Suburban property prices surpass in Q4 and show the largest resale gain.
The data revealed that three of five of the biggest money-making transactions by volume were made in the city fringe Rest of Central Region. Another was done in OCR, while the third one took place in CCR. Sellers made profits of up to 71 percent.
SUBURBAN properties and those on the city edge were most profitable for resale at the end of 2023. These deals outperformed prime residential property transactions, which are usually marked by large gains.
Clementi Park’s condominium unit that was sold in November generated the highest profit in Q4 by volume. The seller left with a profit in excess of S$2,000,000 after less than six years.
The condo unit with 3,068 square feet in District 21, Outside Central Region, was purchased by the buyer for S$2.8m or S$913 sq ft at October 2017 price. The data shows that the unit sold in November 2016 for S$4.8M, representing a profit of 9.2 percent.
The CCR still commands a premium over suburban and peripheral areas, which may mean that outperformance in these areas is not sustainable. Although the price momentum should continue at a moderate speed (in RCR & OCR), the CCR may offer laggards opportunities due to the narrowing of the price gap.
The CCR is a sector that typically records big gains in resale due to its higher current prices and larger unit size, according to research analyst.
But the Q4 results reflect the superior performance of both the RCR & OCR markets. CCR price rose by only 8 per cent during the same time frame.
Four out of five transactions with the highest profit margins were made in OCR. Only one transaction took place in RCR. Gains ranged anywhere from 102 to 121%. Treasure Crest in District 19 is a 99 years leasehold executive condominium. Four units at Treasure Crest were held on average around seven year before being sold. The profit was high. EC resale has been one of the most profitable deals in the past quarters.
The 2,368 sq. ft. unit in the Marina Bay Residences of District 1 had the largest amount and percentage of red ink. The 99 year leasehold unit, which was purchased in March 2014 for S$9.3million (S$3,923psf), sold in October 2023 for S$6.9million (S$2,914psf). The loss is 26 percent, or S$2.4million. On the basis of a nearly 10-year holding period, this seller had incurred a loss of approximately 3 per cent annually.
The percentage of secondary market transactions with losses for both landed products and non-landed products remained very low in Q4. Loss-making sales fell from 3.1 percent to 2.9 percent of all transactions, from 4.5 percent in the last quarter. In Q4 2020, 8.2 % of all deals were loss-making.
Top of the list was a 2,045 sf unit at Wing Fong Building. It is a mixed-use commercial and residential building. The unit traded for S$1.9m (S$919 psf) in October of 2023. This is 121 percent more than the S$850,000 ($416 psf) the seller paid to purchase the property in 2012. In February 2012, the seller paid $850,000 for the property or $416 per square foot. This is a 121 percent increase.
The two most popular transactions (excluding ECs), by percentage, were for properties that are freehold or 999 years leasehold, and which command a premium.
The deals that caused the most losses last year were all Prime CCRs purchased at various times in the market cycle.
In the fourth-quarter, caveats data on private homes accounted for 61 % of losses. RCR and OCR both accounted 21 percent of loss-making sales. However, 81% of the deals that were part of the CCR were profitable.
The low number of deals that resulted in losses in Q4-2023 was due to a combination of a high level holding power on the market as well as a resilient residential price despite increased interest rates. In 2024, with the economy expected to be more prosperous, it is anticipated that the overall level of losses-making deals will remain low.
The caveats apply to non-landed private residences with a purchase history from January 2012 through December 2023 that were purchased in Q4 2020. The five top deals by percent and value were ranked. This analysis excludes transaction fees and taxes like Buyer’s Stamp duty and Seller Stamp Duty.
