Here's Why These Condos Lost Money Despite Buying At A Property Market Low - Stacked

Analysis

7 min read

This week, we looked at some properties that saw losing transactions, despite being bought at an “ideal” time – during 2003 to 2005, or 2015 to 2016 (all low points in the property market). And while many of the reasons could be related to seller circumstances (see here for the previous piece), there’s naturally some curiosity over the condos involved. Here, we examine the projects that saw quite a number of losing transactions, despite being bought at a low.

Bought between 2003 – 2005

Project	Average of %	Volume
REGENT GROVE	-20.6%	5
YISHUN SAPPHIRE	-11.3%	7
COMPASS HEIGHTS	-10.6%	5
THE SAIL @ MARINA BAY	-9.3%	6
STARVILLE	-8.1%	13
THE MADEIRA	-7.6%	6
MELVILLE PARK	-7.2%	8
THE TREVOSE	-6.8%	6
HILLVIEW REGENCY	-6.7%	5
THE LINEAR	-6.1%	5
HILLINGTON GREEN	-5.7%	5
LAKEHOLMZ	-5.2%	7
AMARYLLIS VILLE	-5.0%	7
THE GARDENS AT BISHAN	-4.6%	11
THE GLACIER	-4.0%	5
SAVANNAH CONDOPARK	-3.8%	8
RIVERVALE CREST	-3.4%	9
GRANDEUR 8	-2.3%	14

Source: URA

Bought between 2015-2016

Project	Average of %	Volume
OUE TWIN PEAKS	-11.5%	17
HEDGES PARK CONDOMINIUM	-8.1%	7
NINE RESIDENCES	-6.7%	5
PARC ROSEWOOD	-6.4%	5
TRILIVE	-6.2%	7
# 1 SUITES	-5.0%	5
KINGSFORD HILLVIEW PEAK	-3.5%	18
THE GLADES	-3.4%	12
ICON	-2.1%	5

Source: URA

An important note:

As we’ve pointed out in the previous article, the losing transactions are not always due to problems with the project. The losses may be due to government policy measures, urgent sales, or simple market fluctuations. The following projects may perform better in other circumstances.

1. Kingsford Hillview Peak

Location: Hillview Rise (District 23)

Developer: Kingsford Development Pte Ltd

Lease: 99-years

Completion: 2017

Number of units: 512

The earliest buyers are probably unhappy about what happened here. After a relatively good launch, sales at Hillview Peak stalled out. The developer then offered significant discounts, which caused sales to finally pick up:

This is the volume of developer sales from Square Foot Research. Notice the long period of muted sales, before discounts kicked in and volumes rose again. This can be explained by the developer pricing:

Median prices were around $1,312 psf at launch, but the poor sales meant that Kingsford Development had to push out discounts, with a new selling price of around $1,200 psf.

Now all of this explains why the 2015 to 2016 buyers were able to snag units at a lower price. However, the very same reason for those low prices may also have worked against them. Hillview Peak’s transaction history doesn’t look too great, with 35 profitable to 30 losing transactions.

One realtor raised the issue that nearby condos, such as Hillview Park, Glendale Park, and Hillview Heights, are all freehold compared to Hillview Peak being leasehold. And as some of you may well know, this was one of the infamous developments for which the developer had received stop-work orders and fines from the government.

Besides, the poor construction quality in general continued to be reported even after it was completed.

As to the project itself, the location is actually quite good. The condo has good greenery all around, with Bukit Gombak Park to the west, and Bukit Timah Nature Reserve to the east. HillV2 is also just across the road from this condo; it’s not the biggest mall, but it does provide day-to-day amenities like a Cold Storage and a Guardian.

There’s also MRT access (Hillview MRT on the DTL), which is about a 10-minute walk out to Upper Bukit Timah Road.

2. OUE Twin Peaks

Location: Leonie Hill Road (District 9)

Developer: Cove Development Pte Ltd

Lease: 99-years

Completion: 2015

Number of units: 462

OUE Twin Peaks saw price drops after initial sales. Units began to move only after a 15 per cent discount in later phases, which explains how the 2015 – 2016 buyers managed to buy at the bottom. You can see this in its price movement on Square Foot Research:

That said, most transactions at OUE Twin Peaks have been losing transactions, even today. There are only two profitable instances and 46 recorded losses.

We’ve written about it here, but a combination of being one of the few leasehold condos in a freehold area, the high prices during its launch, and well, its current age right now does work against it. As newer and more luxurious properties sprout up in the area (Boulevard 88 and Park Nova are nearby), it makes it harder to stand out to the higher-end clientele.

That said, the location is fantastic, as you’d expect from a condo along Grange Road. Somerset MRT (NSL) is even within walking distance, along with the slew of malls like Orchard Central, 313, and so forth. The issue is simply that many other options exist nearby, which are freehold and equally luxurious (if not more so).

3. Grandeur 8

Location: Ang Mo Kio Central 3 (District 20)

Developer: AMK Properties Pte Ltd

Lease: 99-years

Completion: 2005

Number of units: 579

Grandeur 8 is a condo with a good track record. It’s only had 24 unprofitable transactions in its history, and 550 profitable ones.

If there is a drawback, it’s that Grandeur 8 requires a bus connection to get to Ang Mo Kio MRT (NSL, CRL). This is about a 650-metre walk to Block 504, where services like 265 can get you to the train.

Nearby amenities are good, though not fantastic. The small Djitsun mall is nearby, just one avenue away (Ang Mo Kio Avenue 2). There’s a cinema here and some eateries, though not much else. Broadway Plaza, also near Djitsun Mall, adds some retail options. Alternatively, the local market and food centre are also within this cluster.

This is a condo for those who want a quiet enclave, away from the traffic and crowds. It is within an HDB area though, so those who insist on low-density housing may dislike it.

SOLD ON	ADDRESS	UNIT AREA (SQFT)	SALE PRICE (S$ PSF)	BOUGHT ON	PURCHASE PRICE (S$ PSF)	PROFIT (S$)	HOLDING PERIOD (DAYS)	ANNUALISED (%)
14 Feb 2007	14 ANG MO KIO CENTRAL 3 #19-XX	1,722	381	2 Sep 2003	400	-33,000	1,261	-1.4
28 Nov 2006	6 ANG MO KIO CENTRAL 3 #11-XX	1,421	492	28 Jul 2003	514	-31,611	1,219	-1.3
9 Oct 2006	16 ANG MO KIO CENTRAL 3 #18-XX	1,227	501	15 Dec 2004	526	-30,000	663	-2.6
4 Mar 2006	6 ANG MO KIO CENTRAL 3 #02-XX	1,195	444	26 Sep 2003	448	-5,000	890	-0.4
1 Feb 2006	8 ANG MO KIO CENTRAL 3 #14-XX	1,421	512	1 Aug 2003	529	-23,520	915	-1.3
5 Dec 2005	12 ANG MO KIO CENTRAL 3 #03-XX	1,281	454	30 Jul 2003	455	-1,000	859	-0.1
14 Nov 2005	2 ANG MO KIO CENTRAL 3 #10-XX	1,195	485	5 Aug 2003	486	-800	832	-0.1
7 Oct 2005	12 ANG MO KIO CENTRAL 3 #02-XX	1,227	440	4 Aug 2003	458	-22,000	795	-1.8
12 Sep 2005	14 ANG MO KIO CENTRAL 3 #15-XX	1,227	509	25 Jul 2003	513	-4,000	780	-0.3
22 Aug 2005	2 ANG MO KIO CENTRAL 3 #13-XX	1,195	481	8 Jul 2003	493	-14,600	776	-1.2
19 Aug 2005	14 ANG MO KIO CENTRAL 3 #06-XX	1,227	487	29 Jul 2003	491	-4,000	752	-0.3
1 Jul 2005	12 ANG MO KIO CENTRAL 3 #09-XX	1,227	468	28 Jul 2003	475	-9,000	704	-0.8
22 Apr 2005	10 ANG MO KIO CENTRAL 3 #16-XX	1,119	505	28 Aug 2003	517	-13,730	603	-1.4
7 Jul 2004	12 ANG MO KIO CENTRAL 3 #09-XX	1,227	473	28 Jul 2003	484	-14,000	345	-2.5

Source: Squarefoot Research

The losses from here are likely due to market timing, as most transactions have been profitable since. A deeper look into the loss-making transactions shows that the losses incurred were all bought at a market low but sold just not long after in 2005/06 before the market really started to peak in 2007/08. In any case, these losses sustained were also minimal, with the bigger losses just above $30,000.

4. Starville

Location: Lengkong Tiga (District 14)

Developer: Pencroft Investments Pte Ltd

Lease: Freehold

Completion: 2006

Number of units: 250

This is a very unique condo: it’s the only one in Singapore with a sizeable observatory. There’s even a working telescope in there for stargazing activities (we’re told it’s a Meade LX200, which is apparently a really big deal, but we don’t know enough about stargazing!).

The entire condo is also themed around the concept of stars and constellations, in its surrounding sculptures and design. Due to the theme, it was necessary that Starville be in a low-density location (tall buildings that are all lit up tend to interfere with stargazing). Most of the surrounding homes here are landed properties, which is a big plus to those who like privacy.

The downside is typical of being in a landed area: public transport access isn’t very good, and you’ll need to travel out for most amenities. This isn’t a drawback to most buyers though, as the entire point of these smaller, exclusive projects is to be away from the crowd. Starville also has a good track record. With just 250 units, this project has seen 220 profitable transactions, and only 15 losses.

As with Grandeur 8, the losses we found were likely due to them being sold just 2/3 years later in 2005/06.

Just look at the difference the holding period makes:

SOLD ON	ADDRESS	UNIT AREA (SQFT)	SALE PRICE (S$ PSF)	BOUGHT ON	PURCHASE PRICE (S$ PSF)	PROFIT (S$)	HOLDING PERIOD (DAYS)	ANNUALISED (%)
26 Apr 2007	60 LENGKONG TIGA #09-XX	1,270	598	18 Jul 2003	606	-10,000	1,378	-0.3

Source: Squarefoot Research

Here’s a 1,270 sq. ft. unit bought on 18 July 2003 and sold 4 years later at a slight $10,000 loss.

SOLD ON	ADDRESS	UNIT AREA (SQFT)	SALE PRICE (S$ PSF)	BOUGHT ON	PURCHASE PRICE (S$ PSF)	PROFIT (S$)	HOLDING PERIOD (DAYS)	ANNUALISED (%)
18 Oct 2021	60 LENGKONG TIGA #03-04	1,755	916	10 Jul 2003	388	926,668	6,675	4.8

Source: Squarefoot Research

And here’s one that was bought just 8 days earlier on 10 July 2003, but sold 18 years later at a profit of close to a million.

5. The Glades

Location: Bedok Rise (District 16)

Developer: Sherwood Development Pte Ltd

Lease: 99-years

Completion: 2016

Number of units: 726

The recent Sceneca Residence may have stolen the spotlight from The Glades, which was previously also known for being next to Tanah Merah MRT station (EWL). This is a very significant stop, as it’s the interchange where the train goes to Changi Airport. As such, The Glades often appeals to aviation industry workers, be it as a home or rental unit.

That said, Seneca Residence could also end up being a boon to The Glades. Seneca is mixed-use and will introduce commercial elements, including a supermarket. This will resolve a longstanding problem in the area: a lack of nearby amenities. You may expect the new launch to have a knock-on effect, at least slightly pushing up the prices of resale neighbours like The Glades.

The low initial prices of The Glades weren’t due to issues with the condo, but timing. For starters, The Glades launched just after the seventh month and saw weak sales (we have no idea why the developers chose that timing). Coupled with being launched in a late-bull market, the developer eventually discounted prices by $8,000 to $38,000, thus allowing some buyers to get a good deal.

The Glades is doing reasonably well now, with 128 profitable transactions and 34 losing transactions to date.

For more interesting projects, as well as news and trends in the Singapore property market, follow us on Stacked. We’ll also provide you with reviews of new and resale properties alike.

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