There is a clear preference among buyers for new homes.
While buyers bought a record 18,920 new homes directly from developers last year, it is a different story where the secondary market is concerned.
The number of resale homes changing hands last year fell 25 per cent to 15,013 from 20,103 in 2010.
New sales, including those of executive condominiums (ECs), accounted for 46 per cent of all transactions lodged last year - the highest level since 2003 - according to an analysis of caveats lodged with the Urban Redevelopment Authority (URA).
Developers sold new units at projects like Flamingo Valley, euHabitat, d'Leedon, Reflections at Keppel Bay and H2O Residences last year.
Let's examine the different dynamics between new homes and resale homes.
Some experts believe that the slew of measures to cool the red-hot property market has caused buyers to favour new homes rather than the resale market.
The revised sellers' stamp duty of up to 16 per cent, introduced in January last year, penalise home buyers who re-sell their property within four years.
This gives an edge to new home sales.
Buyers of new launches know that by the time the apartment is physically completed in about three to four years, they are likely to be subject to less stamp duty or none at all if they sell it.
On the other hand, if they buy a resale home for investment, there may be some concerns with securing a tenant in the current uncertain global economic climate.
Hence, this trend towards new sales remains intact even as the resale market languishes with tepid volumes.
Investors may also prefer new homes as they can enjoy a progressive payment plan in which the purchase price of the home is paid in instalments based on the completion rate of the project, experts add.
Buyers can, thus, spread out their payments, rather than service a housing loan of up to 80 per cent of the purchase price of a resale unit right from the start.
Size and affordability
Buying from the resale market has its advantage.
Older, completed projects offer units that are typically larger in size than new launches. This is due to the trend of developers pushing out smaller apartments to maintain the affordability of homes on an absolute basis even as prices in terms of per square foot have climbed steadily.
Buyers keen on acquiring larger and more affordable living spaces should, therefore, look towards well-managed resale projects.
Mr Ku Swee Yong, chief executive of International Property Advisor (IPA), prefers completed units that an investor can 'see and feel'.
This allows for the quality of the home to be assessed and for the buyers to ensure that the management is upkeeping the common areas well.
'If you're buying an uncompleted unit on plan, you don't know what might be delivered to you,' he cautions.
Resale home prices are also generally lower compared to new homes. The demand for new homes has allowed developers to charge a premium through clever marketing and contemporary design.
Buyers looking at resale homes may find bargains - units priced below valuation - if they spend time doing their research.
Mr Colin Tan, research head at Chesterton Suntec International, says: 'Developers are in a healthy position but the secondary market has some weak spots, so there might be opportunities to find bargains from sellers who might be more leveraged and willing to sell.'
Credo Real Estate executive director Ong Teck Hui gives some examples of resale alternatives - that come with a bigger floor area and freehold title - in older projects.
In Seletar Hills, for instance, a three-bedroom, 1,227 sq ft apartment at Greenwich - a newly launched project, has sold for about $1.6 million - or $1,300 per sq ft (psf).
Yet further into the estate, units at an older freehold condo, Nim Gardens, have transacted for between $1.36 million and $1.48 million. With a floor area of 1,830 sq ft, this works out to just $740 to $800 psf.
Nearby, Mimosa Park also offers a similar price range with unit sizes of 1,755 sq ft and upwards.
If a buyer has a limited budget, say up to $1 million, he may not be able to afford these big units even if they are cheaper on a psf basis.
However, he can get a unit at that price from the new sale market, provided he is willing to settle for a shoebox unit - typically with a floor space of 500 sq ft or less.
Buying a resale unit may be a good bet if it is located in a tested market, like the Central Business District. As the buyer can lease out his unit immediately he can start earning back his capital investment right away.
'There are plenty of new homes in the pipeline so it is unclear how the rental market might be in a few years,' says Chesterton Suntec's Mr Tan.
'It is also unclear how many of these small apartments sold by developers recently will be received when completed since they are an untested market,' he notes.
If the purchased resale unit is already tenanted, there is certainty in the yield. In comparison, an uncompleted home sale can provide only the projected yield, IPA's Mr Ku says.
The allure of new homes
New homes have many advantages such as having a unit decked out in the latest brand-name fixtures and fittings.
The bumper supply of state land has also led to a plethora of new launches with developers offering creative product offerings such as themed-condos and throwing in various sweeteners like stamp duty absorption and furniture and shopping vouchers.
There is also the snob factor in being able to boast that your new home is designed by current renowned international architects like Zaha Hadid and Moshe Safdie.
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Martin Koh/ Sherry Tang
Martin Koh/ Sherry Tang