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Are cluster landed homes still profitable? Here's how they've performed over 10 years

Are cluster landed homes still profitable? Here's how they've performed over 10 years
PHOTO: Stackedhomes

Cluster homes are in that weird spot between landed housing and condos.

On the one hand, they're landed; on the other hand, you still have an MCST, and common facilities. But next to walk-up apartments, this may be one of the least studied and understood housing segments: Besides being relatively few in number, they tend to have small unit counts with more volatile pricing.

This week, we took a look at how these rare properties have been performing:

Average price growth for cluster housing (freehold)

Year Average of Unit Price ($ PSF) Change
2013 $865  
2014 $912 5.4 per cent
2015 $799 -12.3 per cent
2016 $726 -9.2 per cent
2017 $760 4.8 per cent
2018 $797 4.8 per cent
2019 $802 0.7 per cent
2020 $747 -6.9 per cent
2021 $814 8.9 per cent
2022 $985 21.1 per cent
2023 $1,038 5.3 per cent
Average Change 2.26 per cent

From 2013 to the present, freehold cluster homes have seen an average gain of 2.26 per cent. As we mentioned above, however, these units are not common, and 1,760 transactions over 10 years is a very low number.

Nonetheless, let's contrast this against leasehold cluster homes:

Average price growth for cluster housing (leasehold) 

Year Average of Unit Price ($ PSF) Change
2013 $807  
2014 $810 0.4 per cent
2015 $780 -3.7 per cent
2016 $674 -13.6 per cent
2017 $666 -1.1 per cent
2018 $740 11.1 per cent
2019 $752 1.5 per cent
2020 $716 -4.7 per cent
2021 $894 24.8 per cent
2022 $924 3.3 per cent
2023 $956 3.4 per cent
Average Change 2.15 per cent

The average performance is slightly inferior to freehold counterparts, coming in at an average of close to 2.15 per cent. However, we're still working with low transaction volumes, with just 1,582 transactions over the past decade.

While freehold cluster homes performed slightly better on average, there could be other factors that aren't visible here.

When leasehold properties are down to 60 years or fewer, banks often lower the maximum loan amount; the loan-to-value (LTV) ratio may be reduced to 55 per cent from 75 per cent, resulting in a much higher cash outlay.

This could drive prices down, especially since landed homes tend to be bigger and fetch a higher quantum.

Some realtors have also opined that older leasehold landed properties are harder to sell.

Most landed property buyers are looking for intergenerational assets, rather than something with 60 or fewer years on the lease. Evidence for this is anecdotal though, and the sentiment for such homes may be different as compared to true landed homes.

After all, the appeal of a cluster home is the bigger space and landed living at a more affordable (and less maintenance) price.

Now let's look at average annualised returns:

Project Tenure Avg Annualised (%) Avg Holding Period (Yr) Average Profit ($) Avg Profit (%) No. of Tnx
Chateau La Salle  Freehold 33.6% 0.3 $300,000 9.1% 1
Aston Residences 946 yrs from Jan 1, 1938 21.3% 2.7 $816,667 39.2% 3
Hillsgrove 999 yrs from Dec 2, 1878 13.6% 3.6 $1,385,000 56.5% 2
Dunsfold 18 Freehold 13.1% 2.9 $1,200,000 42.9% 1
The Hilloft  999 yrs from Oct 12, 1885 10.1% 2.3 $730,000 24.7% 1
Marlene Ville  Freehold 9.0% 4.1 $807,963 40.1% 3
Horizon Green  99 yrs from June 23, 1995 8.6% 4.2 $699,320 39.2% 4
The Silver Spurz  Freehold 8.0% 4.6 $818,500 44.8% 2
Surin Villas  Freehold 7.5% 5.6 $1,200,000 50.0% 1
Le Royce @ Leith Park  Freehold 7.2% 5.7 $900,000 48.6% 1
Solaris Residences  Freehold 7.0% 6.1 $1,050,000 51.2% 1
Affinity at Serangoon  99 yrs from May 18, 2018 6.7% 4.3 $759,990 33.1% 3
Cabana  103 yrs from April 23, 2009 6.6% 5.2 $620,298 33.5% 7
Kent Ridge Hill Residences  99 yrs from Nov 10, 2018  6.6% 2.8 $569,380 19.6% 1
Parkwood Collection  99 yrs from Sept 22, 2017  6.6% 3.1 $727,000 21.9% 1
Belgravia Green  Freehold 6.4% 3.7 $752,801 24.0% 7
Montclair @ Whitley Freehold 6.0% 4.8 $932,667 33.6% 3
Palm Tree Nines  Freehold 6.0% 6.5 $690,000 45.7% 1
Goodman Crest  Freehold 6.0% 4.3 $1,062,500 29.4% 2
Shamrock Villas  Freehold 5.8% 3.7 $880,000 23.2% 1
The Woods  99 yrs from March 9, 2010 5.7% 3.0 $350,000 17.9% 1
Namly Court  Freehold 5.6% 3.6 $850,000 24.7% 2
Whitley Villas  Freehold 5.5% 4.8 $900,000 29.0% 1
Watercove Freehold 5.3% 4.2 $669,254 26.5% 7
The Shaughnessy  99 yrs from March 19, 2001 5.1% 5.5 $407,568 27.6% 19
The Top Residence  999 yrs from July 14, 1884 5.1% 3.9 $450,000 21.4% 1
Charlton Residences Freehold 5.0% 3.8 $570,000 20.4% 1
Estrivillas  Freehold 4.9% 5.0 $920,000 27.2% 1
Riverfront Residences 99 yrs from May 31, 2018 4.9% 3.2 $415,000 16.5% 1
Botanic @ Cluny Park  Freehold 4.8% 5.9 $2,100,000 32.1% 2
Summer Gardens  99 yrs from June 23, 1995 4.7% 5.8 $343,333 18.3% 3
Binjai Crest  99 yrs from Dec 13, 1996 4.6% 5.4 $452,953 22.6% 9
Tranquilia @ Kismis Freehold 4.5% 5.7 $980,000 28.8% 1
Kew Gate 

99 yrs from Feb 3, 1994

4.4% 5.4 $360,600 28.4% 5
Legend @ Jansen 999 yrs from Sept 1, 1876 4.2% 5.0 $444,333 23.7% 3
Caca Fidelio  Freehold 4.1% 3.9 $320,000 17.0% 1
Elite Residences  Freehold 4.1% 4.6 $521,700 20.2% 1
Chestnut Residences 999 yrs from Sept 25, 1882 4.1% 4.5 $450,000 19.6% 1
Springhill  99 yrs from Jan 7, 2002 4.0% 5.3 $299,280 22.2% 29
Jansen 8 Freehold 4.0% 5.1 $476,000 20.2% 3
The Springfield  99 yrs from June 22, 1995 3.9% 6.3 $337,833 22.5% 12
Infinium  Freehold 3.7% 4.1 $507,403 17.1% 4
D’Elias 999 yrs from March 22, 1881  3.7% 3.9 $273,000 15.2% 1
Belgravia Ace  Freehold 3.6% 2.1 $341,000 7.7% 1
The Gardens at Gerald  999 yrs from Jan 1, 1879 3.6% 4.0 $289,500 15.2% 2
Trussville  Freehold 3.6% 4.3 $282,000 16.4% 1
Fortune View  Freehold 3.6% 5.0 $266,250 16.8% 4
Milford Villas  Freehold 3.6% 7.9 $625,000 33.7% 2
D’ Kenaris 999 yrs from Jan 1, 1879 3.5% 7.7 $600,000 30.8% 1
One Surin  Freehold 3.5% 5.3 $497,424 19.2% 8
The Greenwood  103 yrs from June 2, 2008  3.5% 4.8 $530,000 18.0% 1
Water Villas  Freehold 3.3% 5.5 $370,000 16.1% 2
The Morris Residences Freehold 3.3% 4.9 $493,333 17.7% 3
Hillcrest Villa  99 yrs from Aug 3, 2006  3.2% 5.0 $468,273 16.2% 22
Dublin Lodge Freehold 3.2% 9.3 $1,700,000 34.0% 1
Ridgewood  999 yrs from July 6, 1885  3.2% 5.8 $962,500 27.9% 2
Lotus Ville  Freehold 3.1% 5.9 $573,028 18.9% 4
High Park Residences  99 yrs from Nov 5, 2014  3.0% 5.9 $420,000 20.7% 5
Palm Grove Regency 999 yrs from Dec 2, 1878 2.8% 4.0 $231,667 10.6% 3
Suncottages  999 yrs from Jan 9, 1883 2.8% 4.8 $10,000 2.3% 2
Medallion  Freehold 2.8% 4.9 $320,000 14.7% 1
The Teneriffe  99 yrs from Sept 7, 1996   2.8% 5.6 $374,808 14.7% 11
Rivertrees Residences  99 yrs from Aug 28, 2013  2.7% 5.9 $215,433 13.0% 3
The Ambience  999 yrs from March 1, 1874 01/05/1874 2.6% 4.4 $235,000 12.0% 2
Watten Residences Freehold 2.6% 4.3 $410,000 11.9% 5
Horizon Gardens  99 yrs from June 23, 1995  2.6% 7.2 $444,000 23.9% 3
Kingsford Waterbay 99 yrs from March 3, 2014  2.5% 4.5 $254,950 14.1% 4
Thomson Three  99 yrs from Nov 7, 2012 2.5% 5.5 $425,000 15.3% 2
Jewel @ Chuan Hoe  999 yrs from Jan 1, 1886  2.5% 8.7 $575,000 25.9% 2
Wolskel Lodge  Freehold 2.5% 3.7 $151,000 8.0% 2
Place-8 Freehold 2.5% 3.3 $230,000 8.4% 1
Gentle Reflections Freehold 2.5% 6.5 $550,000 17.2% 1
Waterfront @ Faber 99 yrs from Sept 17, 2013  2.4% 6.7 $395,725 16.7% 4
Serangoon Garden View 999 yrs from Jan 23, 1879 2.4% 3.6 $162,000 8.8% 1
Residence 8 Freehold 2.3% 5.9 $700,000 14.6% 1
Fernhill Cottage  Freehold 2.3% 3.3 $220,000 7.8% 1
Eight Riversuites  99 yrs from July 11, 2011  2.2% 5.7 $195,429 12.8% 7
Barker Ville  Freehold 2.2% 6.7 $450,000 15.5% 1
Eco 99 yrs from May 14, 2012 2.1% 6.6 $418,000 13.7% 5
D’Manor 99 yrs from 14/03/1997 2.1% 5.0 $172,833 9.9% 6
JC Ville Freehold 2.1% 7.0 $317,500 15.4% 2
Atelier Villas  Freehold 2.0% 5.6 $293,633 15.1% 6
Charlton Villas Freehold 2.0% 3.4 $150,000 6.8% 1
Thomson Impressions  99 yrs from Jan 12, 2015  1.9% 2.9 $175,000 7.1% 2
Charlton 18 Freehold 1.9% 4.2 $234,875 8.2% 4
Ventura Heights  Freehold 1.9% 5.2 $51,667 4.2% 3
Sommerville Regency Freehold 1.8% 7.2 $269,444 12.9% 2
Lange 28 999 yrs from Dec 2, 1878 1.7% 4.0 $106,112 7.1% 1
Palacio  Freehold 1.6% 6.8 $185,211 6.4% 5
Belgravia Villas  Freehold 1.6% 5.6 $295,353 9.5% 27
Kew Residencia 99 yrs from Feb 3, 1994  1.5% 7.1 $182,333 12.3% 3
Platina Gardens Freehold 1.4% 6.5 $170,000 9.6% 1
Gilstead Brooks Freehold 1.4% 6.5 $289,000 9.6% 2
Terra Villas  Freehold 1.4% 5.4 $240,000 7.8% 1
Victory Ville  Freehold 1.4% 4.3 $150,000 6.0% 1
Urban Villas  Freehold 1.3% 3.4 $130,000 4.6% 1
Alana 103 yrs from Aug 12, 2013 1.3% 6.2 $99,625 6.1% 8
The Areca  99 yrs from Nov 8, 2000  1.3% 6.8 $244,444 15.8% 2
Kovan Regency  99 yrs from April 24, 2012 1.2% 9.8 $443,298 13.8% 2
Ria Townhouses Freehold 1.2% 3.3 $88,000 3.9% 1
Poets Villas  99 yrs from 01/04/2010 1.1% 5.4 $126,000 6.3% 3
Sommerville Residences Freehold 1.1% 8.7 $300,000 9.7% 1
The Chancery Residence  99 yrs from Jan 31, 2004  0.9% 8.0 $181,400 7.5% 5
Hong Kong Park 999 yrs from May 7, 1879 0.9% 4.6 $200,000 9.0% 2
Teresa 8 Freehold 0.8% 8.3 $200,000 6.9% 1
Chancery Hill Villas  Freehold 0.8% 4.5 $165,250 4.2% 4
8 @ Stratton  Freehold 0.7% 6.1 $59,000 2.3% 2
Archipelago  99 yrs from June 1, 2011  0.7% 8.0 $200,000 5.7% 1
Kaleido  Freehold 0.7% 4.1 $91,103 2.8% 1
Marine Garden  Freehold 0.6% 5.5 $60,000 3.3% 1
English Villas  Freehold 0.4% 8.5 $100,000 3.6% 1
Charlton 27 Freehold 0.4% 6.0 -$64,657 -1.3% 6
Centurion Residences  Freehold 0.4% 4.7 $48,008 1.9% 1
Grandioso 8 Freehold 0.2% 10.1 $90,000 2.4% 1
Seven Crescent Freehold 0.2% 6.0 $40,000 1.2% 3
Lynnsville 331 Freehold 0.2% 4.5 $6,667 0.6% 3
Dalla Vale  Freehold 0.1% 4.6 $207,500 12.1% 4
Palms @ Sixth Avenue Freehold 0.1% 7.7 $65,263 1.4% 7
Woodhaven  99 yrs from Feb 7, 2011  0.1% 7.5 $73,705 2.8% 2
One Chiltern  Freehold 0.1% 8.7 $19,988 0.6% 1
The Ford @ Holland Freehold 0.0% 8.0 $3,000 0.1% 1
Verdana Villas  Freehold 0.0% 6.9 -$90,556 -1.3% 2
Illoura  Freehold -0.1% 7.0 $125,000 2.2% 2
D’Leedon  99 yrs from April 8, 2010 -0.3% 5.4 -$1,377,680 -6.8% 2
Villas La Vue  Freehold -0.3% 9.3 -$100,000 -2.7% 1
Este Villa  Freehold -0.6% 3.8 -$12,500 -0.4% 2
Wilkinson 8 Freehold -0.6% 5.0 -$90,000 -3.2% 1
West Shore Residences  Freehold -0.7% 8.0 -$219,979 -5.9% 3
Seletar View  999 yrs from Jan 1, 1879 -0.7% 6.2 -$100,000 -4.3% 1
Euhabitat  99 yrs from Dec 6, 2010 -1.2% 5.9 -$644,700 -14.7% 2
The Whitley Residences  Freehold -1.3% 8.1 -$417,956 -8.0% 9
Eleven @ Holland 99 yrs from Dec 6, 2010  -1.8% 9.9 -$750,000 -16.7% 1
Hillsta  99 yrs from Oct 3, 2011 -2.7% 4.0 -$271,943 -8.1% 3
Lynwood Eight  Freehold -3.9% 4.8 -$700,000 -17.5% 1
Gambier Court  99 yrs from Feb 3, 1997  -4.0% 3.8 -$545,000 -14.3% 1
The Seawind  Freehold -4.0% 7.3 -$1,308,500 -25.6% 1

Next, let's look at the most and least expensive cluster housing projects to date, by price per square foot

These cluster housing projects were the most expensive:

Project Tenure Average of Unit Price ($ PSF)
Bishopgate Residences  Freehold $3,908
Ridgewood  999 yrs from July 6, 1885  $1,886
Namly Court Freehold $1,751
Fernhill Cottage  Freehold $1,735
Kent Ridge Hill Residences  99 yrs from Nov 10, 2018 $1,683
Greenwood Mews  103 yrs from Oct 3, 2011  $1,602
Botanic @ Cluny Park  Freehold $1,462
Affinity at Serangoon 99 yrs from May 18, 2018  $1,437
Riverfront Residences  99 yrs from May 31, 2018   $1,427
JC Ville Freehold $1,382

Unsurprisingly, freehold cluster homes make up the majority due to their premium pricing.

Bishopsgate Residences is a bit of a shocker with that price tag, but this is a Kajima project – this developer was also involved with Resorts World Sentosa and Marina Bay Financial Centre, hence the exorbitant price tag.

The 31-unit project is also close to the cluster of foreign embassies near the Grange Road area, so it may be targeted at the likes of ambassadors and dignitaries, or those who may rent to them.

These cluster housing projects were the cheapest:

Project Tenure Average of Unit Price ($ PSF)
Northshore Bungalows  Freehold $419
Sungrove  99 yrs from Dec 5, 1994 $431
Surin Villas  Freehold $560
The Woods  99 yrs from March 9, 2010 $567
The Hilloft  999 yrs from Oct 12, 1885 $580
Teresa Villas  Freehold $617
Kiara 10 Freehold $629
The Shaughnessy  99 yrs from March 19, 2001  $679
Aston Residences 946 yrs from Jan 1, 1938 $680
Lynwood Eight Freehold $682

 

Northshore Bungalows and Sungrove are probably eye-openers for the low price.

For Northshore, this is due to its location at Punggol Point back in 1995. This was long before any of the amenities at Punggol today existed.

Waterway Point was only finished 21 years after this condo was built, and it was about the same time before there was an LRT stop. So it was launched at very low prices given the poor accessibility and lack of amenities, but you could expect it to rise in the coming years.

For Sun Grove, you can check out this article for a bit more on this West Coast landed area. This is another example of an area that was undesirable in the '90s, as there was poor accessibility and amenities.

The area is heavily improved today, but it's still one of the most affordable places to buy a landed property.

There's no getting around the fact that, when it comes to cluster homes with their small unit counts, performance can be very unpredictable

As such, these projects are better suited for own-stay use. For resale gains, condos tend to be more predictable.

Cluster homes are angled at homeowners who like landed living, but cannot handle serious maintenance issues like roofing, repainting the facade, or building their own pool.

ALSO READ: Can old leasehold condos still be profitable? A case study of 355 leasehold condos

This article was first published in Stackedhomes.

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