ANALYSIS: Districts with the highest and lowest condo price growth

By Elizabeth Choong

/ EdgeProp Singapore |

February 7, 2024 2:56 PM SGT

The condos in CCR performed the worst, with average resale price growing a mere 11.6% from $1,975 psf in 2014 to $2,204 psf last year

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SINGAPORE (EDGEPROP) – The overall average resale price for condos in Singapore grew by 7.2%, increasing from $1,516 psf in 2022 to $1,625 psf last year, or by 33.6% from $1,216 psf in 2014. However, prices did not grow at the same pace across all regions or districts in Singapore. We examined the average prices of the different regions and districts to discover which areas experienced the highest and lowest price appreciation.

Weakest price growth for CCR condos

The average price for condos in the Core Central Region (CCR) grew by 11.6%, increasing from $1,975 psf in 2014 to $2,204 psf last year. In contrast, the average prices for condos in the Rest of Central Region (RCR) and Outside Central Region (OCR) increased by 25.8% and 33.9%, respectively, over the same timeframe. Last year, the average prices for RCR and OCR condos were $1,823 psf and $1,476 psf, respectively.

Source: EdgeProp Market Trends (as at 6 February 2024)

The weaker capital appreciation for CCR condos is likely to have affected developers' confidence, and possibly deterred them from submitting a bid for the government land sales (GLS) site at Marina Gardens Crescent. The tender closed last month with only one bid from a consortium comprising GuocoLand, Hong Leong Holdings, and TID, who submitted a bid of $770.46 million ($984 psf ppr). At the time of writing, the GLS site has not been awarded. However, there has been speculation by market observers about whether the bid price has met the reserve price.

Read also: Three-bedder at The Marbella sold at $2.5 mil profit

Source: EdgeProp LandLens (as at 5 February 2024)

In July last year, a consortium led by the Kingsford Group won the tender for the adjacent Marina Gardens Lane GLS site for $1.034 billion ($1,402 psf ppr), which is approximately 42.5% higher than the recent bid submitted for the Marina Gardens Crescent GLS site. A consortium led by GuocoLand submitted the second-highest bid of $727.04 million ($984 psf ppr) for the Marina Gardens Lane GLS site. This bid is also on par with their bid for the Marina Gardens Crescent site, whose tender just closed last month.

Why is CCR underperforming?

The number of foreign buyers fell in 2020 when COVID-19 first hit Singapore’s shores. It has not recovered to pre-pandemic levels because the additional buyer’s stamp duty (ABSD) rate was increased from 30% to 60% for foreign buyers in April last year. Only 290 resale condo units were purchased by foreigners last year, a significant decline from 411 units in 2022 and 669 units in 2018.

As the majority of the condo units in CCR are purchased by foreigners, the adjustment in the ABSD rate has a significant impact on demand and hence average prices for CCR condos.

The percentage of resale condo units in CCR that were purchased by foreigners hit a peak of 14.9% in 2019 before declining to a low of 8.6% in 2021 due to travel restrictions imposed during COVID-19. An improvement was seen in 2022 before the hefty increase in ABSD rate caused a plunge to a mere 7.6% last year. In terms of the number of units, foreign buyers accounted for 215 and 141 resale transactions in 2022 and 2023, respectively.

Average price on a decline for District 1

The disparity in price growth is even more obvious when the analysis is broken down by district. Only Districts 1, 2, and 7 saw a decline in their average resale prices from 2022 to last year. All three districts are part of the Downtown Core planning area and CCR.

The average resale price for condos in District 1 has been on a downward trajectory. The average price was $2,007 psf last year, down by 3.3% from $2,040 psf in 2014. The average price seems to have continued declining this year because the average price for the district stands at $1,934 psf at the time of writing. Furthermore, sales volume has declined from a peak of 284 units in 2020 to 188 units in 2022 and 144 units last year.

Source: EdgeProp Market Trends (as at 6 February 2024)

The poor price performance for resale condos in District 1 has had a negative impact on the profitability of the condos. Last year, there were 63 profitable and 67 unprofitable transactions for District 1.

Interestingly, The Sail @ Marina Bay had the most profitable and unprofitable transactions in the district. However, the number of profitable resale transactions (30 transactions) for the 1,111-unit condo still outnumbered the unprofitable ones (23 transactions). Profits ranged from $20,000 to $2.7 million, while losses ranged from $1,100 to $1.178 million. Among condos in District 1, The Sail @ Marina Bay had the highest sales volume last year.

Districts 2 and 7 faring better than District 1

The average resale prices for condos in Districts 2 and 7 have performed better than those in District 1. From 2014 to 2023, the average resale prices for Districts 2 and 7 have increased by 27.5% and 34.4%, respectively. In contrast, the average price for District 1 has dipped by 1.6% over the same timeframe.

Source: EdgeProp Market Trends (as at 6 February 2024)

Profitability for condos in Districts 2 and 7 was also better compared to District 1 because the two districts had fewer unprofitable transactions. Last year, District 2 had 40 unprofitable and 98 profitable transactions, while District 7 had six unprofitable and 63 profitable transactions.

Among the condos in District 2 with unprofitable transactions, Icon accounted for 32.5% of them with 13 unprofitable transactions. Losses ranged from $5,000 to $175,000. The 646-unit development is a short walk away from Tanjong Pagar MRT Station.

Duo Residences, with four unprofitable transactions, accounted for more than half of the unprofitable transactions in District 7 last year. Losses suffered by the sellers ranged from $20,000 to $64,000. Duo Residences also had 10 profitable transactions with profits ranging from $22,800 to $447,000. Duo Residences is directly connected to the dual-line Bugis MRT Station.

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Stellar price gains for Districts 6

From 2022 to last year, the average resale prices for condos in District 6 experienced the highest growth at 16.7%, compared to their counterparts in other districts. Districts 23 and 25 took second and third place with price growths of 11.3% and 10.7%, respectively.

There are currently only four condo developments in District 6, namely Eden Residences Capitol, High Street Centre, One North Bridge, and the uncompleted CanningHill Piers. High Street Centre and One North Bridge are small developments with 22 and 55 units, respectively. Likewise, Eden Residences Capitol is also a small development with only 39 units. However, Eden Residences Capitol (TOP in 2016) is much newer than High Street Centre (TOP in 2005) and One North Bridge (TOP in 2006).

As such, the recent boost in the average resale price can be attributed to Eden Residences Capitol because there have been no resale transactions for the other two completed condos after 2012. The resale price for District 6 is likely to receive another boost when unit owners in CanningHill Piers start selling their property in the resale market.

The North rules

Districts 23 and 25 are part of the North Region and OCR. Both districts have experienced the highest price growth after District 6. From 2014 to last year, the average resale price for condos in District 23 (49.6%) grew at a faster pace than the North Region (45.2%), while District 25 (24.5%) grew at a significantly slower pace. Furthermore, the average price for District 23 has been higher than the North Region since 2017, while the average price for District 25 has fallen below that of the region. In 2023, the average price for District 23 was $1,327 psf, higher than the North Region ($1,279 psf) and District 25 ($1,118 psf).

Source: EdgeProp Market Trends (as at 6 February 2024)

District 23 could have benefited from the slew of new projects in the vicinity, which attracted the attention of many potential buyers. When The Botany At Dairy Farm was launched in March last year, 187 units out of a total of 386 units (a take-up rate of 48%) were sold at an average price of $2,070 psf. During the launch weekend in July last year, 27% of the 408 units in The Myst were sold at an average price of $2,057 psf. The take-up rate for both developments has since increased to an estimated 61.1% for The Botany At Dairy Farm and an estimated 49.3% for The Myst.

The buyers' demand for the two newly launched condos has given a boost to resale prices for completed condos in the same district and enhanced the profitability of these completed condos. There were only seven unprofitable transactions in District 23 last year.

Among the completed developments in the district, Kingsford Hillview Peak (35 transactions) has the most profitable transactions, followed by The Hillier (33 transactions). Both developments are located adjacent to each other. The profitability of both condos is not surprising, given the young age of the developments. Kingsford Hillview Peak obtained TOP in 2017, while The Hillier obtained TOP in 2016. Both developments are also located near Hillview MRT Station, as well as CHIJ Our Lady Queen of Peace and Assumption English School. Furthermore, The Hillier is a mixed development with a retail podium.

Source: EdgeProp LandLens (as at 6 February 2024)

Profits for Kingsford Hillview Peak ranged from $1,000 to $265,680, with the top three most profitable transactions involving two or three-bedroom units of over 1,000 sq ft. Despite being sold at prices below the district's average of $1,327 psf, the top two transactions still yielded profits of approximately $203,000 and $266,000 for their sellers.

Profits for The Hillier ranged from $7,359 to $271,125. Unlike Kingsford Hillview Peak, the top three profitable transactions for The Hillier involved two-bedroom units of 840 sq ft. Furthermore, all three units fetched selling prices that were above the average price for District 23 and earned their sellers handsome profits of over $244,000.