Why Are New Launch Condo Prices So High? Where the Money Goes

Ask three agents why new launch prices keep climbing and you will hear the same answer: land is expensive. That is true, but it covers only part of the bill. On the ratios we use at AI Property, the land price makes up about half of what a developer spends before profit. The rest goes on fees, construction, marketing, financing and government charges that never appear on a brochure.

This guide lays out each cost line, then walks through a worked example so you can sanity-check any launch price yourself.

What goes into the price of a new launch condo

Developers buy most of their sites through Government Land Sales (GLS) tenders, where price is the main deciding factor. The winning bid is the starting point, and every other cost stacks on top of it.

Land is quoted in dollars per square foot of permissible gross floor area, known as psf ppr. It lets you compare a site's cost directly with the psf on a new launch price list.

The cost stack, line by line

We express each cost as a share of the land price. Here is how a typical project adds up.

Add the lines and a developer's breakeven sits at about 206% of the land price. The profit mark-up then goes on top of that total, not on the land alone.

Worked example: from land price to launch price

Say a site is won at $1,000 psf ppr. This is a round number for illustration, not a real project.

A $1,000 psf ppr site points to a launch price of roughly $2,369 to $2,472 psf. As a rule of thumb, that is 2.4 to 2.5 times the land price.

Look at where the money sits. Land is about 49% of the developer's cost and roughly 40% of the final launch price. Construction is about one fifth. Fees, taxes, marketing, financing and levies add roughly 23% to 24% that most buyers never see itemised, and the developer's profit makes up the remaining 13% to 17%. The numbers are shown as a range because they move with the mark-up you assume.

How to use this when you shop

• Start with the tender price. Find the GLS price psf ppr for the site, then multiply by 2.4 to 2.5 to get a rough range for the launch psf. The land rate is listed on our project pages, for example Chencharu Close GLS.
• Ask about the gap. If the launch psf sits well above that range, find out why. A prime location, a higher specification or a smaller land parcel can all explain it. A vague answer should make you ask again.
• Check the phase. Developers can change prices between phases, so compare the psf of the units you are offered with the launch range, not only the headline average.

Where this model falls short

We state every cost as a share of land price, so the model assumes costs rise and fall with the site. Real construction costs depend on specification, materials and labour, not on what the developer paid for the land. Treat the ratios as a guide for a typical project and not as a forecast for any single launch.

Frequently asked questions

How much of a new launch condo's price is land?

On our ratios, land is about 49% of the developer's cost before profit and roughly 40% of the launch price.

How do developers calculate their breakeven price?

They add up every project cost, including land, construction, financing, fees, taxes and marketing, and divide the total by the gross floor area. The launch price is that breakeven figure plus a profit margin.

Why are new launches priced higher than resale condos?

A new launch is priced from today's land price, today's building costs and the developer's margin. A resale unit is priced by what buyers will pay for an existing home, which may carry an older, lower land cost.

What does psf ppr mean?

It is the price per square foot of permissible gross floor area. It is the standard way to compare land costs between sites.

See live prices on AI Property

Use the multiplier above as a first check, then compare it with live price lists and available units for new launches on AI Property.