Are the owners of recently MOP Executive Condominiums making or losing money?

With the upcoming launch of a new executive condominium, Piermont Grand, it is a good time for us to look at how those newly MOP Executive Condominiums have performed over the past few years. These newly MOP-ed Executive Condominiums was also thought to be launched at relatively high prices during their time, between SGD 650 to 750 PSF. So, it would be interesting to see how well they have performed over the past few years.

For those uninitiated, Executive Condominiums (EC) are full facilities condominium developed by private developers with their land prices subsidized by the government. Buyers have to meet a set of criteria to purchase a brand new Executive Condo from the developer. In general, the buyer has to be Singaporean with a combined income of less than SGD 14,000 per month and have not enjoyed subsidized housing for more than two times. After they purchased, they can only sell the place after the projects have fulfilled the minimum occupation period of 5 years. For details on Executive Condo, you may visit https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/eligibility/executive-condominiums.

With that, let’s head back to the main topic.

In this article, we shall look at Executive Condominiums that received their Temporary Occupation Permit (TOP) between Jul 2013 and  May 2014. The start period used is because Prive is the 1^st Executive Condo to launched since the break from the last Executive Condo, La Casa, that TOP in 2008. And May 2014 is because those Executive Condo that TOP thereafter just started their resale activity.

Based on the time frame chosen, there is a total of 5 Executive Condos that TOP between Jul 2013 and May 2014 as below:

Analysis based on Average PSF

From the transacted average price per square foot (PSF) trend, it is clear that all the Executive Condos that just MOP recently has made remarkable capital appreciation over time. Esparina Residences has made an impressive gain of 46.08% over 9 years, followed by Prive with 45.16% gain. The rest of the projects are faring pretty well too, at around 25% gain over the last 8 years.

Executive Condominium VS Private Condominium

But how do the Executive Condos compared to their comparable counterpart, Private Condos?

Compared to Private Condo of similar age (TOP for 5 to 6 years) and located outside the central region, Executive Condos have performed better. The average transacted PSF of Executive Condos have increased by an estimate of 54.70% compared to the Private Condos of 43.16%.

How does each Executive Condominium stack up against Private Condominiums within the same locality?

One may argue that the earlier section may not be representative of how Executive Condominiums performed against Private Condominiums as Executive Condos may be concentrated in a certain region of Singapore whereas Private Condominiums are more spread out across Singapore. Henceforth, in this section, we shall look at how the individual Executive Condo performed against their nearby comparable Private Condos.

Prive VS Fellow Private Condominiums

For the period between 2012 to 2018, Prive has clocked in an impressive increment in its average transacted PSF of 29.37%, with its fellow private condominium trailing behind. Parc Centro’s average transacted PSF increased by 20.26%, followed by Waterbay at 14.31%, A Treasure Trove at 14.05% and Watertown at 12.45%.

In terms of rental yield, Prive triumphs its private condominium counterparts. Based on the last 8 quarters rental and resale transactions data, Prive has a rental yield of close to 3.09%, whereby Parc Centros and Waterbay has a pretty good rental yield between 3 to 3.05%, while Watertown has a rental yield of around 2.9% and A Treasure Trove a rental yield of around 2.82%.

Esparina VS Jewel @ Buangkok

Within the same time period 2013 to 2019, the average transacted PSF for Esparina Residences increased by 23.38% compared to Jewel @ Buangkok, whose average transacted PSF increased by 8.59%.

Based on the last 8 quarters of the rental and resale transactions, Esparina Residences beats Jewel @ Buangkok flat down on its rental yield. Esparina Residences’s rental yield is an impressive 3.9% whereas Jewel @ Buangkok’s rental yield is below 3%.

Austville Residences VS Riversound Residence

For Austville Residences, it is in a close fight with Riversound Residences, its average transacted PSF increased by 24.58% against 20.14% of Riversound Residences. But still, Austville Residences beats Riversound Residences.

However, Austville Residences loses to Riversound Residence in term of rental yield. Riversound Residence’s rental yield is around 3.13% whereas Austville is at 3.05%.

Belysa VS Livia & NV Residences

Between 2011 to 2019, Belysa outperforms its private condominium counterparts. Belysa’s average transacted PSF increased by 24.43% whereas NV Residences’s average transacted PSF increased by 10.92%. Disappointingly, Livia experiences a fall in its average transacted PSF of 0.34% during this comparison period.

Like Austville Residences, Belysa performed badly in term of rental yield when compared to its private condominium counterpart. Belysa has a rental yield of 3.04% whereas the rental yield of NV Residences and Livia are 3.24% and 3.10% respectively.

Note: The Canopy is not compared as I am unable to identify suitable private condominiums for comparison. If you know of any, feel free to write to me.

Conclusion

Indeed, based on recent MOP-ed Executive Condominiums, like many have touted, there is a good chance to make money by buying a brand new Executive Condominium and selling it in the resale market. However, if you are planning to hold the Executive Condominium for rental income, you have to put in more effort to analyse its rental potential to maximize your dollars. Nonetheless, Executive Condominium, in general, is a good investment and it makes it easier for you to own your 2^nd properties. How? Well, that’s a topic for another blog. So, do subscribe to my newsletters to receive my next exciting blog post.