A total of 30 completed condos experienced at least five unprofitable transactions last year (see Table 1). Notably, eight of them incurred losses exceeding $1 million, and freehold condos in prime districts were not spared.

Additionally, the condos with both the highest number of unprofitable transactions and the largest loss are in District 1. It is also noteworthy that all but eight of the unprofitable condos are in the Core Central Region (CCR).

The Sail @ Marina Bay had the highest number of unprofitable transactions

Last year, The Sail @ Marina Bay recorded 19 unprofitable transactions, the highest among the 30 unprofitable condos. Losses from these transactions ranged from breakeven to approximately $1.165 million.

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The Sail @ Marina Bay is a 99-year leasehold condo that obtained its temporary occupation permit (TOP) in 2008. Located along Marina Boulevard in District 1, the 1,111-unit development is within walking distance of three MRT stations, namely Downtown, Raffles Place, and Shenton Way (see Map 1). Other nearby amenities include Market Street Hawker Centre and Lau Pa Sat. However, there are no schools within a 1km radius.

A three-bedroom unit on the 59th storey recorded last year’s highest loss of $1.165 million. The seller bought the 1,184-sq ft unit in June 2011 for $3.715 million ($3,138 psf) and sold it for $2.55 million ($2,154 psf) in April last year.

However, the same unit was previously involved in two profitable transactions (see Table 2). The first owner bought the unit from the developer in December 2004 for $1.161 million ($980 psf) and sold it in November 2010 for $3.019 million ($2,550 psf), making a profit of approximately $1.858 million.

In June 2011, the second owner sold the unit for $3.715 million ($3,138 psf) and pocketed a smaller profit of approximately $696,000.

The unit on the 59th storey comprises an en-suite master bedroom. The remaining two bedrooms share a common bathroom. If the owner prefers a larger living area, Bedroom 2 can be easily converted into a dining room, as it is adjacent to the living/dining area (see Floor Plan 1).

Last year’s highest loss of $1.165 million is significantly lower than the record-high loss of $2.312 million for the condo from a transaction concluded in October 2020. The seller bought the unit in October 2007 for $5.812 million ($2,950 psf) and sold it for $3.5 million ($1,777 psf).

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It is a three-bedroom-plus-study unit on the 27th storey. The 1,970-sq ft unit comprises an en-suite master bedroom, two other bedrooms, and a common bathroom. A small study, located adjacent to the master bedroom, can be converted into a walk-in wardrobe for the master bedroom (see Floor Plan 2).

Eight condos with losses of at least $1 million

Among the 30 completed condos, eight have at least one unprofitable transaction with losses exceeding $1 million (see Table 3). All eight condos are 99-year leasehold developments, except for the freehold Scotts Square. Additionally, all eight condos are in the CCR, with half in District 1, two in prime District 9, and two in Sentosa.

Among these eight condos, only Marina Bay Suites recorded losses exceeding $2 million. Additionally, the condo in District 1 had no profitable transactions and nine unprofitable transactions last year.

Marina Bay Suites is located along Central Boulevard, and adjacent to The Sail @ Marina Bay (see Map 2). It is also a short walk from Downtown MRT Station and Lau Pa Sat. The 221-unit development obtained its TOP in 2013.

The unit that recorded the highest loss of $2.05 million was sold in May last year for $5.65 million ($2,100 psf). The seller had purchased the four-bedroom unit for $7.7 million ($2,861 psf) in June 2015.

A unique feature is the sizable balcony that wraps around the entire width of the 2,691-sq ft unit. The unit also includes an en-suite master bedroom and an en-suite Bedroom 2, as well as two other bedrooms and a common bathroom. A private lift, a powder room, dry and wet kitchens, and a family area are part of the spacious unit (see Floor Plan 3).

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Thus far, Marina Bay Suites has recorded four transactions with losses exceeding $2 million, with the highest loss being approximately $3.25 million. The aforementioned unprofitable transaction resulted in the smallest loss among the four (see Table 4).

The transaction that recorded the highest loss of $3.25 million took place in August 2022, when a 2,691-sq ft four-bedroom unit was sold for $5 million ($1,858 psf). In December 2013, the seller purchased the unit on the 60th storey from the developer for $8.25 million ($3,066 psf).

The unit shares the same size and has a similar layout to the unit on the 58th storey, which recorded a loss of $2.05 million last year. Both units are also from the same stack.

Losses from both units could be attributed to the fact that the sellers purchased them at prices significantly above the then prevailing average price for Marina Bay Suites. The seller of the unit on the 58th storey bought it at $2,861 psf in 2015, when the average price for the condo was $2,465 psf (see Chart 1).

Similarly, the seller of the unit on the 60th storey purchased it for $3,066 psf in 2013, well above the prevailing average price of $2,838 psf for the condo. To add to their woes, they sold the unit for $1,858 psf in 2022, below the then-average price of $1,909 psf.

Fortunately, the seller of the unit on the 58th storey managed to sell their unit at a higher-than-average price of $2,100 psf last year. At the time, the average price for Marina Bay Suites was $1,917 psf, which could have helped mitigate their loss.

District 1 was overrepresented

Astute readers will notice that District 1 is overrepresented. Of the 30 most unprofitable condos, eight are located in District 1, the most in Singapore. Prime District 9 takes second place with five condos, followed closely by District 4 with four condos (see Table 5).

Additionally, both The Sail @ Marina Bay (which recorded the highest number of unprofitable transactions last year) and Marina Bay Suites (which recorded the highest loss last year) are in District 1.

One reason for the underwhelming performance of District 1 could be the district’s significantly weaker price growth compared to the Central Region and islandwide. Since 2020, the average resale price for condos in District 1 has fallen by 5.4% to $2,027 psf (see Chart 2). In contrast, the average resale price for condos in the Central Region rose by 19% to $2,094 psf, while that for condos islandwide surged by 31.1% to $1,774 psf.

As buyers of condos in District 1 tend to be foreigners, their prices have suffered from the double whammy of the recent increase in additional buyer’s stamp duty (ABSD) rates and travel restrictions due to COVID-19.

The most recent changes in ABSD rates had the largest impact on foreign buyers, who saw their applicable ABSD rate double from 30% to 60%, with effect from April 2023. ABSD does not apply to Singaporeans buying their first residential property but increased from 17% to 20% for those buying their second residential property. Singaporeans buying their third or more residential properties saw their ABSD rate increase from 25% to 30%. ABSD remains at 5% for permanent residents (PR) buying their first residential property. For PRs buying their second and third or more residential properties, ABSD rose by five percentage points to 30% and 35%, respectively.

In 2015, foreigners represented 27.5% of all buyers of condos in District 1 (see Chart 3). However, this figure declined to 10.2% in 2023 and 7.2% last year. A similar decline was seen in Districts 4 and 9. In 2015, foreigners represented 13.8% of all buyers of condos in District 4, but this fell to 4.2% last year. Likewise, foreigners made up 15.8% of condo buyers in District 9 but accounted for only 4.4% of such buyers last year.

In contrast, the decline was less steep for condos islandwide. In 2015, foreign buyers represented 7.2% of all condo buyers islandwide, before declining to 3.5% in 2023 and 1.4% last year (see Chart 4).

The weaker demand from foreign buyers for condos in District 1 could have negatively impacted their prices, contributing to the recent decline in the average resale price. This could also explain why the district is overrepresented among last year’s most unprofitable condos.

Only eight non-CCR condos

URA defines the CCR as comprising Districts 9, 10, and 11, as well as the Downtown Core and Sentosa (see Map 3). The Rest of Central Region (RCR) comprises nine planning areas, namely Outram, Museum, Newton, River Valley, Singapore River, Marina South, Marina East, Straits View, and Rochor. The Outside Central Region (OCR) refers to the rest of Singapore outside the CCR and RCR.

Among the 30 unprofitable condos, only eight are not in the CCR (see Table 6). Notably, these eight condos have significantly more profitable transactions than unprofitable ones. Furthermore, the losses incurred are all below the $1 million threshold.

Reflections at Keppel Bay has the most unprofitable transactions and the highest loss among the eight non-CCR condos. However, the 15 unprofitable transactions incurred last year are only half of the 30 profitable transactions.

Reflections at Keppel Bay is a 99-year leasehold condo located along Keppel Bay View in District 4. It is within walking distance of Telok Blangah MRT Station, Labrador Park, and Marina at Keppel Bay (see Map 4). The 1,129-unit condo obtained its TOP in 2011.

Last year’s highest loss of approximately $726,500 for Reflections at Keppel Bay involved a two-bedroom unit on the first storey. The seller bought the 1,281-sq ft unit in November 2012 for $2.877 million ($2,246 psf) and sold it in June last year for $2.15 million ($1,678 psf).

A unique feature of the two-bedroom unit is the sizable private enclosed space (PES), accessible via the living/dining area (see Floor Plan 4). The PES is ideal for buyers who desire private outdoor spaces. However, most buyers prefer indoor over outdoor space due to Singapore’s hot and humid weather.

Conclusion

Last year, 30 completed condos recorded at least five unprofitable transactions, with losses ranging from breakeven to over $2 million. While eight condos reported losses exceeding $1 million, only Marina Bay Suites in District 1 saw losses surpassing $2 million. Meanwhile, The Sail @ Marina Bay, another condo in District 1, had the highest number of unprofitable transactions last year.

Besides these two condos, six other developments in District 1 were among the 30 most unprofitable condos, giving District 1 the dubious distinction of having the highest number of unprofitable condos. One possible reason could be weaker demand from foreign buyers due to the sharp increase in ABSD rates introduced in April 2023 and pandemic-related travel restrictions.

Condos in the RCR and OCR appear to be safer bets, as majority of the most unprofitable condos are in the CCR. Furthermore, the eight non-CCR unprofitable condos still had more profitable transactions than unprofitable ones. Additionally, losses from last year’s unprofitable transactions in these eight condos in RCR or OCR remained well below the $1 million threshold.

Check out the latest listings for The Sail @ Marina Bay, Marina Bay Suites, Reflections At Keppel Bay, Condominium properties

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