Can “Ulu” Condos Still Be Profitable?

An ongoing assumption about condos is that, it is all about location location, and location. And while no one is really going to argue about the importance of that, it does make you wonder about the more obscure and less accessible plots. Given Singapore is so small and the addition of new MRT lines in the last decade, can even the more "ulu" condos still do well? Let’s take a look and find out:

Picking out some “ulu” condos

Let's start by saying that there isn’t a strict definition per se, but for the most part, we consider these to be condos with low accessibility to public transport (particularly MRT stations). As a related factor, areas that are far from train stations also tend to be more sparse in terms of amenities, as train stations are usually built near the neighbourhood hub.

We found that generally, these types of condos can be found in clusters around districts 17, 18, 23, 27, and 28. We also looked only at non-landed residential properties, which had resale transactions up till the end of 2017. We tracked their growth in (resale) price per square foot from 2013 to 2023. Doing it this way filters out new launches entering the resale market in the past 6 years, which would skew the apparent price and drastically change the annualised returns.

We also narrowed the ulu condos down to 62 condos across these districts. This is by no means an exhaustive list, as ulu can be subjective as well.

Here’s how they performed against the overall condo market between 2013 - 2023:

Freehold condos

Year	Not Ulu	Ulu Condos
2013	$1,420	$953
2014	$1,359	$892
2015	$1,358	$849
2016	$1,393	$810
2017	$1,461	$831
2018	$1,481	$878
2019	$1,506	$931
2020	$1,443	$909
2021	$1,564	$968
2022	$1,676	$1,075
2023	$1,753	$1,202
Annualised Returns	2.13%	2.35%

Leasehold condos

Year	Not Ulu	Ulu Condos
2013	$1,115	$805
2014	$1,060	$786
2015	$1,073	$926
2016	$1,179	$980
2017	$1,151	$973
2018	$1,187	$959
2019	$1,174	$983
2020	$1,138	$966
2021	$1,219	$1,003
2022	$1,328	$1,113
2023	$1,441	$1,225
Annualised Returns	2.60%	4.28%

In a general overview, a comparison between freehold ulu and non-ulu condos yielded minor differences in annualised returns. However, the ulu condos outperformed their more accessible counterparts when looking at leasehold condos only. One reason for this could be the fact that ulu condos are located in the OCR (Outside of Central Region) which outperformed the CCR (Core Central Region) over the past 10 years. However, this may not be the most accurate way to see things, as there could be different results when we go into specific districts. 

So instead, let’s compare specific districts versus the wider market, starting with District 17

These are the projects we considered 'ulu' in district 17:

Projects	District	Tenure
Le Loyang	17	999 yrs from 29/05/1885
Celadon View	17	999 yrs from 29/05/1885
Coastal Breeze Residences	17	99 yrs from 08/04/2008
Watercrest	17	999 yrs from 07/09/1885
Lighthouse	17	99 yrs from 08/04/1993
Sandy Palm	17	99 yrs from 21/03/1996
JLB Residences	17	946 yrs from 27/11/1937
Clydescove	17	999 yrs from 27/11/1884
Riz Haven	17	946 yrs from 01/01/1938
Bluwaters	17	946 yrs from 23/06/1938
Casa Pasir Ris	17	946 yrs from 01/01/1938
Bluwaters 2	17	946 yrs from 01/01/1938
Avila Gardens	17	Freehold
Estella Gardens	17	Freehold
Azalea Park Condominium	17	999 yrs from 12/10/1885
Carissa Park Condominium	17	Freehold
Ferraria Park Condominium	17	Freehold
Palm Isles	17	99 yrs from 14/09/2011
Parc Olympia	17	99 yrs from 25/01/2012
Dahlia Park Condominium	17	Freehold
The Gale	17	Freehold
Ballota Park Condominium	17	Freehold
Edelweiss Park Condominium	17	Freehold
The Inflora	17	99 yrs from 25/05/2012
Hedges Park Condominium	17	99 yrs from 28/07/2010

Leasehold comparison

Only 7 out of the 25 here are leasehold

Year	D17 Ulu Condos	All of Singapore
2013	$761	$1,113
2014	$809	$1,058
2015	$841	$1,071
2016	$1,009	$1,175
2017	$942	$1,145
2018	$945	$1,176
2019	$950	$1,166
2020	$937	$1,130
2021	$971	$1,207
2022	$1,091	$1,316
2023	$1,217	$1,433
Annualised Returns	4.81%	2.56%

Here we begin to see why leasehold ulu condos may have outperformed overall. If we focus on leasehold condos in District 17, we can see they significantly outperformed their leasehold counterparts in the overall market: a notable 4.81 per cent annualised return, versus 2.56 per cent across all leasehold projects in Singapore.

Comparison with freehold condos in District 17

Year	D17 Ulu Condos	All of Singapore
2013	$945	$1,420
2014	$894	$1,359
2015	$817	$1,358
2016	$789	$1,393
2017	$790	$1,461
2018	$835	$1,481
2019	$879	$1,506
2020	$844	$1,443
2021	$914	$1,564
2022	$1,015	$1,676
2023	$1,107	$1,753
Annualised Returns	1.59%	2.13%

In the case of freehold, the performance is the opposite. Since 2013, D17 ulu freehold condos gained 1.59% on an annualised basis compared to the 2.13% compared to freehold projects in Singapore.

District 18 gives us a smaller list of effectively two “ulu” condos:

Projects	District	Tenure
Ripple Bay	18	99 yrs from 10/08/2011
Sea Esta	18	99 yrs from 09/01/2012
Seastrand	18	99 yrs from 03/01/2011

All of the projects here are leasehold. As they have a lease start year of 2011/2012, we only saw the first resale transaction in 2016.

Year	D18 Ulu Condos	All of Singapore
2016	$1,019	$1,175
2017	$1,013	$1,145
2018	$1,011	$1,176
2019	$1,052	$1,166
2020	$1,009	$1,130
2021	$1,064	$1,207
2022	$1,172	$1,316
2023	$1,294	$1,433
Annualised Returns	3.46%	2.88%

Note: We eliminated 2015 for comparison purposes, as only a single condo saw a transaction that year. 

Price movements did mirror the wider market somewhat, as 2016 was a property low point, and 2023 as we know saw property prices peak. But overall, the annualised returns outperformed the wider market, with Seastrand and Ripplebay doing most of the heavy lifting. Sea Esta seemed to just keep ahead of inflation. 

Here's a breakdown by condos:

Year	RIPPLE BAY	SEA ESTA	SEASTRAND
2016	$1,049	$1,049	$980
2017	$1,036	$1,029	$960
2018	$1,045	$995	$974
2019	$1,100	$1,023	$996
2020	$1,032	$1,023	$965
2021	$1,089	$1,070	$1,025
2022	$1,213	$1,152	$1,122
2023	$1,352	$1,235	$1,225
Annualised	3.69%	2.37%	3.24%

Next, let’s look at District 23

Project	District	Tenure
The Petals	23	Freehold
Meralodge	23	Freehold
Hillview Apartments	23	Freehold
The Lanai	23	999 yrs from 12/10/1885
Hillview 128	23	999 yrs from 12/10/1885
Hillview Residence	23	999 yrs from 12/10/1885
The Amston	23	999 yrs from 12/10/1885
Montrosa	23	999 yrs from 12/10/1885
Merawoods	23	999 yrs from 12/10/1885

District 23 has all freehold properties only. The performance of “ulu” condos here has been impressive over the past decade.

Year	D23 Ulu Condos	All of Singapore
2013	$975	$1,420
2014	$906	$1,359
2015	$957	$1,358
2016	$857	$1,393
2017	$931	$1,461
2018	$1,000	$1,481
2019	$1,023	$1,506
2020	$1,051	$1,443
2021	$1,162	$1,564
2022	$1,292	$1,676
2023	$1,435	$1,753
Annualised Returns	3.94%	2.13%

Here’s a look at the various “ulu” projects and how they’ve fared individually:

Year	HILLVIEW 128	HILLVIEW APARTMENTS	HILLVIEW RESIDENCE	MERALODGE	MERAWOODS	MONTROSA	THE AMSTON	THE LANAI	THE PETALS
2013	$936	$866	$941	$944	$1,021	$1,016	$911		$1,010
2014	$966		$1,060		$908				$761
2015	$900		$932		$937	$878		$1,633	$902
2016	$881	$821	$852	$901	$987				$781
2017	$927	$846	$902	$923	$958	$856	$874	$1,258	$893
2018	$976		$1,019	$1,021	$1,033	$912	$959	$1,344	$951
2019	$979	$883	$1,020		$1,016	$912	$1,006	$1,323	$948
2020	$1,000		$1,028	$988	$1,063	$982	$1,017	$1,334	$919
2021	$1,031	$1,083	$1,148	$1,096	$1,151	$1,006	$1,394	$1,430	$1,042
2022	$1,087	$1,190	$1,296	$1,182	$1,326	$1,223	$1,334	$1,487	$1,342
2023	$1,316	$1,373	$1,404	$1,266	$1,405	$1,369	$1,380	$1,574	$1,156

Note that the one exception to the strong gains, the Lanai, is due to a transaction with a high initial price psf in 2015 (it appears that someone overpaid for a 1,378 sq. ft. unit).

In District 27, the freehold properties were the main outperformed:

Year	D27 Ulu Condos	All of Singapore
2016	$740	$1,393
2017	$741	$1,461
2018	$811	$1,481
2019	$815	$1,506
2020	$853	$1,443
2021	$923	$1,564
2022	$1,070	$1,676
2023	$1,117	$1,753
Annualised Returns	6.07%	3.34%

Sembawang/Yishun attracts a lot of less positive comments about being underdeveloped, but freehold condos here have moved from just $700 psf to around $1,000 psf in seven years. This may be due to a lot of condos here having room for appreciation, as it’s precisely their “ulu” reputation that caused them to be priced much lower at the start. 

District 28 has just two freehold properties that fit the “ulu” descriptor:

Projects	District	Tenure
Seletaris	27	Freehold
The Sensoria	27	Freehold
Skies Miltonia	27	99 yrs from 20/02/2012
The Miltonia Residences	27	99 yrs from 30/11/2010

Again, we can see both properties outperformed the wider market. 

Why has this happened? It’s multifactorial, and some of the things to consider are:

• “Ulu” condos were priced cheaper to begin with, and had more room for gains when conditions allowed the property market to rise. 
• Accessibility issues don’t always factor into weaker gains, because most condo buyers can buy a car and don’t care as much about MRT stations as we assume.
• Due to Singapore’s excellent infrastructure and compact size, even the most “ulu” condo is probably no more than an hour from the nearest mall or entertainment hub (if not Orchard itself); so the value is still there for buyers. 
• There are more malls, more MRT stations, and more decentralised hubs every few years; and there’s strong buyer confidence that, in the long run, all such issues will be fixed with time. These assumptions have never been proven wrong so far, by the way, as even HDB is now scrapping the mature/non-mature system as it loses relevance.

The two leasehold properties performed rather averagely when compared to the overall market:

Year	D27 Ulu Condos	All of Singapore
2016	$975	$1,175
2017	$1,020	$1,145
2018	$920	$1,176
2019	$971	$1,166
2020	$1,004	$1,130
2021	$1,016	$1,207
2022	$1,104	$1,316
2023	$1,187	$1,433
Annualised Returns	2.85%	2.88%

The “ulu” factor may be more of a concern for landlords, than owner-investors or owner-occupiers

Being in an inaccessible location does affect rentability (if not always rental yield). Tenants are certainly not going to wait for years and years for amenities to build up; and not every foreign worker is an affluent executive who can drive - or be driven - everywhere. So for landlords, this is definitely a huge concern; but those focused on resale gains may be able to use the age-old approach of just holding on for long enough.