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Wait! Do All New Condo Launches Make Money?

Agents will tell you that all new condo launches make money.

The reason you believe this is because your BTO flat made money over the past 5 years. They talk about “The First Movers Advantage.” and we did a video on it too.

But have they told you about new launches where the owners didn’t even make $100k profits? 

Above is the profits made by owners in Santorini in Tampines. It was launched in 2014. 6 years later, today, you can barely see anyone making $80k profits.

In this case HDB BTO owners make more money after 5 years! Let’s take a look at another project just a few metres away from Santorini.

 

How Did This Condo Owner Make Over $600k Profits Over 4 Years?

As you can see from the above, less than 100 metres away, condo owners who bought in during launch made over $350,000 in profits over 4 years. 

If it’s all about location and the location isn’t good, why did a condo just a few metres down the road made almost 10x more?

 

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Do All New Condo Units Make The Same Amount of Profits?

Assuming you today you have the choice of these 2 units, both 3 bedders. Both are between the 6th to 8th floor unit.

Which unit would you buy?

A perfect 360 degree pool view from a perfect height (6th floor) or a security post and road view (8th floor)?

On 17 July 2015, the exact same day, these 2 units were bought.

$346,000 vs $181,000 Profit

A few years later, both owners sold, not at the same time, I will explain why time of exit is important later.

I’ve highlighted the 2 units below:

 

The security post unit sold for $160,000 higher than a pool view unit.

You may argue that the higher priced unit is 87 sqft bigger so for argument’s sake, let’s compare them based on sqft.

The security post unit would still make $315,000 or $120,000 more than a pool view unit.

Did The Units Have Different Layouts?

Although both units are 3 bedder apartments, let’s compare the layouts so we can understand why one unit sold for much higher profits even with a 360 pool view.

The 980 sqft unIt comes with an enclosed kitchen and 3 baths. This layout will attract a home buyer with 2-3 children due to it’s layout.

There is an additional utility room which can act as a storage area for this big family.

What about the pool view unit at #06-57.

It has a much smaller kitchen and 2 bathrooms. It is much compact, most likely bought by an ‘investor’ who is convinced that all 3 bedders are created equal, so why pay more?

Would a buyer with 2-3 children move into a property without a utility room and a good sized kitchen?

Or will they buy a property with a smaller kitchen, with 2 bathrooms and no utility room?

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Who Will You Sell To? When Should You Exit?

When you are choose the right new launch property, you will enjoy the first mover’s advantage.

You need to know exactly who you will be selling to and when to sell.

In this case, if you had bought a property at High Park Residences back in 2015, your buyer would probably be a family buying for own stay.

Their first priority would be space. In Fernvale, almost all the HDB upgraders who wants to buy a condo will not wait.

By the 5th year of the Minimum Occupation Period, most families would have grown to 4-5 members, half of them will have a maid as well.

They find it troublesome to rent and are ready to pay $300,000 extra to you

The owner sold in 2019. Why?

They sold strategically knowing that almost 30,000 BTO flats reached their 5th year especially around Fernvale, Sengkang and Punggol.

This created a surge of demand from HDB upgraders, most of them looking for ready to move in, new condos around the area.

Conclusion: The Right Unit Matters

If you have decided to choose a new launch condo and enjoy the profits of that decision then you are on the right track.

The right entry price does not only apply to a project overall but to specific units.

Look at the layouts you are buying carefully and identify your future buyers.

Do not assume the price is too high for your future buyer, you will be surprised how many buyers are ready to pay you 6 digit profits for their dream property.

Hi, We’re Heikal & Elfi from Herohomes™

We’ve helped over 400+ HDB Upgrader own a home that fulfil their current dreams and yet secure their financial futures.

As Singapore Accredited Mortgage Specialists™ we know how to structure your property ownership to create more wealth and happiness for you.

It’s time to take control of your property and let it help you in life.

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“We thought that fully paying our HDB flat was the right move. When Herohomes showed us the CPF accrued interest and interest lost we knew that we couldn’t depend on our property for retirement.

Now we own a condo that has a potential to increase within a few property cycles. We have placed our CPF back into the right place to grow our wealth and for retirement.”

- Mr Billy Ong & Family - The Minton Condo

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I’ve lost count the number of friends I’ve referred to him over the years. Happy to see his personal and professional growth in the real estate world.”

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