45 new profitable condos since 2017: 6 key things you can learn from the numbers

As we reach the end of Q3 2023, more homes are finally being finished, and new cooling measures are starting to bite. This will no doubt have an effect on sales eventually, but for now, it seems as if those who bought earlier for the first batch of new launches from 2017/18 will be happy with their decisions indeed.

From the superior performance of larger units to the unexpected edge of subsales over resales within a four-year holding period, the insights here may provide both buyers and sellers with useful context for their next move.

Dive in as we explore the metrics, delve into the nuances of District 5's top performance, and understand the subtle differences in gains across various floor levels. Whether you're an investor, a first-time buyer, or just keenly interested in property trends, this review offers a detailed snapshot of the current condo market landscape.

Here are the profitable ones so far:

Profitable new launch condos to date

1. Larger units tended to perform better

In general, larger units tended to do better. And we aren't talking in terms of average $ gain (because that would be obvious), but from a percentage gain. This isn't really a surprise, as it's been part of a trend we've seen over the last few years.

Given current prices, it's rare for a condo buyer to be a first-time buyer. More commonly, buyers are those who have upgraded from HDB properties, and are riding on record-high resale flat prices. As these buyers also tend to be families, there's a marked preference for larger units.

One of the realtors we spoke to also had another explanation:

"Five-bedders are usually the most expensive units. Buyers who can afford these units are usually high-flyer types, who are maybe not as price-sensitive. If they really want a unit, they are willing to buy even TOP units at higher prices, or buy subsales. They are not really interested in gains. Some are even moving from landed properties, so they are used to a certain amount of space."

2. Subsales beat resales within a 4+ year holding period

Type of Sale	Holding Period (Years)	Average $ Gain	Average per cent Gain
New Sale to Resale	4.37	$238,639	18.63per cent
New Sale to Sub Sale	3.71	$240,959	19.13per cent

This isn't common, but the gains for new sales to sub-sales won out by a slim margin (a difference of half a percentage point). Usually, new sales to resale will tend to do a bit better just because it would typically be a longer holding period.

Given the very slight gap, however, this is likely just a quirk; and one for which we don't see any discernible cause.

We wouldn't count on it to happen very often.

3. North and West regions saw the highest percentage gains

Region	Volume	Holding Period (Years)	Average $ Gain	Average per cent Gain
Central Region	492	3.8	$291,601	19.7per cent
East Region	156	3.7	$176,399	17.2per cent
North East Region	310	3.9	$175,966	17.5per cent
North Region	4	3.9	$522,250	21.5per cent
West Region	82	3.4	$288,656	24.6per cent

Condos in the North and West technically saw the highest percentage gains; but we need to consider the low volume of transactions. In the West region, for example, the strong gains were mostly on the back of Whistler Grand, rather than being indicative of the region as a whole.

Whistler Grand was a rather fast-selling project (100 per cent of available units sold on launch weekend), and CDL had initially priced lower in response to recent cooling measures. This has helped the early phase buyers to recognise stronger gains.

If we take into account the volume, then Central region condos have also seen strong results. Parc Esta may be the driving force behind this:

Parc Esta sold fast from the beginning (73 per cent of available units sold on launch weekend), and several eager buyers may have failed to secure a unit. Given the condo's location (next to Eunos MRT, and one stop from Paya Lebar Quarter), it's not surprising if latecomers made high offers for whatever they could get.

4. Leasehold properties generally fared better

Volume	Holding Period (Years)	Average $ Gain	Average per cent Gain
31	3.3	$486,660	15.6per cent
1013	3.8	$233,177	19.2per cent

This isn't unexpected, given that freehold only shows its advantage over long holding periods. Over a short time period like four years, freehold tends to fare worse than leasehold, as buyers paid a high premium to begin with.

That said, do note that freehold has a much lower volume of transactions (almost always the case, as there are far more leasehold than freehold land parcels). Even if the transaction volumes were comparable though, we'd bet on the leasehold properties outperforming freehold.

5. District 5 fared best overall

District	Volume	Holding Period (Years)	Average $ Gain	Average per cent Gain
5	85	3.6	$276,925	24.3per cent
14	133	3.6	$284,378	22.7per cent
27	4	3.9	$522,250	21.5per cent
20	63	3.7	$306,129	21.5per cent
3	98	3.8	$283,474	21.4per cent
9	34	4.2	$483,624	18.7per cent
13	82	4.0	$236,400	18.0per cent
19	310	3.9	$175,966	17.5per cent
18	142	3.8	$176,409	17.2per cent
17	13	3.5	$149,477	16.2per cent
21	43	3.6	$233,209	15.8per cent
23	3	2.3	$164,729	15.0per cent
11	1	3.4	$255,000	14.0per cent
15	9	3.6	$228,108	13.2per cent
10	13	3.6	$696,054	12.7per cent
7	4	2.7	$171,630	11.1per cent
2	5	3.2	$144,324	6.3per cent
1	2	4.4	$60,125	2.1per cent

This coincides with some of the points we made above.

District 5 (Buona Vista, Clementi, Dover) topped the list, and this is likely due to Whistler Grand (see above). District 14 (Paya Lebar, Eunos, Geylang) came second, and this is probably on the back of Parc Esta's strong showing.

Do note that most of the stronger gains came from the OCR, except for District 5, which is in the RCR.

Prime regions such as the Orchard area (District 9) often feature luxury units, with less room for gains over such short periods; but some realtors have added that recent cooling measures will worsen gains here, in the years to come.

This is due to the new 60 per cent ABSD levied on foreigners, as well as higher overall stamp duties on second or third homes. Realtors opined that foreigners and investors make up a bigger share of buyers in the CCR; and going forward, there's an expectation of weaker gains in the region.

6. Gains across different floors are quite similar, though the high-floor units takes the lead

We categorised low, medium and high floors based on the following range:

Floor Range	Average per cent Returns	Volume
Low	18.01 per cent	303
Medium	19.08 per cent	579
High	21.06 per cent	157

• Low floors: 5 storeys and below
• Medium floors: 6th to 15th storey
• High floors: above 15 storeys

From the profitable transactions so far, high-floor units had the highest returns so far — albeit marginally, at 21.06 per cent.

This could be due to the fact that condos with high floors tend to have more units and so the odds of a boutique development being inside the data is reduced. In addition, Boulevard 88 which saw stellar gains form two out of the 157 data points here. While it's insignificant in volume, the gain from the sale is pretty substantial.

As such, the data here may have little to do with gains from floor range but simply have more projects that are profitable.

Overall, we can see that most new launch buyers would be sitting on profits, even if they sold as sub sales or very soon after the launch. This is mostly a matter of timing, as the post-pandemic period has been characterised by a notable housing shortage. It's uncertain if we'll see a repeat performance next year, however, as the combination of higher interest rates, new cooling measures, and gradually increasing supply kick in.

ALSO READ: Is the property market going to slow down? 5 reasons why only 53 new units moved this weekend

This article was first published in Stackedhomes.