Why People Still Choose More Expensive New Condos Over Resale in 2023: 4 Case Studies That Show PSF Isn’t Everything

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In 2018, there was a DBS research report that predicted that by 2030, the price of new private homes would average between $2,300 and $2,900 (psf). This sounded incredibly bullish at the time, especially considering the average price of a new private home in 2018 was around $1,500 (psf).

But look at our situation today.

It’s 2023, and the average new launch price so far is 2,380 psf.

As a result, since May of this year, there have been a series of reports that the price gap between newly built condominiums and second-hand condominiums has widened. With the new launch price of 2,100 psf setting a new standard even in the periphery, it’s no wonder more HDB upgraders are turning to the resale market. This has further fueled the price comparison between new construction and resale as homebuyers search for the best deal.

But if the price per square foot of a new condo is so out of reach (compared to resale), why would anyone still buy a new condo? Besides, there is an even bigger reason. That’s the whole reason.

It’s easy. Older condos are usually larger (sometimes even less efficient with bay windows and planters), but newer condos are smaller and make better use of space.

As a result, new launches have in some cases been even cheaper to enter the region.

Here are some examples where this happened.

1. Cairnhill 16

Cairnhill 16 is an upscale development located in the eponymous neighborhood. What truly counts as luxury is debatable, but there are some positives. Small Luxury Property (39 Units), Freedom, 3.2m Ceilings, Less than 10 Minutes Drive to Orchard.

I won’t go into amenities, as the proximity to the main shopping district and central location puts everything you need close by. No need to talk about public transport either. Anyone living or renting in this area would not need public transport.

With an average price of 2,860 psf, this condo is one of the more expensive options in Newton. But don’t be fooled. Well worth the money compared to many resellers.

development unit Average Psf Up tenure price difference
16 Cairnhill 39 $2,727 2023 free hold
The Peak @ Cairnhill I 52 $2,064 2014 free hold -24.3%
The Vermont on Cairnhill 158 $2,534 2013 free hold -7 percent
Cityvista Residences 70 $1,933 2010 free hold -29.1 percent
Cairnhill Residences 97 $2,527 2009 free hold -7.3%
The Edge on Cairnhill 46 $2,346 2002 free hold -14 percent
life 137 $2,100 2009 free hold -23 percent
Orchard Scotts 387 $1,729 2008 99 year lease -36.6%
hill top 240 $3,746 2011 free hold +37.4%
Casa Cairnhill 72 $2,079 1991 free hold -23.76%

Data sourced January 2023

One example is Helios Residence. His two-bedroom here is about 1,313 square feet and sold for about $3 million.

This is roughly equivalent to the 3 bedrooms in Cairnhill 16. A 3-bedroom unit (1,055 square feet) on the 6th floor sold for $3,068,772 in June 2023. You may not have a practical home shelter/garden, but it will allow you to: There is an extra bedroom compared to the 2 bedrooms offered by Helios and this is a deal breaker.

It’s surprising that the price difference between the two isn’t that great, as it’s generally considered to be the better one.

Also nearby are CityVista Residences. Here, a 2,629-square-foot unit (4 beds) sells for about $5.2 million.

This is clearly larger than the four-bedroom (1,744 sq ft) Cairnhill 16, but it’s the interior features that count. CityVista’s units still have the shortcomings of a 2000’s condo layout. Its main point is the space-consuming bay windows that are installed in so many places in the unit.

There is also a large indoor area outside the elevator lobby, but it is not very useful other than a small study.

The only advantage of the CityVista equivalent is that besides the actual square footage (swallowed up by bay windows, etc.), you get one extra bathroom. In this case, the premium gap of 29.1 percent would tip towards Cairnhill 16.

2. Dairy Botany

One of Singapore’s most ‘green’ condominiums, this development sits right next to Dairy Farm Nature Park. The Wallace Trail and Education Center are located here, making it a popular spot for hikers and nature lovers. This is he one of the few places in Singapore where wild monkeys can be seen.

The Botany at Dairy Farm is within a 5-minute drive of shopping malls such as Hillview Area and HillV2. With the equivalent of 40,000 square feet of retail space, the development of Dairy Farm Residences will bring more amenities to the area.

The Botany’s highlight is its 3 bedrooms, which are close in volume to some resale condos. For example, across the road, Forescre Residences has a 3-bedroom unit on the 13th floor that sold for $1.75 million.

However, this is closer to the price of The Botany’s 3 bedrooms. 3 bedrooms are like this.

To be clear, we expect Botany’s price to continue to rise, probably in the $1.8 million to $1.9 million range. But even if there is, the difference is very small between 5-10 percent of him considering the 10-year age gap.

3. Terrahill

Terra Hill is near the Pasir Panjang MRT (CCL) and adjacent to Kent Ridge Park. Only 5 minutes walk to MRT station. From here, it’s just 4 stops to Harbourfront VivoCity. Or head in that direction and you’ll reach Holland V in about 5 stops.

The highlight of Terra Hill is the three-person bed. For Terra Hill, the starting price for these units is around $2.35 million.

However, a resale penthouse unit in nearby Maily sold for about $2.27 million.

Now, The Maily has a few drawbacks, including the presence of bay windows (predictable given its 2008 construction year) and a roof terrace that can be a waste of space. The value of this feature is highly subjective.

The size of Mayley’s room isn’t amazing, but there’s a convenient extra study room and an extra toilet in the kitchen. This is one of the options that buyers are most likely to look at if they don’t mind reselling him.

4. Piccadilly Grand

This condo has direct access to MRT Farrer Park View (NEL) and is within walking distance to the famous Mustafa Centre.

Being so close to the heart of Little India, there are endless dining options nearby, many of which are open 24 hours. This is a fairly densely populated area overall, so it is likely to be attractive to city dwellers.

Piccadilly Grand also benefits from an integrated development with retail components and a childcare center in the form of Piccadilly Galleria.

Our first point of comparison is the 2 bedroom City Square Residence. The smallest two-bedroom in this resale project is 840 square feet, which is quite large by today’s standards.

Unfortunately there are bay windows that take up space and no balconies, but the service yards at both ends are good for ventilation.

The last two-bedroom deal here was on the 19th floor and priced at $1.63 million. That’s a lot more than his $1,348,000 reference price for his two-bedroom in Piccadilly, but likely on a higher floor.

That’s right, the resale price for a two-bedroom in City Square could be 21 percent higher than the reference price for the new Piccadilly Grand.

That being said, the 646-square-foot two-bedroom in Piccadilly has a long walkway and a small kitchen, and seems more of a service for tenants than owners. There is no balcony and you will need a dryer given that there is no service yard.

A 19th-floor unit of this layout in Piccadilly Grand eventually sold for $1,502,000, still over $100,000 less than the price of City Square Residences.

Given the more family-friendly layout with service yards, the City Square Residences will probably be your first point of comparison. City Square is far from Farrer Park MRT, but not by much. In fact, the value of long-term storage can be even higher here.

After all, psf alone isn’t the most accurate way to compare when it comes to buying a condo.

Also read: 20 Cheapest Executive Condos in Singapore in 2023 (From $583 psf)

This article first appeared on Stackedhomes.

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