. Brand-new facilities, longer remaining leases for leasehold properties, modern smart home features, and the increasingly rare opportunity to select preferred units contribute notably to perceived value. The integration of energy efficient features in new constructions offers long-term utility savings that older resale properties often lack. Making a property decision should always begin with identifying personal objectives rather than following others’ recommendations without consideration of your unique circumstances.
The Progressive Payment Scheme offers cash flow advantages that resale transactions cannot match, while the one-year defect liability period provides financial protection against unexpected repair costs during initial occupancy.
Investment potential remains a primary driver behind buyers’ willingness to absorb premium pricing. Capital appreciation often accelerates as construction progresses, particularly in integrated developments that historically maintain stronger value retention.
For leasehold properties, the fresh 99-year tenure maximizes future value prospects, while early purchasers frequently benefit from presale market dynamics through subsale opportunities before project completion.
Market conditions continue to influence the price discrepancy between new and resale segments. The recent easing of supply constraints through mega-developments has moderately narrowed the historical price gap that prevailed from 2017 through 2023.
Bank valuations typically align with developer pricing for new launches, validating the premium structure within institutional financing frameworks. With anticipated interest rate decreases in 2025, new launch financing could become more attractive for potential buyers. However, buyers must carefully evaluate the tradeoffs, including longer waiting periods before occupancy, limited negotiation leverage, and the inherent uncertainty regarding final product quality and development timelines that accompany new launch investments.
