5 Condos With Disappointing Early Sales That Became Profitable Later (Some Had To Discount)
- Ryan J
- May 4, 2023
- 6 min read
If you are visiting a hawker centre for the first time, how do you decide which chicken rice stall to go for? Is it the photos displayed? How the chicken looks as it is hung up?
While that may play some part in our final choice, more often than not, we judge how good a stall is from the length of the queue. We tend to think that whatever is in demand must be good. If not, why would anyone be buying it, right?
That train of thought also shows up even when it comes to big-ticket items like property. Most people will tend to think that whatever sells well would also mean that it would be in demand in the future when it comes to the resale market.
And while that is true for the most part, sometimes a development goes under the radar for strange reasons – from Covid issues to a late start in marketing. Whatever the reasons, the buyers who were sharp enough to defy the crowd are sometimes rewarded. Here are some condos that may have done poorly at launch, but have since shown good resale profits. We last did this mid of 2022, so here’s an update for 2023:
Condos that are profitable despite poor initial sales
|Project||How Many Sold In 6 Months?||First Sale Year||Tnx (Gains)||Average Gain||Tnx (Loss)||Average Loss||Tnx (Breakeven)||Total Tnx||Proportion Winners|
|SIMS URBAN OASIS||25.9%||2015||249||$149,588||1||-$140,000||37||287||87%|
|RIVERBANK @ FERNVALE||39.6%||2014||157||$150,122||1||-$11,000||22||180||87%|
|VUE 8 RESIDENCE||29.4%||2013||92||$209,719||4||-$38,555||8||104||88%|
|STARS OF KOVAN||44.8%||2016||70||$184,951||12||82||85%|
|THE VENUE RESIDENCES||18.4%||2013||57||$156,476||3||-$53,250||10||70||81%|
|WATERFRONT @ FABER||43.3%||2014||30||$223,409||3||33||91%|
Notable project highlights
The following projects have all seen average gains of above $200,000, despite a relatively poor showing at launch.
- Highline Residences
- Hallmark Residences
- Waterfront @ Faber
- Vue 8 Residence
1. Highline Residences
Location: 5 Kim Tian Road (District 3)
Developer: Harvestland Development Pte. Ltd.
Number of units: 500
Initial launch sales: 27.2% sold in the first six months
Percentage of profitable resale transactions: 82% (47 gains, 7 losses)
Average gain: $248,154
Highline Residences had many solid reasons to be a bad buy. At the time of sales (around 2014), there were concerns about property prices coming down from the last peak in 2013. This was not unwarranted, as many more upscale properties (of which Highline Residences was marketed as one) did, in fact, see price declines from this period.
This was compounded by concerns about rising interest rates, which were foreseen to come in 2018. Again, buyers were right – rates did rise in 2018 and are even higher today (despite Covid-19 providing a few more years of reprieve).
But despite their being right, Highline Residences has defied expectations anyway. In the end, there’s no arguing with average gains of over $248,000 psf; and there are few rivals for a condo located so close to Tiong Bahru MRT station.
Highline Residences also shares some neighbourhood amenities with the venerable Moh Guan Road HDB blocks: a place where 51-year-old flats can transact for over $1 million. The area is well developed (e.g., there’s an NTUC FairPrice right across the road from this condo), blending old-school coffee shops with artisanal boutiques and cafes.
Recent transactions have mostly been above $2,200 psf, and given how prices have risen everywhere else, some might see this as a reasonable price for such a central location.
2. Hallmark Residences
Location: 17 Ewe Boon Road (District 10)
Developer: MCL Land
Number of units: 75
Initial launch sales: 6.7% sold in the first six months
Percentage of profitable resale transactions: 100% (13 gains, 0 loss)
Average gain: $228,114
Like Highline Residences above, Hallmark Residences launched close to the last property peak in 2013. As mentioned above, buyers had turned cautious toward luxury, high-quantum units at the time. Hallmark Residences was an exact fit for this criterion: a boutique (read: usually expensive) 75-unit condo in the Bukit Timah area.
It definitely had a very slow start, selling just 5 units total in 2013.
Times were so bad for luxury condos, Hallmark started advertising massive discounts of up to $300,000, or so the marketing materials alleged. But even falling from an average of $2,200 to $1,800 psf didn’t help to move the needle; in fact, it may have been a bad miscalculation. We do recall some realtors disagreeing with the move, saying such huge price drops would just encourage prospects to wait for even further discounts.
In any case, Hallmark Residences’ eventual profitability may have come from those who seized this discount. It would explain the average gains of $228,000+, with all 13 recorded transactions being profitable.
If there’s a major highlight to Hallmark Residences, we’d say it’s the presence of Anglo Chinese School (Barker) and Singapore Chinese Girls School. That, plus the usual greenery and lower density of the Bukit Timah area.
3. Waterfront @ Faber
Location: 18 Faber Walk (District 5)
Developer: World Class Land Pte. Ltd.
Number of units: 210
Initial launch sales: 43.3% sold in the first six months
Percentage of profitable resale transactions: 91% (30 gains, 0 loss)
Average gain: $223,409
Waterfront @ Faber also launched near the 2013 peak (we’re sure you see the pattern by now), but unlike most of the others on the list, it had quite reasonable sales at the opening. Sales began to taper off shortly though, and the developer had to re-launch the property at a roughly seven per cent discount (on top of early bird bonuses from the preview). This was a median price of around $1,247 sq. ft. after the relaunch.
There was also somewhat stifled interest in the dual-key offerings at the time (Waterfront has dual-key two-bedders at around 753 sq. ft.), as there was a sense that Singapore’s rental market was softening. Dual-key units are often preferred by landlords, who rent out the unit to separate tenants or live in one sub-unit while renting out the other.
The impressive $220,000+ average gain likely came from buyers who bought at the relaunch, when the developer prices had bottomed out.
Waterfront is mainly attractive to buyers who like its low-density area, and the tranquillity of the Faber Walk area. Like most such areas though, residents prefer not to have a busy train station or mall next to them – so it’s probably better for drivers.
4. Vue 8 Residence
Location: 83 Pasir Ris Heights (District 18)
Developer: Publique Realty (Pasir Ris) Pte. Ltd.
Number of units: 463
Initial launch sales: 29.4% sold in the first six months
Percentage of profitable resale transactions: 88% (92 gains, 4 losses)
Average gain: $209,719
Vue 8 Residence suffered from its lack of accessibility at the time of launch. More than a few buyers brought up the lack of MRT access, or Elias Mall being the only major retail amenity within walking distance.
Nonetheless, Vue 8 banked on several niches but significant selling points: it’s one of the closest private developments to Pasir Ris Park and the beach (about nine minutes walk to the beach). It’s also close enough to the nearby HDB flats that residents can share some HDB amenities, such as Pasir Ris West Plaza (an HDB mall).
At present, Vue 8 has started to come on the radar for issues of space and accessibility. A 1,346 sq. ft. unit in this condo, for instance, can transact for as low as $1.81 million; which is quite reasonable in the 2023 housing market.
Incidentally, the upcoming Elias MRT will be located just around 200 metres from Vue 8; but we don’t think this is contributing to the gains for now, as the station is far in the future (likely 2032).
Location: 11 Jurong Lake Link (District 22)
Developer: MCL Land
Number of units: 696
Initial launch sales: 36.6% sold in the first six months
Percentage of profitable resale transactions: 82% (97 gains, 3 losses)
Average gain: $200,474
Lakeville was also launched near the 2013 peak, but the issue wasn’t related to it being a luxury condo. Rather, Jurong’s transformation was more of a work in progress at the time, and it may be because the market wasn’t certain of the rising prices in the area.
The developer seemed to be conscious of this though, as at launch Lakeville was considered decently priced at $1,250 to $1,350 psf. This was much lower than its companion development JCube (by the same developer), which had seen prices in the range of $1,400+ psf.
The current gains we’re seeing, at just over $200,000+, likely stem from the early initial pricing. Ongoing confidence in the Jurong Lake District has also created more interest in nearby areas. Note that the Lakeside MRT station (EWL), which is only around eight minutes walk from Lakeville, is only two stops from Jurong East; today a major commercial hub.
Lakeville is also in a very convenient area with eateries, shops, etc. from its nearby HDB cluster. There are, for instance, two Giant outlets nestled among the nearby flats.
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