The TOP effect: how a condo’s price re-rates after completion
- A just-completed project (0–2 yrs past TOP) trades about +16% vs a mature one nearby — and it fades with age.
- The launch newness premium is a wasting asset: highest at handover, eroding as the block ages and newer launches arrive.
- Measured on freehold-equivalent $psf vs same-neighbourhood, same-year peers — so location, timing and lease don’t distort it.
- Best for: deciding whether to pay the new-launch premium, or buy mature resale where the decay is already taken out.
Does a condo re-rate after it completes?
New launches sell at a big premium (our new-launch study puts it near +38% like-for-like). The question here is what happens after keys are handed over: does that premium hold, or does the project drift back toward the pack as it ages? We track freehold-equivalent $psf (lease stripped out) relative to same-neighbourhood, same-year peers (nearby projects, not a whole district), by years since TOP.
| Years since completion (TOP) | Price index | vs mature | Resales |
|---|---|---|---|
| 0–2 yrs | 116 | +16 | 2,769 |
| 3–5 | 110 | +10 | 10,056 |
| 6–10 | 103 | +3 | 26,383 |
| 11–15 | 100 | +0 | 11,784 |
| 16–25 | 93 | -7 | 15,326 |
| 26+ yrs | 90 | -10 | 7,267 |
Why it happens
Three forces pull a fresh project’s $psf down over time: physical ageing (dated finishes, rising maintenance), the arrival of newer competing launches that reset what “new” costs, and the simple fact that the first resale cohort no longer pays the developer’s launch premium. The decline is steepest in the first several years, then flattens as the project becomes ordinary resale stock.
Investor verdict
If you buy at or just after launch, budget for the newness premium to bleed off in your first hold — you need genuine location or supply-driven growth to more than offset it. If you buy mature resale, you have already skipped that decay: you are paying closer to the land-and-location value, with the depreciation someone else absorbed.
The sweet spot for many investors is a project past its newness fade but not yet old — roughly the 6–15-year band — where the launch premium is gone but maintenance and lease are still comfortable.
How to use this before you buy
Discount the launch premium in your model
If you buy new, assume a chunk of today’s $psf is a fading newness premium — your growth has to clear that hurdle first.
Prefer mature resale for value
A 6–15-year-old project in a strong location often gives you the same address at a price the depreciation has already been taken out of.
Check the pipeline nearby
A fresh block ages faster in $psf terms when new launches keep arriving next door — see the supply tracker.