URA’s Draft Master Plan 2025: A Blueprint for 80,000 New Homes Across 10+ Estates
TLDR The URA Draft Master Plan 2025 outlines the creation of 80,000 new homes across more than 10 estates over...
Read More
The Scarcity of Resale Condos in Singapore (2025): Understanding the Supply Shortage
TLDR
Resale condos in Singapore are facing a sharp supply crunch in 2025, driven by fewer new launches, developers holding back due to rising land costs, and owners reluctant to sell amid escalating prices. This scarcity has created intense competition among buyers, pushing resale values higher and narrowing options for those seeking immediate occupancy. Unlike new launches, resale units offer ready-built convenience and established communities, making them especially attractive to families and upgraders. However, limited listings mean buyers often compromise on location, size, or budget. Sellers, on the other hand, benefit from strong bargaining power, with well-maintained units commanding premiums. The imbalance highlights a structural challenge in Singapore’s housing market: while demand remains resilient, supply-side constraints are amplifying affordability pressures, reshaping buyer strategies, and reinforcing the long-term appeal of property ownership as both a lifestyle choice and investment hedge.
If you’re currently in the market for a resale condominium in Singapore, you might be encountering a challenging landscape characterized by limited options and, in some projects, a striking absence of recent transactions. This observation is not unique; both buyers and property agents are experiencing the impact of fewer owners choosing to sell their condos. Several intertwined factors are contributing to this dwindling supply.
The Dominant Factor: Cost of a Replacement Property
A primary driver behind the reluctance to sell is the current high cost of replacement properties. Even if owners can sell their existing condo at a premium, the appreciation may not be sufficient to bridge the financial gap to a more expensive new home. This is evident in the significant price increases seen in new launch and resale condos over the past five years:
- New Launch Condo Prices: Rose approximately 40% from $1,887 psf in January 2020 to $2,640 psf in January 2025.
- Resale Condo Prices: Increased about 25% from $1,348 psf to $1,695 psf over the same period.
This “buy high, sell high” conundrum means that for many owners, the appreciation of their current property simply isn’t enough to facilitate a comfortable upgrade. As a past example illustrated, even with $2 million from an en bloc sale, a homeowner found that surrounding resale condos were already averaging $1.5 million, and a nearby new launch (Sceneca Residence) was priced above $2 million for a three-bedroom unit, making an equivalent replacement challenging.
Other Contributing Factors to the Supply Shortage:
- Higher ABSD Rates: The significantly increased Additional Buyer’s Stamp Duty (ABSD) rates are a strong deterrent for owners of second or subsequent properties. If they sell, replacing the property later incurs a much higher ABSD. For instance, a couple who bought their second property in 2012 (when ABSD for a second home was 0%) would now face a 20% ABSD if they tried to replace it. This disincentive often leads owners to hold onto their units and rent them out instead. Foreign owners face an even steeper hurdle, with a 60% ABSD on subsequent purchases (barring specific exemptions), making them highly resistant to selling. The psychological impact of ABSD rates historically never decreasing also contributes to a fear of never being able to re-enter the market for a second property once sold.
- Smaller Newer Replacements: While GFA (Gross Floor Area) harmonization has meant that some newer condos offer more usable space despite seemingly smaller overall square footage (by excluding areas like air-con ledges or long corridors), the sheer size of many older condos is often unmatched by today’s new launches. For example, an owner selling a 1,388 sq. ft. unit from an older development might find that their proceeds can only buy a 900 sq. ft. or smaller new launch unit. This significant compromise in living space makes many owners reluctant to sell, especially as spacious resale condos become increasingly rare.
- Waiting Periods for Downsizing to HDB Flats: Private property sellers who wish to downsize to a resale HDB flat face a 15-month waiting period after their private property sale. (For BTO flats, the wait extends to 30 months.) While this measure doesn’t affect those aged 55 or older who are downsizing to a 4-room or smaller flat, it creates “stickiness” for others. The inconvenience of finding interim accommodation and the logistical challenges prompt some owners to postpone their downsizing plans.
- Tighter Financing and Interest Rate Concerns: Recent cooling measures have tightened loan restrictions, including reduced loan tenures, a lower Total Debt Servicing Ratio (TDSR) (from 60% to 55%), and a reduced maximum Loan-to-Value (LTV) ratio (from 80% to 75%). For older upgraders, these restrictions translate to even shorter loan tenures and higher monthly repayments, compounded by the larger loan quantums required for today’s higher property prices. The uncertain global economic climate also adds to interest rate worries. The prospect of potentially high interest rates for another 10-20 years makes holding onto their current, fully paid-up or low-mortgage home a much safer option for many owners.
The Ripple Effect: A Weak En Bloc Market
The reluctance of current owners to sell also impacts the en bloc market. Developers looking for collective sale sites face the same challenges: owners are unwilling to sell due to high replacement property costs, financing hurdles, and the impact of ABSD on any additional properties they might acquire. Consequently, the prevailing market conditions suggest that en bloc sales are likely to remain weak for the foreseeable future, adding another layer to the overall supply shortage in the resale condo market.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Top 5 Factors That Real Estate Investors Should Consider When Selecting A Luxury Condo In Singapore
Investing in a luxury condominium in Singapore is an attractive option for real estate investors seeking high-quality properties with potential...
Read More
Top 5 Reasons : Why Singapore’s Property Market Is a Safe Haven for Investors in Uncertain Times – Insider Analysis!
In today's uncertain global economic climate, investors are constantly on the lookout for safe havens to park their wealth. Amidst...
Read More
Top 5 Considerations : Uncover the Secrets of Buying Older Properties – What They Won’t Tell You!
Buying an older property can be a dream come true for many homebuyers, as these homes often come with unique...
Read More
What Role Does Property Valuation Play In The Real Estate Industry, And Why Is It Important?
TLDR When it comes to property valuation, understanding the process is crucial for both buyers and sellers. Property valuations can...
Read More
Should I Buy In A Newly MOP HDB Or An Older Resale HDB?
TLDR When deciding between a recently MOP-ed HDB property and an older resale HDB property in Singapore, various factors come...
Read More
The 15-Month Wait-Out Period: An Unnecessary Burden in a Challenging Economy
TLDR The 15-month wait-out period introduced in September 2022 requires private property owners to wait before buying a resale or...
Read More
Top 5 : Nationalities Of Prime Property Buyers in Singapore
Singapore, a thriving city-state known for its stable political climate, excellent infrastructure, and strong economic fundamentals, has long been an...
Read More
Beyond Marina Bay Sands: Uncovering Singapore’s 5 Little-Known Secrets
Beyond Marina Bay Sands: Uncovering Singapore's 5 Little-Known Secrets Singapore is a small country with a rich history and culture....
Read More
Ouch! How Owning a Million-Dollar Home Can Sting with a Whopping $300K Interest in Just a Decade!
TLDR When considering property investments in Singapore, it's crucial to monitor home loan interest rates closely. Even a slight increase...
Read More
Top 5 : Exploring the Streets of Singapore – A Journey Beyond Just Shopping!
Singapore, a vibrant city-state known for its diverse culture and rich history, offers a plethora of unique experiences that go...
Read More
The Future Of Singapore Property Investing: 5 Trends To Watch Out For
The future of Singapore's property market is shaped by several emerging trends that reflect cautious optimism, enviable locations, and sociable...
Read More
Transforming Your Home Loan Situation with Rate Cuts
TLDR When comparing fixed and floating mortgage rates, the present fixed rate of 3% is favorable, but predictions hint at...
Read More
Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024
TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...
Read More
Upgrading to a (Potentially Smaller) New Launch Condominium: A Trade-Off Analysis for HDB Owners
TLDR For HDB owners eyeing new launch condos, upgrading often means trading space for modern amenities and potential long-term value....
Read More
Tips for Choosing the Home of Your Dreams
TLDR Decoding the Singapore property market can be challenging, but understanding key factors like property size, location, and lease tenure...
Read More
Top 5 Hawker Centres in Singapore for Local Food
Singapore, a melting pot of diverse cultures and rich culinary heritage, is home to some of the most delectable local...
Read More
44 Exciting New Condo Launches in 2024 Starting at $1,402!
Alright, let's talk about 2024. We're not expecting the same kind of shortages we've seen after COVID-19. Some folks are...
Read More
Top 5 Museums in Singapore for Art and History
Singapore, known for its vibrant culture and rich history, is home to a plethora of museums that cater to art...
Read More
Challenging the Myth of Lease Decay: Older Leasehold Condos Outperforming Newer Ones
TLDR Older leasehold condos in Singapore, particularly those built in the 1980s and 1990s, have shown annualised price growth exceeding...
Read More