Resale Condo Developments – Is Your Property Appreciating, Depreciating or Simply Stagnant?

“When is the right time to sell?” This is a common question I receive from property owners. 

Some reasons to sell include: 

• Need for a bigger space
• To be close to your children’s schools (especially for Primary school registration)
• To cash out your gains and move to a smaller unit when your children are all grown up
• Need for family support, to be closer to parents or children

Needs aside, some of us can get complacent and stay put at our current residence. Some of us also hold on to investment units longer than necessary.

But what if the properties you own have been gradually depreciating or perhaps prices have been stagnant over the years?

Or perhaps your prices are appreciating but at a much slower rate as compared to other developments? 

Now let’s explore the performances of some developments in different parts of Singapore.  

Reflections @ Keppel

This iconic development has been a prominent landmark. While many have made huge profits from Reflections, who would have thought many more have made great losses as well. 

Truth be told, I always enjoy visiting reflections with its lush landscaping. Some units also offer stunning sea views, and its location along the Greater Southern waterfront makes it one of the more prominent development in the area. 

So great location aside, I truly believe in looking at data, and its performance so far has been telling. Unless you are absolutely head over heels in love with the development, there are many projects which have enjoyed healthier price appreciation from 2008. 

A 1852sqft unit snapped up for $3,210,000 in 2011 only fetched $2,500,000 ($1,350psf) in March 2020. 

A 1700+sqft unit bought at $3,816,000 ($2244psf) in 2007 was sold for just $2,725,000 ($1602psf) in Jan 2020.  That’s more than $1-million loss over a period of 13 years. (And we have not considered the costs of the interest from the property loan.)

A 1152sqft unit purchased at $2,396,000 ($2080psf) in 2007 transacted at a mere $2,000,000 ($1736psf) in April 2020. 

A more modest 893sqft unit bought at $1,525,000 ($1707psf) changed hands at just $1,460,000 ($1,634psf) in April 2020. 

If you think it’s just due to the COVID driving prices down during this period, let’s look at transactions done in previous years. 

Reflections @ Keppel – Transactions Before COVID-19

A 1701 sqft unit bought at $3.8M in 2007 was sold for $2.7M ($1602psf) in Jan 2020. 

Another 1077sqft units changed hands 3 times. It was first purchased at $1,755,000 ($1631psf) in 2007, sold at $1,833,000 ($1703psf) in Dec 2012 and again to another buyer for $1,699,000 ($1579psf) in Oct 2018. 

Yet another smaller 1012sqft unit which was also saw 3 transactions was first sold at $1,530,000 ($1513psf) in 2007, then $1,415,000 ($1399psf) in Jan 2012 and again for $1,480,000 ($1463psf) in 2017. 

To be fair, there have been units that made profits too. 

A 1324sqft unit sold for just $2,018,000 ($1525psf) was sold for a profit at $2,500,000 ($1,888psf) in Feb 2012. 

A 1152sqft unit bought at $1,950,000 ($1693psf) in 2011 found a buyer at $2,070,000 ($1797psf) in May 2018. 

And also units that like a 1292sqft unit which was sold for the same price at $2,900,000 ($2,245psf) in both 2011 and later in June 2015 (no profits). 

Jervois Jade – Transaction Data

This is a small 99-year leasehold apartment in the popular River Valley/ Jervois enclave in District 10.

Unlike Reflections, most of the buyers who bought directly from the developer at around 2001 have made profits and those who held on to their units for about 10 years have seen an almost 50% increase in value.

However, like many aging leasehold properties, prices have stagnated in recent years.  

Price Stagnation Starts To Occur As Development Starts To Age

A 1141sqft unit bought at $1,310,000 ($1148psf) in 2012 was sold at a loss at $1,195,000 in Sep 2018. 

A 1045sqft unit sold for $1,220,000 ($1168psf) in 2012, only transacted at $1,110,000 in Feb 2017. 

Another 1141 sqft was sold at $1,080,000 ($946psf) in 2010 and resold at a profit for $1,155,000 ($1012psf) in Nov 2019.

While the owner made a profit of $75,000, he held on to it for more than 9 years, so the gains is really very modest for a real estate investment, and lesser if you considered the miscellaneous fees (stamping/ legal fees) etc. involved. 

A bigger 2057sqft transacted at $2,170,000 ($1055psf) in 2012.

A few years down the road, two other bigger units went at $2,200,000 ($1070psf) for a 2056sqft unit in June 2018 and $2,180,000 ($960psf) for a 2271sqft unit in Jan 2019.  

One of the highest psf clocked was for a 1496sqft in June 2013 at $1,800,000 ($1203psf).

Sadly two similar 1496sqft on higher levels changed hands for $1,705,000 ($1140psf) in 2018 and $1,796,000 ($1200psf) in March 2016.

In 2019, a low floor 1496sqft was sold at $1,660,000 ($1012psf). 

Given these data, buyers who are keen on capital appreciation may like to give this a miss.

Having said that, the entry price for a 3-bed in the $1.7m range would still make this an attractive development for someone seeking a home in this area. 

Costa Del Sol

I would like to show through this development that you do not always need to purchase a brand new project to make good profits.

Like the above 2 projects, Costa Del Sol is a also 99-year leasehold property but in District 16 (which some might think is less prestigious). However, the numbers will surprise you! Like Jervois Jade, first time owners have made sizeable profits, but so has most of the subsequent buyers who bought resale units. 

To illustrate my point, I’ve selected units that have changed hands at least 3 times:

A 1227sqft resale unit was sold for $792,000 ($646psf) in 2007 and very quickly for $960,000 ($782psf) in the same year 4 months later. In 2010, it transacted for $1,150,000 ($937psf) and changed hands in Feb 2018 for $1,450,000 ($1182psf). 

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 A 1346sqft unit was first bought from the developer at $996,000 ($740psf) in 2001, and sold for $1,200,000 ($892psf) in 2007 and again in 2011 for $1,390,000 ($1033psf). 

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A resale 1313sqft unit went for $805,000 ($613psf) in 2006, and sold for $1,020,000 ($777psf) in May 2007 and again in the same year at $1,250,00 in November. Then in March 2013, it changed hands again for $1,630,000. 

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A 1754sqft unit, purchased from the developer for $1,577,000 ($899psf) in 2002 was sold for $1,880,000 ($1072psf) in Sept 2009 and again for $2,350,000 ($1339psf) in June 2016. Excellent gain for the second owner but I do have my doubts if the third owner can continue to enjoy more profits if when he sells. 

This unit would take the cake in terms of capital appreciation – a top floor 1937sqft unit was bought at $1,409,000 ($727psf) from the developer in 2002, and sold for $1,118,000 ($609psf) in Sept 2006.

A year later, it changed hands for $1,460,000 ($754psf) and again three years later for $1,830,000 ($945psf) in Sept 2010.

Again in March 2015, it transacted for $1,918,000 ($990psf) and again in July 2019 it went for $2,100,000 ($1084psf). While the gains in recent years have been modest, it speaks volume that all the owners made reasonable profits. 

For Costa Del Sol, some ground floor units have recorded losses or extremely modest price increase. This could be due to the fact that this project is coveted for its magnificent sea view. And the 2-bed units did not perform as well as the 3-bed and bigger units in recent years. 

A high floor 2-bed 947sqft unit was sold at $774,000 ($818psf) to the first owner, who made a good profit when he sold it for $1,280,000 ($1351psf) in May 2011. But the second owner made a loss when he sold it for $1,260,000 ($1331psf) in Sept 2019. 

Overall, this development has performed very well over the years.

In Feb 2020 (Start of COVID affecting Singapore), a 1346sqft unit went for $1.72m and a 1992sqft set a record high quantum of $2,350,000 ($1180psf).

Even in June 2020, a 1345sqft unit managed to fetch a respectable $1,650,000 ($1227psf), given it’s really quite a feat to transact during the lock-down period.  

Conclusion

There is a strong belief that buying a brand new development will surely help you make gains from appreciation value. This belief does come with some correlation as newer properties are simply more sought after.

That being said – the resale condo market still has its fans who love the spacious layouts – unlike the economically-sized new launch units.

Back then, developers were more generous with the layouts.

The fact also remains that you can move in immediately while for new launch developments – you have to wait at least 3-4 years before it is completed. So that is additional cost if you have to find a place to rent first in the meantime.

There is still opportunities available in the resale condo market as you can see with my Costa Del Sol example. But you really need to sit down and do your research.

When you are the 3rd owner or even the 4th owner – you have to be prepared for the fact that you might not be able to make as much gains.

If you are keen to cash out from your aging condo development or simply exploring your choices in the Singapore property market – I invite you to contact me for a no-obligation consultation.