5 interesting takeaways from the rare property losses in Singapore's booming market in 2022 - AsiaOne

That’s surprising, since subsale units usually cost more than new sale units (that’s usually the reason for the first buyer deciding to sell before completion). We don’t really have an explanation for this, other than perhaps higher interest rates giving some initial buyers cold feet.

District	per cent Loss	Volume
1	-12 per cent	66
2	-7 per cent	32
3	-6 per cent	13
4	-12 per cent	68
5	-6 per cent	22
7	-5 per cent	5
8	-6 per cent	18
9	-13 per cent	123
10	-8 per cent	52
11	-8 per cent	20
12	-5 per cent	16
13	-6 per cent	8
14	-5 per cent	36
15	-6 per cent	36
16	-5 per cent	45
17	-2 per cent	9
18	-4 per cent	9
19	-4 per cent	42
20	-6 per cent	5
21	-3 per cent	2
22	-7 per cent	3
23	-4 per cent	30
25	-5 per cent	9
27	-5 per cent	13
28	-10 per cent	21

The highest losses were in districts 1 (Marina Square, Boat Quay), 4 (Sentosa), and 9 (Cairnhill, Orchard).

This is unsurprising, as during the 2007-2012 property market period, projects such as Reflections At Keppel Bay (District 4) came up and saw a lot of losses. In District 1, projects such as The Sail @ Marina Bay, and Marina Bay Suites also saw a lot of losses. In District 9, projects such as Helios Residences and Scotts Square also saw big losses.

We can say that the higher activity in these areas is due to the return of affluent foreign buyers, as well as investors who foresee an uptick in the rental market. However, the highest losses also tended to come from these areas.

Prime region condos have a very high quantum, and discounts to move them tend to be quite substantial (this is partly why the “million-dollar Orchard/Sentosa loss” is almost a cliché). At these price levels, the price drops might not really cause a dent for some of these wealthy owners, and they would be more willing to sell at a big loss and move on than your average owner.

4. Freehold status didn’t seem to make much difference

For those who believe in freehold condos, we have some bad news. Among losses, freehold condos took a marginally worse hit, with losses averaging 8.49 per cent.

Leasehold condo losses averaged 8.05 per cent; perhaps due to their lower initial prices (freehold condos cost typically cost 15 to 20 per cent more as a rule of thumb).

It’s a slim gap between the two; but it does go to show that freehold doesn’t always make much difference.

The oddest thing we found was that, among losing transactions, those with longer holding periods fared worse

Conventional wisdom holds that, the longer you hold a property, the higher the returns – or at least the lower the losses – should be. But when we plotted the holding period against the losses in a scatterplot, we found the opposite.

Before jumping to conclusion that “the longer you hold, the more you lose”, here’s what the scatterplot looks like if we take gains into consideration too:

So what could explain the strange pattern in the losses?

When we dug into the transaction data, we found some things of interest:

Newton Planning Area saw 57 out of 733 losses with an average loss of 15 per cent. This is higher than the 8per cent loss on average across all areas. The majority were purchased in 2007 – 2012.
The Southern Island Planning Area (Sentosa) saw 30 out of 733 losses, the average loss being 16 per cent.
The Downtown Core Planning Area saw 96 out of 733 losses with an average loss of 10per cent (also mainly bought between 2007 – 2013)
Bukit Merah (basically most of which are Reflections At Keppel Bay) had 60 out of 733 losses, averaging a 9per cent loss, and was purchased between 2007 – 2012.

Do you see a pattern here? Most were purchased between 2007 – 2012. As a result, the data is skewed towards heavier losses in the 10-15 year holding period.

This makes sense since during this period, property prices were moving fast which gave way to greater chances of property mispricing in the primary market. In other words, developers may have overhyped certain projects during the run-up in prices, and when reality came, these prices were not a true reflection (get it?!) of prices then.

To confirm this, we looked deeper and found the following:

Newton: 60 per cent of losses were new sales, 3 per cent were sub sales
Southern Island: 27 per cent were new sales, 40 per cent were sub sales
Downtown Core: 52 per cent were new sales, 12.5 per cent were sub sales
Bukit Merah: 65 per cent were new sales, 6 per cent were sub sales

As you can see, most of these purchases occurred in the primary market (or in the case of sub sales, when the project hasn’t reached TOP).

Apart from that, we also wanted to highlight two outliers in the scatterplot which registered losses even though they were held for more than two decades. This would be an extreme oddity in the market and are likely due to special circumstances (e.g., divorce, selling to their own children, or so forth).

Project Name	Price	Size (sqft)	$PSF	Buy Price	Buy Date	Years Held	Quantum Loss	% Loss
CHELSEA GARDENS	$3,700,000	1959	$1,889	$3,890,000	6/12/1997	24.6	-$190,000.00	-4.9%
CHANGI GREEN	$980,000	872	$1,124	$1,250,000	10/1/1999	22.7	-$270,000.00	-21.6%

On a related note, here’s another way to view the losses:

Here we plot the year of the property purchase, to the percentage loss in its transaction. Again, you can see that a longer holding period seems to correspond to higher losses.

5. When it comes to property types, detached houses suffered the worst among losing transactions

Property Type	Average of quantum	Average of percent_gain	Average of annualised_returns
Apartment	-$176,369	-7.7%	-1.0%
Condominium	-$382,004	-8.8%	-1.0%
Detached House	-$2,666,540	-16.0%	-2.5%
Executive Condominium	-$58,600	-5.4%	-0.6%
Semi-Detached House	-$350,012	-8.2%	-1.6%
Terrace House	-$402,571	-11.1%	-1.3%

Detached houses lost around 16 per cent on average, with terrace houses following at a loss of about 11 per cent.

Among the losing transactions, Executive Condos (ECs) were the most spared, with average losses at just around 5.3 per cent.

This is likely due to the initial pricing of the properties. ECs are cheaper on average, which diminishes losses for the first batch of sellers.

Biggest losers by name

The following projects saw the biggest losses based on overall loss (quantum):

Project Name	Price	Size (sqft)	$PSF	Buy Price	Buy Date	Years Held	Quantum Loss	% Loss	Annualised Loss	Type of Sale	Tenure
THE MARQ ON PATERSON HILL	$13,380,000	3089	$4,331	$20,542,400	40865	10.8	-$7,162,400	-34.90%	-3.90%	New Sale to Resale	Freehold
PATERSON SUITES	$13,800,000	6663	$2,071	$20,000,000	40865	11.1	-$6,200,000	-31.00%	-3.30%	Resale to Resale	Freehold
REFLECTIONS AT KEPPEL BAY	$5,850,000	3993	$1,465	$9,981,000	39212	15.0	-$4,131,000	-41.40%	-3.50%	New Sale to Resale	Leasehold
SEASCAPE	$5,900,000	3380	$1,746	$9,600,000	40555	11.8	-$3,700,000	-38.50%	-4.00%	New Sale to Resale	Leasehold
REFLECTIONS AT KEPPEL BAY	$12,200,000	6835	$1,785	$15,554,000	39321	15.0	-$3,354,000	-21.60%	-1.60%	New Sale to Resale	Leasehold
MARINA BAY SUITES	$5,000,000	2691	$1,858	$8,250,000	41619	8.7	-$3,250,000	-39.40%	-5.60%	New Sale to Resale	Leasehold
BELLE VUE RESIDENCES	$4,702,000	3552	$1,324	$7,400,000	41155	9.5	-$2,698,000	-36.50%	-4.70%	Resale to Resale	Freehold
THE LUMOS	$5,737,875	2433	$2,359	$8,433,000	39314	15.0	-$2,695,125	-32.00%	-2.50%	New Sale to Resale	Freehold
MARINA COLLECTION	$5,050,000	3412	$1,480	$7,700,000	40324	12.5	-$2,650,000	-34.40%	-3.30%	New Sale to Resale	Leasehold
CLIVEDEN AT GRANGE	$5,700,000	2153	$2,648	$8,341,040	39297	14.7	-$2,641,040	-31.70%	-2.60%	New Sale to Resale	Freehold
MARINA BAY RESIDENCES	$9,400,000	4435	$2,120	$11,979,000	39274	14.8	-$2,579,000	-21.50%	-1.60%	New Sale to Resale	Leasehold
CLIVEDEN AT GRANGE	$8,300,000	2842	$2,921	$10,824,540	39286	14.8	-$2,524,540	-23.30%	-1.80%	New Sale to Resale	Freehold
SILVERSEA	$9,500,000	4467	$2,127	$12,000,000	41745	8.0	-$2,500,000	-20.80%	-2.90%	New Sale to Resale	Leasehold
GRANGE INFINITE	$5,800,000	2573	$2,255	$8,236,533	39350	14.5	-$2,436,533	-29.60%	-2.40%	New Sale to Resale	Freehold
CLIVEDEN AT GRANGE	$8,000,000	2842	$2,815	$10,336,920	39235	14.9	-$2,336,920	-22.60%	-1.70%	New Sale to Resale	Freehold
CLIVEDEN AT GRANGE	$7,600,000	2842	$2,674	$9,935,000	39281	14.8	-$2,335,000	-23.50%	-1.80%	New Sale to Resale	Freehold
THE ARCADIA	$7,700,000	7503	$1,026	$10,000,000	40401	11.9	-$2,300,000	-23.00%	-2.20%	Resale to Resale	Leasehold
N.A. (8 Nassim Hill)	$9,790,000	4209	$2,326	$12,000,000	40407	11.5	-$2,210,000	-18.40%	-1.70%	New Sale to Resale	Freehold
MARINA COLLECTION	$3,700,000	2185	$1,693	$5,877,650	41192	9.7	-$2,177,650	-37.00%	-4.70%	Resale to Resale	Leasehold
CLIVEDEN AT GRANGE	$7,700,000	2842	$2,710	$9,864,600	39288	14.9	-$2,164,600	-21.90%	-1.70%	New Sale to Resale	Freehold
HELIOS RESIDENCES	$3,950,000	1668	$2,368	$6,110,700	41158	9.5	-$2,160,700	-35.40%	-4.50%	Resale to Resale	Freehold
HELIOS RESIDENCES	$3,950,000	1701	$2,323	$6,037,485	39497	14.2	-$2,087,485	-34.60%	-2.90%	Sub Sale to Resale	Freehold
HELIOS RESIDENCES	$2,800,000	1281	$2,186	$4,856,600	41473	8.5	-$2,056,600	-42.30%	-6.30%	Resale to Resale	Freehold
HELIOS RESIDENCES	$3,980,000	1701	$2,340	$6,000,000	39420	15.0	-$2,020,000	-33.70%	-2.70%	New Sale to Resale	Freehold
CITYVISTA RESIDENCES	$5,200,000	2626	$1,980	$7,152,996	39267	15.4	-$1,952,996	-27.30%	-2.10%	New Sale to Resale	Freehold
CITYVISTA RESIDENCES	$4,950,000	2626	$1,885	$6,827,600	39381	14.7	-$1,877,600	-27.50%	-2.20%	New Sale to Resale	Freehold
THE OCEANFRONT @ SENTOSA COVE	$6,730,000	3025	$2,225	$8,600,000	40486	11.4	-$1,870,000	-21.70%	-2.10%	Sub Sale to Resale	Leasehold
REFLECTIONS AT KEPPEL BAY	$7,308,000	3380	$2,162	$9,173,000	39321	15.0	-$1,865,000	-20.30%	-1.50%	New Sale to Resale	Leasehold
SEASCAPE	$4,280,000	2164	$1,978	$5,924,100	40296	12.3	-$1,644,100	-27.80%	-2.60%	New Sale to Resale	Leasehold
HELIOS RESIDENCES	$2,838,000	1281	$2,216	$4,481,500	41235	9.3	-$1,643,500	-36.70%	-4.80%	Resale to Resale	Freehold

Here are the biggest losers by % loss:

Project Name	Price	Size (sqft)	$PSF	Buy Price	Buy Date	Years Held	Quantum Loss	% Loss	Annualised Loss	Type of Sale	Tenure
HELIOS RESIDENCES	$2,800,000	1281	$2,186	$4,856,600	7/18/2013	8.5	-$2,056,600	-42.30%	-6.3%	Resale to Resale	Freehold
REFLECTIONS AT KEPPEL BAY	$5,850,000	3993	$1,465	$9,981,000	5/10/2007	15.0	-$4,131,000	-41.40%	-3.5%	New Sale to Resale	Leasehold
THE SCOTTS TOWER	$1,300,000	657	$1,980	$2,200,500	4/24/2013	9.5	-$900,500	-40.90%	-5.4%	New Sale to Resale	Leasehold
THE CLIFT	$1,400,000	829	$1,689	$2,326,400	7/9/2012	10.1	-$926,400	-39.80%	-4.9%	Resale to Resale	Leasehold
MARINA BAY SUITES	$5,000,000	2691	$1,858	$8,250,000	12/11/2013	8.7	-$3,250,000	-39.40%	-5.6%	New Sale to Resale	Leasehold
SEASCAPE	$5,900,000	3380	$1,746	$9,600,000	1/12/2011	11.8	-$3,700,000	-38.50%	-4.0%	New Sale to Resale	Leasehold
MARINA COLLECTION	$3,700,000	2185	$1,693	$5,877,650	10/10/2012	9.7	-$2,177,650	-37.00%	-4.7%	Resale to Resale	Leasehold
HELIOS RESIDENCES	$2,838,000	1281	$2,216	$4,481,500	11/22/2012	9.3	-$1,643,500	-36.70%	-4.8%	Resale to Resale	Freehold
BELLE VUE RESIDENCES	$4,702,000	3552	$1,324	$7,400,000	9/3/2012	9.5	-$2,698,000	-36.50%	-4.7%	Resale to Resale	Freehold
HELIOS RESIDENCES	$3,950,000	1668	$2,368	$6,110,700	9/6/2012	9.5	-$2,160,700	-35.40%	-4.5%	Resale to Resale	Freehold
THE MARQ ON PATERSON HILL	$13,380,000	3089	$4,331	$20,542,400	11/18/2011	10.8	-$7,162,400	-34.90%	-3.9%	New Sale to Resale	Freehold
HELIOS RESIDENCES	$3,950,000	1701	$2,323	$6,037,485	2/19/2008	14.2	-$2,087,485	-34.60%	-2.9%	Sub Sale to Resale	Freehold
MARINA COLLECTION	$5,050,000	3412	$1,480	$7,700,000	5/26/2010	12.5	-$2,650,000	-34.40%	-3.3%	New Sale to Resale	Leasehold
HELIOS RESIDENCES	$3,058,000	1313	$2,329	$4,623,000	8/6/2007	15.3	-$1,565,000	-33.90%	-2.7%	New Sale to Resale	Freehold
HELIOS RESIDENCES	$3,980,000	1701	$2,340	$6,000,000	12/4/2007	15.0	-$2,020,000	-33.70%	-2.7%	New Sale to Resale	Freehold
OUE TWIN PEAKS	$1,238,000	570	$2,170	$1,858,605	12/28/2016	5.9	-$620,605	-33.40%	-6.6%	Resale to Resale	Leasehold
HELIOS RESIDENCES	$2,800,000	1313	$2,132	$4,152,000	7/31/2007	14.9	-$1,352,000	-32.60%	-2.6%	New Sale to Resale	Freehold
THE LUMOS	$5,737,875	2433	$2,359	$8,433,000	8/20/2007	15.0	-$2,695,125	-32.00%	-2.5%	New Sale to Resale	Freehold
CLIVEDEN AT GRANGE	$5,700,000	2153	$2,648	$8,341,040	8/3/2007	14.7	-$2,641,040	-31.70%	-2.6%	New Sale to Resale	Freehold
MARINA BAY SUITES	$3,100,000	1593	$1,946	$4,506,400	7/9/2012	9.7	-$1,406,400	-31.20%	-3.8%	New Sale to Resale	Leasehold
PATERSON SUITES	$13,800,000	6663	$2,071	$20,000,000	11/18/2011	11.1	-$6,200,000	-31.00%	-3.3%	Resale to Resale	Freehold
OUE TWIN PEAKS	$1,200,000	549	$2,186	$1,714,000	5/17/2013	8.6	-$514,000	-30.00%	-4.0%	New Sale to Resale	Leasehold
GRANGE INFINITE	$5,800,000	2573	$2,255	$8,236,533	9/25/2007	14.5	-$2,436,533	-29.60%	-2.4%	New Sale to Resale	Freehold
THE SAIL @ MARINA BAY	$2,430,000	1313	$1,850	$3,450,000	9/25/2013	8.7	-$1,020,000	-29.60%	-4.0%	Resale to Resale	Leasehold
THE SAIL @ MARINA BAY	$2,550,000	1184	$2,154	$3,600,000	4/4/2011	11.3	-$1,050,000	-29.20%	-3.0%	Resale to Resale	Leasehold
VIDA	$1,080,000	527	$2,048	$1,513,000	1/13/2011	11.6	-$433,000	-28.60%	-2.9%	Resale to Resale	Freehold
ONE SHENTON	$2,560,000	1572	$1,629	$3,567,120	2/9/2011	11.2	-$1,007,120	-28.20%	-2.9%	New Sale to Resale	Leasehold
MARINA BAY SUITES	$3,808,000	2045	$1,862	$5,304,000	5/26/2010	12.5	-$1,496,000	-28.20%	-2.6%	New Sale to Resale	Leasehold
SEASCAPE	$4,280,000	2164	$1,978	$5,924,100	4/28/2010	12.3	-$1,644,100	-27.80%	-2.6%	New Sale to Resale	Leasehold
REFLECTIONS AT KEPPEL BAY	$3,860,700	2271	$1,700	$5,339,200	4/26/2007	14.9	-$1,478,500	-27.70%	-2.2%	Sub Sale to Resale	Leasehold

In the property market, exceptions are the norm

All of this goes to show that conventional wisdom doesn’t always hold true. The property market – especially one as dynamic as Singapore – can be unpredictable.

Sellers can still make losses in a booming market; and conventional beliefs about holding periods and sub sales can be proven wrong.

ALSO READ: Beyond 2022: How Singapore's development will affect the property market (Sembawang and Woodlands)

It’s possible that some, or perhaps even most, of these losses were due to exceptional circumstances: the death of a co-owner, drastic changes in income, or selling between family members (these may be at a steep discount, such as if someone sells to a sibling or child).

But it’s not impossible that it can happen, and this also means hope for home buyers. Don’t stop looking, because you can see here that at least 733 buyers managed to transact at a lower price – even in the 2022 property market.

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