Analysis

New Launch Vs Resale: Which Is More Profitable? We Look At 3,612 Transactions Over 5 Years

  • October 11, 2022
  • 6 min read
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Ryan J

A seasoned content strategist with over 17 years in the real estate and financial journalism sectors, Ryan has built a reputation for transforming complex industry jargon into accessible knowledge. With a track record of writing and editing for leading financial platforms and publications, Ryan’s expertise has been recognised across various media outlets. His role as a former content editor for 99.co and a co-host for CNA 938’s Open House programme underscores his commitment to providing valuable insights into the property market.

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Haojie
Haojie
1 year ago

In your analysis of ‘profit’, did you consider the stamp duties of 3-4%? The cost of selling via an agent of 2%? And also the cost of equity for resale having the cash on a risk free basis of at least 2.5% with cpf (higher in recent times)?

My estimate of breakeven for new deals is approx 8% or so after 3yrs. So if it’s 9% profit at sub sale you should b barely breakeven. Resale would have to take into account cost of leverage.

Stacked Homes
Admin
1 year ago
Reply to  Haojie

Hi Haojie, we did this piece as an across-the-board look at the pure profitability based on purchase and selling price. It wasn’t meant to be a piece that calculates actual profitability. For that, it would be a lot more in-depth because we’d need to account for the interest rates at the time of purchase, smaller loans for new launches, possible rental income for resale transactions (as well as larger interest costs since it’s not a BUC). With regards to agent fees and stamp duties, new and resale are affected equally and so there was no real need to make an exception for each.

We’d like to reserve this for another piece which would be more in-depth 🙂

want to buy private
want to buy private
1 year ago

hi whats new sale to new sale?

Stacked Homes
Admin
1 year ago

Likely OTP lapsed but was recorded earlier, these can be ignored.

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