Project Spotlight: This leasehold condo is District 3's most profitable condo, boasting over 650 such transactions
By Elizabeth Choong
/ EdgeProp Singapore |
With its 662 profitable transactions, Queens is the most profitable condo in District 3. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) – Queens has achieved 662 profitable transactions and only 60 unprofitable transactions since its launch in 2000, making it the condo with the highest number of profitable transactions in District 3. This is despite Queens being a 99-year leasehold development located outside the prime districts of 9, 10, and 11. Furthermore, Queens obtained its temporary occupation permit (TOP) in 2002, which means that the condo is more than 20 years old.
In this article, we examine Queens and discuss possible reasons for its profitability despite its age, leasehold tenure, and non-prime location.
Well-connected and convenient
Despite not being in a prime district, Queens is still very well-located along Stirling Road, which is within District 3 and the Queenstown Planning Area. Additionally, the development is a short walk from Queenstown MRT Station, Anchorpoint Shopping Centre, and Queenstown Stadium, Sports Centre, and Swimming Complex (see Map 1).
Source: EdgeProp LandLens (as at 18 October 2024)
Dawson Place, Ikea, Queensway Shopping Centre, Margaret Drive Marketplace, Queenstown Public Library, ABC Brickworks Market and Food Centre, and Alexandra Village Food Centre are within a 1 km radius of Queens. Schools within the same distance include New Town Primary School, Queenstown Primary School, Queenstown Secondary School, and Queensway Secondary School.
The 722 units in Queens feature two to five bedroom units that range in size from 915 sq ft to 2,723 sq ft. The leasehold condo offers a wide range of common facilities, including three pools, two tennis courts, a basketball court, a children’s playground, a gym, and several BBQ pits (see Map 2).
Source: EdgeProp Research
Over 650 profitable transactions
Since its sales launch in 2000, Queens has achieved 662 profitable and 60 unprofitable transactions. Profits range from $1,000 to $1.588 million. 30 of the profitable transactions yielded profits of at least $1 million. At the same time, losses remained well under $400,000, ranging from breakeven to $310,000.
The top three most profitable transactions at Queens all took place this year, and each yielded profits of at least $1.38 million for the sellers (see Table 1). Additionally, all three transactions involved four-bedroom units of the same size (1,410 sq ft). The sellers purchased their units in either 2000 or 2002 for $633 psf to $780 psf and sold the units this year for approximately $1,700 psf.
Source: EdgeProp Buddy (as at 22 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
It is notable that all three units are from the same stack and, therefore, share the same floor layout. The spacious and family-friendly layout could have contributed to the popularity and profitability of the units. The master bedroom and Bedroom 4 each have an attached bathroom, allowing Bedroom 4 to be used as a junior master bedroom. The units also have a yard area adjacent to the sizable kitchen, which can serve as a laundry area. The nearby utility room can be used as a helper’s room or a storeroom (see Floor Plan 1).
Source: EdgeProp Research
Top unprofitable unit share same layout as top profitable units
In contrast, the top three most unprofitable transactions took place in 2003 or 2005, shortly after Queens obtained its TOP in 2002 (see Table 2). Interestingly, all three sellers purchased their units in August 2000.
Source: EdgeProp Buddy (as at 18 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
It is notable that the unit with the highest loss of $310,000 is from the same stack as the three units with the highest profits, indicating that floor layout is unlikely to be a contributing factor to the unit’s record-high loss. The seller sold the unit in 2005 when the average price for Queens reached the bottom of $547 psf before recovering to $618 psf in 2006 (see Chart 1). It is noteworthy that the transacted sale price of $532 psf for the unprofitable unit is $15 psf lower than the average price for Queens that year.
Source: EdgeProp Market Trends (as at 28 October 2024)
It is also noteworthy that the unit that yielded the third-highest loss of $245,000 when sold in July 2003 for $555,000 ($607 psf) later generated a profit of $45,000 when the second owner sold the 915-sq ft unit in July 2006 for $600,000 ($656 psf).
Like the aforementioned profitable four-bedroom units, the two-bedroom unit also has an en-suite master bedroom, a yard, and a utility room (see Floor Plan 2).
Source: EdgeProp Research
Most recent unprofitable transactions generated profits for previous sellers
At the time of writing, no unprofitable transactions have taken place this year for Queens. The most recent unprofitable transaction for the leasehold condo was in September 2021. The unit involved was a two-bedroom unit measuring 915 sq ft (see Table 3). The unit on the 38th storey shares the same size and floor layout (see Floor Plan 2) as the unit with the third-highest loss.
Source: EdgeProp Buddy (as at 18 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
It is noteworthy that there have been three resale transactions for the unit at Block 10 #38-XX, and the transaction that took place in September 2021 is the only one that did not result in a profit for the seller. The first owner bought the unit directly from the developer in February 2002 and netted a profit of $592,000 after selling it in November 2010. The second owner sold the unit in August 2014 for $1.3 million, generating a smaller profit of $125,000. Unfortunately, the third owner broke even when the unit was sold for $1.3 million in September 2021 (see Table 4).
Source: EdgeProp Buddy (as at 18 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
Likewise, the unit at Block 10 #10-XX, which yielded the second most recent unprofitable transaction, has had two resale transactions, and only one of them resulted in a loss. The first owner bought the unit from the developer in February 2002 for $698,000 ($584 psf) and sold it in March 2013 for $1.58 million ($1,322 psf), resulting in a profit of $882,000. However, the second owner experienced a loss of $50,000 when the unit was sold in May 2019 for $1.53 million ($1,281 psf) (see Table 5).
Source: EdgeProp Buddy (as at 18 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
The same can be seen for the unit at Block 10 #36-XX, which is the third most recent unprofitable transaction. The unit has had two resale transactions, and only one of them resulted in a loss. The first owner earned a profit of $751,000 when the unit was sold for $1.48 million ($1,239 psf) in November 2011, but the second owner experienced a loss of $10,000 when the unit was sold for $1.47 million ($1,230 psf) in May 2018 (see Table 6).
Source: EdgeProp Buddy (as at 18 October 2024)
Note: Transactions with the same address are matched. Profitability of each round-trip transaction is based only on the change in asset price and does not take into account transaction costs and the effect of financing.
Only three leasehold neighbours
There are six condos with approximately 4,200 units within a 500m radius of Queens. However, only three of them, representing 2,840 units, have 99-year leasehold tenures, like Queens. The other three developments have freehold tenures.
The three leasehold condos are Commonwealth Towers (TOP in 2017), Queens Peak (TOP in 2020), and Stirling Residences (TOP in 2022). All of them are at least 15 years younger than Queens (TOP in 2002).
Queens Peak (736 units), which is located across the road from Queens, is the nearest neighbour. Commonwealth Towers (845 units) is adjacent to Queens Peak, while Stirling Residences (1,259 units) is the furthest away from Queens (see Map 3).
Source: EdgeProp LandLens (as at 23 October 2024)
The current average prices for Queens Peak ($2,203 psf) and Commonwealth Towers ($2,185 psf) are significantly higher than Queens ($1,715 psf), which could be because both condos are significantly newer than Queens (see Chart 2). However, Queens (38.3%) has achieved stronger price growth since 2020, compared to Queens Peak (25.4%) and Commonwealth Towers (19%). The more affordable price and stronger price growth could indicate that Queens is a better buy than its immediate neighbours.
Source: EdgeProp Market Trends (as at 23 October 2024)
Lower profits achieved by neighbours
It is also notable that the profits generated by sellers of units in Queens Peak and Commonwealth Towers are below $1 million, unlike those in Queens. The weaker price growth for the two condos could have contributed to their lower profits.
Since its launch in 2016, Queens Peak has achieved 156 profitable transactions and three unprofitable transactions. Profits for Queens Peak range from $29,000 to $735,000, while all three unprofitable transactions broke even for the sellers.
The unit that generated the highest profit of $735,000 was sold in August for $3.27 million ($2,170 psf). The seller had purchased the unit on the 43rd storey in February 2018 for $2.535 million ($1,682 psf). Like the top three most profitable transactions for Queens, the most profitable unit for Queens Peak is also a four-bedroom unit, but it is larger at 1,507 sq ft compared to Queens (1,410 sq ft).
The most profitable unit at Queens Peak has a layout suitable for families. It features sizable living and dining areas as well as a family room (see Floor Plan 3). Furthermore, the unit features two bedrooms with attached bathrooms, making it suitable for multi-generational households. The unit also features a private lift.
Source: EdgeProp Research
Since its launch in 2014, Commonwealth Towers has achieved 246 profitable and five unprofitable transactions. Profits range from $3,300 to $781,300, while losses range from $5,700 to $35,200.
The unit involved in the most profitable transaction is a three-bedroom unit on the 29th storey. The seller purchased the 1,055-sq ft unit in March 2017 for almost $1.669 million ($1,582 psf) and sold it in July for $2.45 million ($2,323 psf), resulting in a profit of $781,300. The compact three-bedroom unit features an en-suite master bedroom, a balcony, and a yard (see Floor Plan 4).
Source: EdgeProp Research
Profitability is affected by time of sale and purchase
The layout of the units in Queens is unlikely to have contributed to its unprofitable transactions because all three of its most unprofitable transactions involve units that had generated profits for their previous owners. Furthermore, the unit involved in the most unprofitable transaction shares the same size and layout as the units that achieved the top three highest profits.
The purchase and sale dates of the units are more likely to be the contributing factors. All units involved in the top three most unprofitable transactions for Queens were purchased directly from the developer in 2000 for $752 psf to $874 psf (see Table 2).
In 2000, the average new sale price for 99-year leasehold condos in District 3 was $852 psf, which increased further to $898 psf in 2001 before declining sharply to $579 psf in 2002 (see Chart 3). The prices paid for the three profitable units are in line with the average price for new leasehold condos in the district that year. However, the sellers had purchased their units when the market for new condos in District 3 was on an upswing.
Source: EdgeProp Market Trends (as at 23 October 2024)
The sellers of the unprofitable units sold them in either 2003 or 2005 (see Table 2). Unfortunately for the sellers, the average resale price for 99-year leasehold condos in District 3 started to decline from 2003 to 2005 before rallying in 2006. The average resale price was $538 psf in 2003 and fell to $504 psf in 2004 and $488 psf in 2005 before rising to $573 psf in 2006 (see Chart 4).
Source: EdgeProp Market Trends (as at 23 October 2024)
In contrast, the sellers of the top three most profitable units all sold their units this year when the resale market for leasehold condos in District 3 is trending upwards. The current average resale price for leasehold condos rose 5.2% y-o-y to $2,112 psf this year. The three sellers had purchased their units in either 2000 or 2002, which indicates that the sellers of the unprofitable units may not have suffered losses if they had held on to their properties longer, like the sellers of the profitable units.
Conclusion
Despite its leasehold tenure and age, Queens is still popular with buyers because of its well-connected and convenient location. Queens is located near Queenstown MRT Station, as well as several primary schools and malls.
Despite having a shorter remaining tenure than Queens Peak and Commonwealth Towers, Queens has achieved stronger price growth than its immediate neighbours. Queens’ strong price appreciation could explain its profitability. Since its launch, the condo has achieved 30 profitable transactions that yield profits of at least $1 million. Queen is comparatively more affordable than Queens Peak and Commonwealth Towers which could explain its popularity among buyers.
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