5 interesting takeaways from the rare property losses in Singapore's booming market in 2022

5 interesting takeaways from the rare property losses in Singapore's booming market in 2022
PHOTO: Stackedhomes

2022 was one of the hottest years on record for the property market. Housing supply was (and still is) at a critically low point, and prices rose across all segments despite cooling measures. It would seem as though sellers couldn’t take a bad step during 2022.

This is why we thought it would be fascinating to see those who actually lost money in 2022 (however few there were) and see what commonalities we could find with the data:

1. Just over five per cent of condo transactions in 2022 were losses

Type Volume
Breakeven 28
Gain 13,210
Loss 733
Total 13,971

We counted 13,971 private non-landed transactions with previous buy records in 2022. Of all the transactions we looked at, around 5.25 per cent (733 transactions) were losses.

Note: In 2022, there were 22,888 private non-landed (including ECs) transactions and 14,567 of them are sub sale and resale transactions (new sales are of no interest here since there’s no loss on a new sale as it’s the first purchase). Of these, 13,971 had a record allowing us to record its gain or loss. This is by no means representative of the entire property market as URA only records transactions where caveats are lodged.

The vast majority, unsurprisingly, were profitable as it was a hot market (94.5 per cent, or 13,210 transactions, were profitable). A tiny number, just 28 transactions, broke even.

While 5.25 per cent is a small number, it’s still interesting to try and observe where and how transactions can go still go wrong; even during a strong seller’s market.

2. Even with the housing supply at a low, some people lost money on sub sale transactions

Sub sales (i.e., selling a new launch unit before it’s built) are usually expected to do well in a low-supply situation. Home buyers are in urgent need of units they can move into sooner, and some buyers may be willing to offer even more than the price of a new sale.

Even so, some people managed to lose money in sub sales. The highest recorded loss was $297,600 before factoring in the Sellers Stamp Duty (SSD) of four per cent (this was a unit sold in Riviere). Here are some of the others we found: 

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Project Name Price Size (sqft) $PSF Buy Price Buy Date Years Held Quantum Loss per cent Loss
RIVIERE $3,900,000 1,711 $2,279 $4,197,600 11/5/2020 2.1 -$297,600.00 -7.0 per cent
PARK COLONIAL $2,200,000 1,410 $1,560 $2,403,000 12/26/2018 3.1 -$203,000.00 -8.0 per cent
GEM RESIDENCES $1,800,000 1,055 $1,706 $1,939,000 6/23/2018 4.1 -$139,000.00 -7.0 per cent
SKY EVERTON $1,575,000 646 $2,439 $1,707,000 7/1/2019 3.1 -$132,000.00 -8.0 per cent
MARTIN MODERN $1,880,000 764 $2,460 $1,990,800 3/30/2019 3.4 -$110,800.00 -6.0 per cent
BUKIT 828 $1,890,000 1,335 $1,416 $1,982,000 6/28/2020 1.6 -$92,000.00 -5.0 per cent
33 RESIDENCES $1,030,000 700 $1,472 $1,113,000 9/16/2018 3.8 -$83,000.00 -7.0 per cent
MIDTOWN BAY $1,320,000 463 $2,852 $1,390,000 10/12/2019 2.4 -$70,000.00 -5.0 per cent
ONE MEYER $1,615,000 614 $2,632 $1,665,000 3/13/2019 3.4 -$50,000.00 -3.0 per cent
THE WOODLEIGH RESIDENCES $1,360,000 646 $2,106 $1,394,000 11/10/2018 3.6 -$34,000.00 -2.0 per cent
AFFINITY AT SERANGOON $1,810,000 1,249 $1,450 $1,842,000 6/2/2018 3.8 -$32,000.00 -2.0 per cent

We do note, however, that losses from sub sale units on average are still lower than losses from resale. The sub sale losses averaged -5.48 per cent, whereas among resale losers, the average was – 8.27 per cent.

We also compared between sale types, and found that those who bought new and resold (new sale to resale) lost the highest on average, at – 8.5 per cent. This could be explained by the mispricing that could occur during a new launch considering the mismatch of expectations versus reality later on.

Interestingly, those who went from sub sale to resale chalked up a lower loss, at an average of -7.4 per cent.

Sale Type Average per cent Loss
New Sale to Resale -8.5 per cent
New Sale to Sub Sale -5.5 per cent
Resale to Resale -8.1 per cent
Sub Sale to Resale -7.4 per cent

That’s surprising, since subsale units usually cost more than new sale units (that’s usually the reason for the first buyer deciding to sell before completion). We don’t really have an explanation for this, other than perhaps higher interest rates giving some initial buyers cold feet.

3. The highest average losses (by overall return) are also found in the districts with the highest transaction volumes

District per cent Loss Volume
1 -12  per cent 66
2 -7 per cent 32
3 -6 per cent 13
4 -12 per cent 68
5 -6 per cent 22
7 -5 per cent 5
8 -6 per cent 18
9 -13 per cent 123
10 -8 per cent 52
11 -8 per cent 20
12 -5 per cent 16
13 -6 per cent 8
14 -5 per cent 36
15 -6 per cent 36
16 -5 per cent 45
17 -2 per cent 9
18 -4 per cent 9
19 -4 per cent 42
20 -6 per cent 5
21 -3 per cent 2
22 -7 per cent 3
23 -4 per cent 30
25 -5 per cent 9
27 -5 per cent 13
28 -10 per cent 21

The highest losses were in districts 1 (Marina Square, Boat Quay), 4 (Sentosa), and 9 (Cairnhill, Orchard).

This is unsurprising, as during the 2007-2012 property market period, projects such as Reflections At Keppel Bay (District 4) came up and saw a lot of losses. In District 1, projects such as The Sail @ Marina Bay, and Marina Bay Suites also saw a lot of losses. In District 9, projects such as Helios Residences and Scotts Square also saw big losses.

We can say that the higher activity in these areas is due to the return of affluent foreign buyers, as well as investors who foresee an uptick in the rental market. However, the highest losses also tended to come from these areas.

Prime region condos have a very high quantum, and discounts to move them tend to be quite substantial (this is partly why the “million-dollar Orchard/Sentosa loss” is almost a cliché). At these price levels, the price drops might not really cause a dent for some of these wealthy owners, and they would be more willing to sell at a big loss and move on than your average owner.

4. Freehold status didn’t seem to make much difference

For those who believe in freehold condos, we have some bad news. Among losses, freehold condos took a marginally worse hit, with losses averaging 8.49 per cent.

Leasehold condo losses averaged 8.05 per cent; perhaps due to their lower initial prices (freehold condos cost typically cost 15 to 20 per cent more as a rule of thumb).

It’s a slim gap between the two; but it does go to show that freehold doesn’t always make much difference.

The oddest thing we found was that, among losing transactions, those with longer holding periods fared worse

Conventional wisdom holds that, the longer you hold a property, the higher the returns – or at least the lower the losses – should be. But when we plotted the holding period against the losses in a scatterplot, we found the opposite.

Before jumping to conclusion that “the longer you hold, the more you lose”, here’s what the scatterplot looks like if we take gains into consideration too:

So what could explain the strange pattern in the losses?

When we dug into the transaction data, we found some things of interest:

  • Newton Planning Area saw 57 out of 733 losses with an average loss of 15 per cent. This is higher than the 8per cent loss on average across all areas. The majority were purchased in 2007 – 2012.
  • The Southern Island Planning Area (Sentosa) saw 30 out of 733 losses, the average loss being 16 per cent.
  • The Downtown Core Planning Area saw 96 out of 733 losses with an average loss of 10per cent (also mainly bought between 2007 – 2013)
  • Bukit Merah (basically most of which are Reflections At Keppel Bay) had 60 out of 733 losses, averaging a 9per cent loss, and was purchased between 2007 – 2012.

Do you see a pattern here? Most were purchased between 2007 – 2012. As a result, the data is skewed towards heavier losses in the 10-15 year holding period.

This makes sense since during this period, property prices were moving fast which gave way to greater chances of property mispricing in the primary market. In other words, developers may have overhyped certain projects during the run-up in prices, and when reality came, these prices were not a true reflection (get it?!) of prices then.

To confirm this, we looked deeper and found the following:

  • Newton: 60 per cent of losses were new sales, 3 per cent were sub sales
  • Southern Island: 27 per cent were new sales, 40 per cent were sub sales
  • Downtown Core: 52 per cent were new sales, 12.5 per cent were sub sales
  • Bukit Merah: 65 per cent were new sales, 6 per cent were sub sales

As you can see, most of these purchases occurred in the primary market (or in the case of sub sales, when the project hasn’t reached TOP).

Apart from that, we also wanted to highlight two outliers in the scatterplot which registered losses even though they were held for more than two decades. This would be an extreme oddity in the market and are likely due to special circumstances (e.g., divorce, selling to their own children, or so forth).

Project Name Price Size (sqft) $PSF Buy Price Buy Date Years Held Quantum Loss % Loss
CHELSEA GARDENS $3,700,000 1959 $1,889 $3,890,000 6/12/1997 24.6 -$190,000.00 -4.9%
CHANGI GREEN $980,000 872 $1,124 $1,250,000 10/1/1999 22.7 -$270,000.00 -21.6%

On a related note, here’s another way to view the losses:

Year of Purchase Vs. Loss

Here we plot the year of the property purchase, to the percentage loss in its transaction. Again, you can see that a longer holding period seems to correspond to higher losses.

5. When it comes to property types, detached houses suffered the worst among losing transactions

Property Type Average of quantum Average of percent_gain Average of annualised_returns
Apartment -$176,369 -7.7% -1.0%
Condominium -$382,004 -8.8% -1.0%
Detached House -$2,666,540 -16.0% -2.5%
Executive Condominium -$58,600 -5.4% -0.6%
Semi-Detached House -$350,012 -8.2% -1.6%
Terrace House -$402,571 -11.1% -1.3%

Detached houses lost around 16 per cent on average, with terrace houses following at a loss of about 11 per cent.

Among the losing transactions, Executive Condos (ECs) were the most spared, with average losses at just around 5.3 per cent.

This is likely due to the initial pricing of the properties. ECs are cheaper on average, which diminishes losses for the first batch of sellers.

Biggest losers by name

The following projects saw the biggest losses based on overall loss (quantum):

Project Name Price Size (sqft) $PSF Buy Price Buy Date Years Held Quantum Loss % Loss Annualised Loss Type of Sale Tenure
THE MARQ ON PATERSON HILL $13,380,000 3089 $4,331 $20,542,400 40865 10.8 -$7,162,400 -34.90% -3.90% New Sale to Resale Freehold
PATERSON SUITES $13,800,000 6663 $2,071 $20,000,000 40865 11.1 -$6,200,000 -31.00% -3.30% Resale to Resale Freehold
REFLECTIONS AT KEPPEL BAY $5,850,000 3993 $1,465 $9,981,000 39212 15.0 -$4,131,000 -41.40% -3.50% New Sale to Resale Leasehold
SEASCAPE $5,900,000 3380 $1,746 $9,600,000 40555 11.8 -$3,700,000 -38.50% -4.00% New Sale to Resale Leasehold
REFLECTIONS AT KEPPEL BAY $12,200,000 6835 $1,785 $15,554,000 39321 15.0 -$3,354,000 -21.60% -1.60% New Sale to Resale Leasehold
MARINA BAY SUITES $5,000,000 2691 $1,858 $8,250,000 41619 8.7 -$3,250,000 -39.40% -5.60% New Sale to Resale Leasehold
BELLE VUE RESIDENCES $4,702,000 3552 $1,324 $7,400,000 41155 9.5 -$2,698,000 -36.50% -4.70% Resale to Resale Freehold
THE LUMOS $5,737,875 2433 $2,359 $8,433,000 39314 15.0 -$2,695,125 -32.00% -2.50% New Sale to Resale Freehold
MARINA COLLECTION $5,050,000 3412 $1,480 $7,700,000 40324 12.5 -$2,650,000 -34.40% -3.30% New Sale to Resale Leasehold
CLIVEDEN AT GRANGE $5,700,000 2153 $2,648 $8,341,040 39297 14.7 -$2,641,040 -31.70% -2.60% New Sale to Resale Freehold
MARINA BAY RESIDENCES $9,400,000 4435 $2,120 $11,979,000 39274 14.8 -$2,579,000 -21.50% -1.60% New Sale to Resale Leasehold
CLIVEDEN AT GRANGE $8,300,000 2842 $2,921 $10,824,540 39286 14.8 -$2,524,540 -23.30% -1.80% New Sale to Resale Freehold
SILVERSEA $9,500,000 4467 $2,127 $12,000,000 41745 8.0 -$2,500,000 -20.80% -2.90% New Sale to Resale Leasehold
GRANGE INFINITE $5,800,000 2573 $2,255 $8,236,533 39350 14.5 -$2,436,533 -29.60% -2.40% New Sale to Resale Freehold
CLIVEDEN AT GRANGE $8,000,000 2842 $2,815 $10,336,920 39235 14.9 -$2,336,920 -22.60% -1.70% New Sale to Resale Freehold
CLIVEDEN AT GRANGE $7,600,000 2842 $2,674 $9,935,000 39281 14.8 -$2,335,000 -23.50% -1.80% New Sale to Resale Freehold
THE ARCADIA $7,700,000 7503 $1,026 $10,000,000 40401 11.9 -$2,300,000 -23.00% -2.20% Resale to Resale Leasehold
N.A. (8 Nassim Hill) $9,790,000 4209 $2,326 $12,000,000 40407 11.5 -$2,210,000 -18.40% -1.70% New Sale to Resale Freehold
MARINA COLLECTION $3,700,000 2185 $1,693 $5,877,650 41192 9.7 -$2,177,650 -37.00% -4.70% Resale to Resale Leasehold
CLIVEDEN AT GRANGE $7,700,000 2842 $2,710 $9,864,600 39288 14.9 -$2,164,600 -21.90% -1.70% New Sale to Resale Freehold
HELIOS RESIDENCES $3,950,000 1668 $2,368 $6,110,700 41158 9.5 -$2,160,700 -35.40% -4.50% Resale to Resale Freehold
HELIOS RESIDENCES $3,950,000 1701 $2,323 $6,037,485 39497 14.2 -$2,087,485 -34.60% -2.90% Sub Sale to Resale Freehold
HELIOS RESIDENCES $2,800,000 1281 $2,186 $4,856,600 41473 8.5 -$2,056,600 -42.30% -6.30% Resale to Resale Freehold
HELIOS RESIDENCES $3,980,000 1701 $2,340 $6,000,000 39420 15.0 -$2,020,000 -33.70% -2.70% New Sale to Resale Freehold
CITYVISTA RESIDENCES $5,200,000 2626 $1,980 $7,152,996 39267 15.4 -$1,952,996 -27.30% -2.10% New Sale to Resale Freehold
CITYVISTA RESIDENCES $4,950,000 2626 $1,885 $6,827,600 39381 14.7 -$1,877,600 -27.50% -2.20% New Sale to Resale Freehold
THE OCEANFRONT @ SENTOSA COVE $6,730,000 3025 $2,225 $8,600,000 40486 11.4 -$1,870,000 -21.70% -2.10% Sub Sale to Resale Leasehold
REFLECTIONS AT KEPPEL BAY $7,308,000 3380 $2,162 $9,173,000 39321 15.0 -$1,865,000 -20.30% -1.50% New Sale to Resale Leasehold
SEASCAPE $4,280,000 2164 $1,978 $5,924,100 40296 12.3 -$1,644,100 -27.80% -2.60% New Sale to Resale Leasehold
HELIOS RESIDENCES $2,838,000 1281 $2,216 $4,481,500 41235 9.3 -$1,643,500 -36.70% -4.80% Resale to Resale Freehold

Here are the biggest losers by % loss:

Project Name Price Size (sqft) $PSF Buy Price Buy Date Years Held Quantum Loss % Loss Annualised Loss Type of Sale Tenure
HELIOS RESIDENCES $2,800,000 1281 $2,186 $4,856,600 7/18/2013 8.5 -$2,056,600 -42.30% -6.3% Resale to Resale Freehold
REFLECTIONS AT KEPPEL BAY $5,850,000 3993 $1,465 $9,981,000 5/10/2007 15.0 -$4,131,000 -41.40% -3.5% New Sale to Resale Leasehold
THE SCOTTS TOWER $1,300,000 657 $1,980 $2,200,500 4/24/2013 9.5 -$900,500 -40.90% -5.4% New Sale to Resale Leasehold
THE CLIFT $1,400,000 829 $1,689 $2,326,400 7/9/2012 10.1 -$926,400 -39.80% -4.9% Resale to Resale Leasehold
MARINA BAY SUITES $5,000,000 2691 $1,858 $8,250,000 12/11/2013 8.7 -$3,250,000 -39.40% -5.6% New Sale to Resale Leasehold
SEASCAPE $5,900,000 3380 $1,746 $9,600,000 1/12/2011 11.8 -$3,700,000 -38.50% -4.0% New Sale to Resale Leasehold
MARINA COLLECTION $3,700,000 2185 $1,693 $5,877,650 10/10/2012 9.7 -$2,177,650 -37.00% -4.7% Resale to Resale Leasehold
HELIOS RESIDENCES $2,838,000 1281 $2,216 $4,481,500 11/22/2012 9.3 -$1,643,500 -36.70% -4.8% Resale to Resale Freehold
BELLE VUE RESIDENCES $4,702,000 3552 $1,324 $7,400,000 9/3/2012 9.5 -$2,698,000 -36.50% -4.7% Resale to Resale Freehold
HELIOS RESIDENCES $3,950,000 1668 $2,368 $6,110,700 9/6/2012 9.5 -$2,160,700 -35.40% -4.5% Resale to Resale Freehold
THE MARQ ON PATERSON HILL $13,380,000 3089 $4,331 $20,542,400 11/18/2011 10.8 -$7,162,400 -34.90% -3.9% New Sale to Resale Freehold
HELIOS RESIDENCES $3,950,000 1701 $2,323 $6,037,485 2/19/2008 14.2 -$2,087,485 -34.60% -2.9% Sub Sale to Resale Freehold
MARINA COLLECTION $5,050,000 3412 $1,480 $7,700,000 5/26/2010 12.5 -$2,650,000 -34.40% -3.3% New Sale to Resale Leasehold
HELIOS RESIDENCES $3,058,000 1313 $2,329 $4,623,000 8/6/2007 15.3 -$1,565,000 -33.90% -2.7% New Sale to Resale Freehold
HELIOS RESIDENCES $3,980,000 1701 $2,340 $6,000,000 12/4/2007 15.0 -$2,020,000 -33.70% -2.7% New Sale to Resale Freehold
OUE TWIN PEAKS $1,238,000 570 $2,170 $1,858,605 12/28/2016 5.9 -$620,605 -33.40% -6.6% Resale to Resale Leasehold
HELIOS RESIDENCES $2,800,000 1313 $2,132 $4,152,000 7/31/2007 14.9 -$1,352,000 -32.60% -2.6% New Sale to Resale Freehold
THE LUMOS $5,737,875 2433 $2,359 $8,433,000 8/20/2007 15.0 -$2,695,125 -32.00% -2.5% New Sale to Resale Freehold
CLIVEDEN AT GRANGE $5,700,000 2153 $2,648 $8,341,040 8/3/2007 14.7 -$2,641,040 -31.70% -2.6% New Sale to Resale Freehold
MARINA BAY SUITES $3,100,000 1593 $1,946 $4,506,400 7/9/2012 9.7 -$1,406,400 -31.20% -3.8% New Sale to Resale Leasehold
PATERSON SUITES $13,800,000 6663 $2,071 $20,000,000 11/18/2011 11.1 -$6,200,000 -31.00% -3.3% Resale to Resale Freehold
OUE TWIN PEAKS $1,200,000 549 $2,186 $1,714,000 5/17/2013 8.6 -$514,000 -30.00% -4.0% New Sale to Resale Leasehold
GRANGE INFINITE $5,800,000 2573 $2,255 $8,236,533 9/25/2007 14.5 -$2,436,533 -29.60% -2.4% New Sale to Resale Freehold
THE SAIL @ MARINA BAY $2,430,000 1313 $1,850 $3,450,000 9/25/2013 8.7 -$1,020,000 -29.60% -4.0% Resale to Resale Leasehold
THE SAIL @ MARINA BAY $2,550,000 1184 $2,154 $3,600,000 4/4/2011 11.3 -$1,050,000 -29.20% -3.0% Resale to Resale Leasehold
VIDA $1,080,000 527 $2,048 $1,513,000 1/13/2011 11.6 -$433,000 -28.60% -2.9% Resale to Resale Freehold
ONE SHENTON $2,560,000 1572 $1,629 $3,567,120 2/9/2011 11.2 -$1,007,120 -28.20% -2.9% New Sale to Resale Leasehold
MARINA BAY SUITES $3,808,000 2045 $1,862 $5,304,000 5/26/2010 12.5 -$1,496,000 -28.20% -2.6% New Sale to Resale Leasehold
SEASCAPE $4,280,000 2164 $1,978 $5,924,100 4/28/2010 12.3 -$1,644,100 -27.80% -2.6% New Sale to Resale Leasehold
REFLECTIONS AT KEPPEL BAY $3,860,700 2271 $1,700 $5,339,200 4/26/2007 14.9 -$1,478,500 -27.70% -2.2% Sub Sale to Resale Leasehold

In the property market, exceptions are the norm

All of this goes to show that conventional wisdom doesn’t always hold true. The property market – especially one as dynamic as Singapore – can be unpredictable.

Sellers can still make losses in a booming market; and conventional beliefs about holding periods and sub sales can be proven wrong.

ALSO READ: Beyond 2022: How Singapore's development will affect the property market (Sembawang and Woodlands)

It’s possible that some, or perhaps even most, of these losses were due to exceptional circumstances: the death of a co-owner, drastic changes in income, or selling between family members (these may be at a steep discount, such as if someone sells to a sibling or child).

But it’s not impossible that it can happen, and this also means hope for home buyers. Don’t stop looking, because you can see here that at least 733 buyers managed to transact at a lower price – even in the 2022 property market.

 This article was first published in Stackedhomes.

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