Popular Condos: A 5-year post-launch analysis
By Elizabeth Choong
/ EdgeProp Singapore |
The most profitable transaction for Treasure At Tampines was a five-bedroom unit that earned the seller a profit of $676,000. (Photo: Samuel Issac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) – Some condos were the talk of the town during their launch for various reasons, leading to outstanding new sales performance. This article examines the sale transactions in the secondary market of these developments to determine if their popularity during the launch translated to price growth and profitability thereafter.
The selected condos have many similarities
For the purpose of our analysis, we selected five condos: Avenue South Residence, The M, Normanton Park, Treasure At Tampines, and Riverfront Residences. These developments were chosen due to their stellar performance during their launch, with each selling at least 200 units over the launch weekend. All five condos also obtained their temporary occupation permit (TOP) last year.
In addition to their outstanding take-up rate during launch and TOP date, it is noteworthy that all five condos have a 99-year leasehold tenure. With the exception of The M, all developments are massive projects with over 1,000 units. Moreover, only Treasure at Tampines and Riverfront Residences are not situated in a central location.
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Most of the units sold in the secondary market for the five condos are considered sub-sales. According to URA, sales for units in projects that have obtained their TOP but not their Certificate of Statutory Completion (CSC) are considered sub-sales. Transactions will be classified as resales by URA once the project has received both TOP and CSC.
Riverfront Residences: Benefited from launching before cooling measures
Riverfront Residences benefited from being launched just before the increase in Additional Buyer’s Stamp Duty (ABSD) rates and the tightening of the Loan-to-Value (LTV) ratio in July 2018. The developer moved the launch date forward by two days to July 5, 2018, so that buyers could benefit from the transitional provision. If an Option to Purchase (OTP) was granted by sellers to potential buyers on or before July 5, 2018, and there has been no variation to the OTP on or after July 6, 2018, the buyer could enjoy the lower ABSD rates before the upward adjustment. This benefit is applicable if the OTP is exercised on or before July 26, 2018, or the OTP validity period, whichever is earlier.
The earlier launch date likely motivated many buyers to sign on the dotted line to avoid the higher ABSD rates, resulting in more than 500 sales for Riverfront Residences during its launch. Riverfront Residences is the only development among the five condos cited in this article to have been launched before the cooling measures were implemented in July 2018.
The proximity of the development to several primary schools, including the reputable CHIJ Our Lady of Nativity and Holy Innocents’ Primary School, also gave a boost to sales. Other nearby amenities include Hougang MRT Station, Hougang Central Bus Interchange, Kang Kar Mall, The Midtown, and Cheng San Public Library. Furthermore, the development overlooks Sungei Serangoon, allowing residents to enjoy excellent water views.
The average price for Riverfront Residences has increased by 28%, rising from $1,311 psf (based on 660 new sales) during its launch in 3Q2018 to $1,681 psf (based on 38 sub-sales) in 4Q2023.
There are three other condos located within a 500m radius of Riverfront Residences. Among them, Rio Vista, located along Upper Serangoon View, is the newest (TOP in 2004) and largest (716 units).
From 3Q2018 to 4Q2023, Rio Vista displayed a stronger price growth of 32% compared to Riverfront Residences (28%). The average price for Rio Vista has consistently trended below Riverfront Residences. As of 4Q2023, Rio Vista commanded an average price of $1,106 psf, which is $575 psf below Riverfront Residences ($1,681 psf). The stronger price growth and significantly lower average price for Rio Vista make it a worthwhile consideration for buyers with a modest budget who are willing to overlook its age.
As of the current writing, Riverfront Residences had 299 profitable transactions and no unprofitable ones, with profits ranging from $22,000 to $810,000. Notably, the top three profitable transactions for Riverfront Residences have significantly higher profits than those for the other four condos. This could be attributed to Riverfront Residences having the strongest price growth among the five condos.
Massive Treasure At Tampines
Treasure At Tampines made a splash when it was launched in March 2019, due to its massive size with 2,203 units. During its launch, 272 units were sold, translating to a take-up rate of 56% based on the 490 units released for sale and a take-up rate of 12% based on the total number of units in the development.
The outstanding sales performance could be attributed to the numerous facilities in the development and its proximity to various amenities in the well-established Tampines town centre. Additionally, Treasure At Tampines is within walking distance of Tampines Round Market and Food Centre, and is located within a 1km radius of five primary schools and two secondary schools. The condo is also conveniently located near the Pan Island Expressway.
As of the current writing, there have been 205 sales in the secondary market for Treasure At Tampines, comprising three sub-sales in 2021 and 22 sub-sales in 2022. Last year, Treasure At Tampines had 167 sub-sale and 13 resale transactions.
The average price for Treasure At Tampines has increased by 26%, rising from $1,336 psf in 1Q2019 (based on 270 new sales) to $1,676 psf in 4Q2023 (based on 54 transactions in the secondary market).
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There are no other condos within a 500m radius of Treasure At Tampines, but there are four condos within a 1km radius. Among these, the 99-year leasehold My Manhattan is the newest development, having obtained TOP in 2014. My Manhattan features 301 units and is located along Simei Street 13.
From 1Q2019 to 4Q2023, the average price for Treasure At Tampines grew by 26% to $1,679 psf, showing significantly stronger growth than My Manhattan, whose average price grew by 15% to $1,495 psf. Furthermore, the average price of Treasure At Tampines has consistently trended above My Manhattan, which could be attributed to its age.
As of the current writing, there were 205 profitable and no unprofitable transactions for Treasure At Tampines, with profits ranging from $58,000 to $676,000. It is notable that the top three profitable transactions are for four or five-bedroom units. The demand for large units in Treasure At Tampines could be due to the limited number of such units in the vicinity, as there are only 628 four-bedroom and 184 five-bedroom condo units within a 1km radius.
Well-located Avenue South Residence
Avenue South Residence is a large project with 1,074 units and is located in District 3. During its launch in September 2019, a total of 276 units out of the 300 released for sale were successfully sold. The exceptional sales performance can be attributed to its central location and proximity to numerous amenities. There are three primary schools within a 1km radius, namely CHIJ (Kellock), Radin Mas Primary School, and Zhangde Primary School.
At the time of writing, South Avenue Residence has only 16 sub-sales in 2022 and 2023. Since its launch, the average price for Avenue South Residence has increased by 16% from $1,957 psf in 2019 (based on 413 new sales) to $2,267 psf in 2023 (based on 15 sub-sales).
As a result of the lack of nearby comparable leasehold condos, we compared the prices of Avenue South Residence with 99-year leasehold condos from the same planning area. From 2019 to 2023, the average price growth for Avenue South Residence (16%) has kept pace with leasehold condos in Bukit Merah (14%). The average price for leasehold condos has grown from $1,707 psf in 2019 to $1,947 psf last year.
As of the current writing, Avenue South Residence has had 16 profitable transactions and no unprofitable ones, with profits ranging from $65,500 to $377,800. Notably, two of the three most profitable transactions were done in 2019 when the average price for the development was $1,957 psf.
The M: In the heart of Bugis
When The M was launched in February 2020, approximately 70% of the units were sold. The high take-up rate was attributed to the development's location in the heart of Bugis and its proximity to Bugis and Esplanade MRT Stations. Furthermore, the thoughtful details provided by the developer, such as flexible furniture that enables owners to conveniently work from home, have proven to be popular with buyers. In line with the lack of primary schools within a 1km radius, 64.9% of the units are smaller units that are 400 to 600 sq ft in size.
As of the current writing, only three sub-sale transactions have taken place for The M and all of them took place last year. The units were sold at prices ranging from $2,570 psf to $2,897 psf, surpassing the average price of $2,443 psf recorded in 1Q2020 when the project was initially launched. Since then, the average price for The M has experienced a substantial growth of 19%, reaching $2,900 psf in 4Q2023.
There are two leasehold condos within a 500m radius of The M. The 219-unit Midtown Bay is expected to be completed in mid-2024, while the 558-unit Midtown Modern is expected to be completed in 3Q2024. Midtown Bay is located along Beach Road, while Midtown Modern is located along Tan Quee Lan Street.
Since its launch in 1Q2020, the average price for The M has grown by 19% to $2,900 psf in 4Q2023, aligning with the 16% price increase over the same period for Midtown Bay.
Sales for Midtown Modern commenced in 1Q2021 at an average price of $2,774 psf, growing by 12% to $3,101 psf in 4Q2023. Over the same timeframe, average prices for The M and Midtown Bay grew by 10% and 6%, respectively. However, the average price for Midtown Bay is the highest among the three developments at $3,280 psf in 4Q2023.
All three sub-sales for The M proved to be profitable for their sellers. As of the current writing, there have been no unprofitable transactions for The M. Profits from the sub-sales range from $165,700 to $275,700.
It is notable that all three profitable transactions are for one or two-bedroom units that are likely to have been purchased by investors for potential capital gains. The units were sold just after three years from their purchase date, when the Seller’s Stamp Duty is no longer applicable.
Normanton Park: Ready tenant pool from nearby business nodes
During its launch weekend in January 2021, approximately one-third of the units in Normanton Park were sold. This is an impressive sales performance, especially considering that Normanton Park is a massive development with 1,840 condo units and 22 landed units.
The development garnered popularity among buyers due to its attractive location near one-north, Singapore Science Park, National University Hospital, and the National University of Singapore. Normanton Park's proximity to these business nodes provides investors with a ready tenant pool. Furthermore, there are no other condos within a 500m radius.
The average price for new sales in the development has been on an upward trajectory since its launch, growing by 6% from $1,766 psf in 1Q2021 to $1,869 psf in 3Q2022. As of the current writing, there have been only two sub-sales for Normanton Park, transacting at slightly higher prices of $2,000 psf and $2,144 psf last year. The average price for the development has grown by 21% since its launch.
Source: EdgeProp Market Trends (as at 8 January 2024)
Kent Ridge Hill Residences is the only other 99-year leasehold condo within a 1km radius of Normanton Park. Located along South Buona Vista Road, Kent Ridge Hill Residences features 498 condo units and 50 landed units. Similar to Normanton Park, Kent Ridge Hill Residences also obtained TOP last year.
The average prices for both developments have consistently remained at a similar level. However, Normanton Park has displayed stronger price growth. From 1Q2021 to 3Q2023, the average price for Normanton Park grew by 21%, compared to 12% for Kent Ridge Hill Residences. The weaker price growth for Kent Ridge Hill Residences could be attributed to increased competition, with 16 other condos within a 500m radius. Furthermore, Kent Ridge Hill Residences is farther away from one-north.
As of the current writing, there are two profitable transactions and no unprofitable transactions for Normanton Park. It is notable that the seller of the most profitable unit purchased it during the month of the project's launch.
Conclusion
After analysing the five condos, we can conclude that new condos that are popular with buyers during their launches tend to be well-located and attractively priced. Some also have unique features, such as the flexible furniture in The M.
Based on the absence of unprofitable sub-sale and resale transactions, it seems that such developments tend to be profitable, at least during the period when they receive their TOP. Furthermore, with the exception of Riverfront Residences, the developments have shown stronger prices than their respective neighbours over the same timeframe. This implies that buyers of such new developments are more likely to earn profits when they sell than if they had purchased a unit in a neighbouring development.
Check out the latest listings for Normanton Park, Treasure At Tampines, Riverfront Residences, Avenue South Residence, The M properties
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