Why Many Resale Condo Buyers Think They’re Making Money. Until They Actually Do the Math.

“The biggest financial mistakes aren’t caused by bad decisions. They’re caused by believing something that appears obvious, but isn’t true.”

Most of us have seen the famous optical illusion.

At first glance, it is simply a vase.

Nothing unusual.

Then someone tells you to stop looking at the object and instead focus on the empty space around it.

Suddenly, the vase disappears.

Instead, you see two faces staring at each other.

The fascinating part is not that the image changes.

The image never changed.

Only your perspective did.

Once you see the two faces, you can never go back to seeing only the vase.

The Singapore property market has its own version of this illusion.

For years, one belief has been repeated so often that it has become accepted as fact.

“Resale condominiums are always the safer and better investment.”

The reasoning sounds perfectly logical.

You receive the keys immediately.

You can rent it out immediately.

The project already exists.

There is no construction risk.

There is immediate rental income.

The building has an established market value.

Compared to buying a hole in the ground and waiting several years for completion, resale feels predictable.

Comfortable.

Safe.

And because it feels safer, many buyers automatically assume it is also the smarter financial decision.

But what if that assumption is completely wrong?

What if most buyers have been looking only at the vase while ignoring the hidden picture?

Because once you begin analysing the actual numbers instead of the headlines, an entirely different reality starts to emerge.

The biggest surprise?

Many resale condominiums that appear profitable on paper are generating remarkably little real wealth after accounting for all ownership costs.

In some situations, owners are barely keeping pace with inflation.

Others are quietly losing purchasing power despite believing their property has appreciated.

The purpose of this article isn’t to argue that resale properties are bad.

Far from it.

Every property type has a purpose.

The real objective is much simpler.

To help buyers understand the difference between preserving wealth and creating wealth.

Because those are two completely different strategies.

Unfortunately, many Singaporeans unknowingly buy one while expecting the results of the other.

That misunderstanding may be costing them hundreds of thousands of dollars over the course of their property journey.

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The Biggest Surprise in Today’s Market

Let’s begin with something that appears completely illogical.

Across Singapore, many older condominiums continue performing reasonably well.

Projects that are ten, fifteen or even twenty years old continue attracting buyers.

Yet one very specific category of properties has suddenly encountered increasing pricing pressure.

Ironically, they are among the newest resale condominiums available.

These are projects that obtained their Temporary Occupation Permit (TOP) within the past three to five years.

At first glance, this makes no sense.

Shouldn’t newer properties command stronger prices?

Shouldn’t buyers naturally prefer something that is only a few years old?

After all, everything inside the apartment is newer.

Facilities remain modern.

The building still looks fresh.

Maintenance costs should theoretically remain lower.

Yet many of these owners are discovering that achieving their expected selling price has become much harder than anticipated.

Why?

The answer has very little to do with demand.

Instead, it comes down to something many buyers have never even heard of.

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The Silent Rule Change That Changed Everything

One of the most significant structural changes in Singapore’s property market was the introduction of Gross Floor Area Harmonisation, commonly known as GFA Harmonisation.

Although the policy received relatively little public attention, its impact has been profound.

To understand why, we first need to understand how condominiums were traditionally sold.

Under previous rules, developers had considerable flexibility regarding what counted as saleable floor area.

This included spaces that buyers could never realistically use as living areas.

Examples include:

• Large air-conditioning ledges

• Oversized planter boxes

• Certain void spaces

• Double-volume ceiling areas

On paper, these spaces increased the official size of the apartment.

In reality, they added very little functional living space.

Imagine purchasing a condominium advertised as 1,000 square feet.

Sounds impressive.

But perhaps 80 to 100 square feet consisted of an air-conditioning ledge that could never become part of your living room.

You effectively paid condominium prices for empty exterior space.

The new harmonisation rules changed this.

Today, developers must largely sell based on usable internal living space.

Air-conditioning ledges no longer artificially inflate the stated floor area.

The result?

New projects suddenly appear smaller on paper.

But they are actually far more efficient.

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Why This Hurts Recent Resale Owners

Now let’s consider two buyers.

Buyer A purchased a condominium five years ago under the old measurement rules.

Buyer B purchases a brand-new launch today under harmonised measurements.

Although Buyer A technically owns a larger unit on paper, both apartments may provide almost identical usable living space.

Modern buyers understand this.

They no longer compare headline square footage.

They compare actual usable layouts.

As a result, many three-to-five-year-old resale condominiums now appear expensive when viewed on a price-per-square-foot basis.

Not because they are overpriced.

But because the measuring system itself has changed.

Their pricing suddenly looks less competitive against newer developments.

This creates a valuation squeeze.

Sellers find themselves lowering expectations simply to remain competitive.

Many owners never anticipated this.

Yet it has become one of the defining characteristics of today’s resale market.

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The Numbers Tell an Uncomfortable Story

Recent resale data paints a sobering picture.

Numerous projects within this three-to-five-year age bracket have recorded annual price growth of approximately 1% to 2%.

At first glance, any positive growth sounds encouraging.

After all, profit is profit.

Or is it?

Let’s examine what those numbers actually mean.

Suppose your condominium is worth S$1.5 million.

A 1% increase equals approximately S$15,000.

Most homeowners would celebrate.

“My property just made fifteen thousand dollars.”

But that calculation ignores almost every cost involved in owning the property.

And this is precisely where the optical illusion begins.

Because the headline appreciation is only one side of the equation.

The other side is far more important.

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The Hidden Bleed That Most Buyers Never Calculate

Imagine purchasing a resale condominium today.

The previous owner hands over the keys.

Everything looks fine.

You move in.

Or so you think.

Reality usually unfolds very differently.

Most buyers immediately begin renovating.

The flooring doesn’t suit their taste.

The kitchen feels dated.

Bathrooms need updating.

Built-in wardrobes no longer fit modern lifestyles.

Lighting changes.

Electrical rewiring.

Painting.

Carpentry.

Plumbing.

Even relatively modest renovations today can easily cost between S$50,000 and S$80,000.

Higher-end renovations regularly exceed six figures.

Now revisit the earlier example.

Your property appreciated by S$15,000.

But your renovation cost S$60,000.

Without realising it, you have already consumed four years of capital appreciation before considering any other ownership expenses.

And the costs do not stop there.

They have only just begun.

Your Move

Singapore’s property market has become increasingly sophisticated.

The strategies that worked ten years ago may not deliver the same results over the next decade.

Before making your next property decision, ask yourself:

✅ Am I preserving wealth or trying to create it?

✅ Have I calculated my true net return after every ownership cost?

✅ Does this purchase support my long-term financial goals?

✅ Am I buying based on evidence, or simply following conventional wisdom?

The right property is rarely the one everyone else is talking about.

It’s the one that best aligns with your wealth-building strategy.

If you’re considering your next move, whether it’s a resale condominium, a new launch, upgrading from your HDB, or restructuring your property portfolio, I’d be happy to have a conversation.

Sometimes, a single shift in perspective can change the trajectory of your financial future.

This is M. (Mike Chin)

Helping Singaporeans make smarter property decisions through data, strategy, and long-term wealth planning.

📩 Connect with me for a personalised property consultation.

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