Are ground-floor condo units less profitable in Singapore?

In the Singapore property market, most people would gravitate towards a higher floor unit. This is even clearly reflected in developer pricing, where we expect that the higher floor units will come at a premium.

But we've also discovered that some contrarian buyers prefer ground floor units — and besides benefits like a lower quantum, many have cited experiences where their ground floor units have performed better than the top floor neighbours.

While this may be true for certain developments (there are projects where the ground floor units have special features like high ceilings, etc), this may not be representative across the board. Let's take a closer look to see what the numbers tell us:

First, let's look at the number of ground-floor unit transactions

We started by picking out all the transactions for level 1 units, between 2014 to 2024. We should clarify there may be some inaccuracies in this approach, as level 1 is not always the ground floor for every condo; but it's true enough for the vast majority.

We found that over the past 10 years, ground floor units make up a small number of transactions; just around five per cent of the total:

Although such a large general comparison doesn't help much, do note that the average quantum of ground floor units is actually a little bit higher.

Next, we did a comparison between the types of sales. 

There may, for instance, be a difference between ground floor units that are bought during developer sales and then resold (new-to-resale), versus those bought from other owners and sold again (resale-to-resale).

One of the factors here is that, quite often, developers charge less for ground floor than higher floor units, which could lead to greater room for appreciation. 

	Avg Gains ($)		Avg Gains (per cent)		Volume
Type of Sale	NOT GROUND	GROUND	NOT GROUND	GROUND	NOT GROUND	GROUND
New Sale to Resale	$290,135	$265,242	29.6per cent	28.6per cent	11,964	531
New Sale to Sub Sale	$234,402	$190,318	19.1per cent	16.3per cent	4,054	113
Resale to Resale	$297,629	$314,219	21.8per cent	23.8per cent	11,028	786
Sub Sale to New Sale	$331,560		12.1per cent		1
Sub Sale to Resale	$129,841	$176,355	11.8per cent	16.7per cent	749	47
Sub Sale to Sub Sale	$164,931		17.0per cent		10
Average	$280,001	$281,787	24.4per cent	24.6per cent	27,806	1,477

Indeed, there's a slight improvement to gains for ground floor units, in new-to-resale (28.6 per cent), versus resale-to-resale (23.8 per cent). 

What we didn't expect, however, was for the difference to be so marginal. This suggests that, regardless of whether you buy new or resale, there's very little difference in gains between the ground floor and higher units. 

Next, it could be that the region makes a difference. Would a ground floor unit in a prime central region, such as District 9 or 10, perform differently from ground floor units in more mass-market and fringe regions? 

We took a look, and again, we maintained the comparison between new-to-resale and resale-to-resale for each region:

	Avg Gains ($)		Avg Gains (per cent)		Volume
Region	NOT GROUND	GROUND	NOT GROUND	GROUND	NOT GROUND	GROUND
Central Region	$281,910	$301,147	18.0per cent	18.2per cent	10,623	423
East Region	$238,851	$238,165	21.8per cent	21.4per cent	4,404	342
North East Region	$279,608	$278,513	28.5per cent	27.3per cent	6,357	323
North Region	$320,495	$288,143	37.5per cent	34.3per cent	2,395	210
West Region	$300,777	$325,736	30.4per cent	30.7per cent	4,027	179
Average	$280,620	$282,745	24.5per cent	24.7per cent	27,806	1,477

Again, there's very minimal difference in most regions. The only notable gap was in North region properties, where higher floor units outperformed the ground floor by 3.2 percentage points. The North East region also saw higher floor units outperform by 1.2 percentage points. 

Everywhere else, the difference was less than a single percentage point; so perhaps you'll want to be more picky about higher floors, the further north or north east you go.

The most interesting results came when we compared by levels/floors

The horizontal axis shows the height (i.e., the further left on the graph, the higher the floor). The vertical axis shows the range of returns, as a percentage.

Note that transaction volumes are very low on the highest floors. Very few condos reach up to 50 storeys or more; and when you get to these topmost floors, you tend to end up with penthouse or premium units. These tend to be rare, one-off transactions, hence the lack of any range in the pricing. 

Among the lower floors, the price ranges are wider. But these gains are more uniformly distributed, and not clustered around a tiny handful of transactions. In general though, from the 25th floor and up, gains tend to be much more narrow. 

Looking at the top and bottom 25 levels, there's a visible difference in gains

Row Labels	New Sale to Resale	New Sale to Sub Sale	Resale to Resale	Sub Sale to New Sale	Sub Sale to Resale	Sub Sale to Sub Sale	Grand Total
25 And Above	16.6per cent	17.3per cent	13.9per cent	12.1per cent	9.1per cent	24.1per cent	15.7per cent
Below 25	30.4per cent	19.1per cent	22.2per cent		12.2per cent	15.2per cent	25.0per cent
Average	29.5per cent	19.0per cent	21.9per cent	12.1per cent	12.1per cent	17.0per cent	24.5per cent

With the exception of rare transaction types (e.g., sub-sale-to-sub-sale), those who bought below the 25th floor tended to see higher returns! An average gain of 25 per cent, compared to those who purchased on higher floors (15.7 per cent). 

Why would this happen? 

When we showed this to realtors, a common reason was that the topmost units in many condos are often penthouses, or other such premium units. These units are intended as indulgences for wealthy buyers, rather than investable assets. Coupled with the low transaction volume, it results in diminished gains. 

We suppose that's plausible. But to stick with the numbers we've found, we can draw the following conclusion:

Ground floor units do not see a substantially worse return than higher floor units. Any difference in gains is likely to be marginal and of little real impact. However, you may be interested in units below the 25th floor. Based on what we've found, units in this range tended to bring in higher returns. 

Speculatively, we'd reference our same theory from earlier: higher floor units tend to cost more from the start, and may just have less room for appreciation. 

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This article was first published in Stackedhomes.