How Do I Know If I'm Overpaying For A Condo?

"Overpaying" is used loosely, usually to mean "more than I hoped to spend". Those are different problems with different solutions. This article is about the first one.

Start with transacted prices, not listings

An asking price tells you what a seller hopes for. A transacted price tells you what a buyer agreed to.

For private property, transaction data is published based on caveats lodged. For HDB, resale prices are published directly. Both are free, both are official, and both should be open in front of you before you discuss price with anyone.

Then adjust — deliberately, and in writing

Two units in the same project can justifiably transact at meaningfully different prices. What you are doing is explaining the gap, not pretending it does not exist.

The adjustments that genuinely matter:

• Floor level. Higher floors generally command more, with the premium varying by view and by how much the view actually changes with height.
• Facing and orientation. Afternoon sun on the main bedroom is a real cost of living there. So is facing a main road.
• Size and layout efficiency. Two units of identical size can have very different usable space. Long corridors and awkward bay windows are paid for and not used.
• Age and condition. A unit renovated last year versus one needing a full overhaul — value the difference at what the work would actually cost you, not at what it cost the seller.
• Tenure. Freehold versus leasehold, and for leasehold, how much lease remains. This matters increasingly as the remaining lease shortens.
• Stack and position within the project. Facing the pool, facing the carpark, next to the lift lobby, above the bin centre. These are real and they persist for as long as you own the unit.

Write your adjustments down. If you cannot justify the gap between your comparables and the asking price using adjustments you would defend out loud, you have your answer.

Expensive is not the same as overpriced

This distinction resolves most of the anxiety.

Overpriced means the price is out of line with what comparable units have transacted at, without adjustments that explain the gap. That is a market judgement, and the data can support it.

Expensive means the price is high relative to your budget or your comfort. That is a personal judgement, and no amount of transaction data resolves it.

A unit can be fairly priced and still wrong for you. A unit can be a relative bargain and still be a bad purchase, if servicing it leaves you no room.

The questions worth asking before you commit

1. What have genuinely comparable units in this project transacted at in the last six to twelve months?
2. What explains the gap between those and this asking price?
3. How many similar units are currently listed in this project? If yours needs to sell, who are you competing with?
4. What is the remaining lease, and how will that read to a buyer in ten years?
5. Does the monthly commitment work at a stress-tested rate rather than today's rate?

If you are buying a new launch

Comparables work differently. You are benchmarking against other recent launches in the area and against the surrounding resale market, while accounting for the fact that you are buying something that does not yet exist.

The useful discipline: ask what the completed project would need to be worth for the purchase to make sense, then ask whether comparable completed projects nearby are anywhere near that. If the gap is large, the question is what specifically justifies it — and "it is new" is not a full answer.