New Reporter
13-07-23, 12:27
First owners of executive condominiums make average gains of S$322,220 when selling: Huttons Asia
Jul 11, 2023
GROSS profits for selling executive condominiums (ECs) appear to favour first owners, as they stand to make an average profit of S$322,220, according to Huttons Asia.
In a report published on Tuesday (Jul 11), the property agency noted that first purchasers of an EC unit make larger profit gains compared to second owners, who stand to gain S$261,948 on average.
Upon reaching the minimum occupation period (MOP) of five years, first owners are able to achieve average gross gains of more than S$300,000 “consistently every year”, said Huttons Asia.
The windfall increases for first owners who are willing to wait. Average gross gains are more than S$500,000 when the project is approaching the 10-year mark.
Huttons Asia found that second owners had to wait for at least four years to see an average gross profit of nearly S$300,000.
The report analysed 5,033 related EC transactions for projects launched from 2010.
Huttons Asia found that first owners made lower average gross gains from selling their EC units before fulfilling the MOP. With longer holding periods, first owners tend to make higher average gross profits.
It was observed that the average gross profits appeared to be highest once the EC is 10 years and older. This could be due to a wider pool of buyers as foreigners are now eligible to buy, said Huttons Asia.
In terms of timeframe, Huttons Asia said that first owners tend to sell within one year of fulfilling the MOP – since the EC unit is still relatively new – with average gross gains of S$317,731.
This amount goes up to S$327,982 for first owners who cash out from their EC units between one year and less than two years after fulfilling the MOP. The study also found that transaction volume tends to taper off after the first year post-MOP.
Buyers of resale EC units tend to make smaller average gross gains from their property transactions compared to first owners, the study found.
Out of the 79 transactions where the EC unit was resold in the secondary market, the study noted that second owners made average gross profits of S$245,303 after holding the unit for three to four years.
Huttons Asia said that for those considering between a new and resale EC unit, the evidence points to new EC units as a superior option.
Looking ahead, Huttons Asia said the measured supply of new EC units ensures that EC prices are well-supported. It noted the average prices of resale EC units rose 102.2 per cent from 2008, while average prices of new EC units climbed 88.5 per cent over the same period.
https://www.businesstimes.com.sg/property/first-owners-executive-condominiums-make-average-gains-s322220-when-selling-huttons-asia
Jul 11, 2023
GROSS profits for selling executive condominiums (ECs) appear to favour first owners, as they stand to make an average profit of S$322,220, according to Huttons Asia.
In a report published on Tuesday (Jul 11), the property agency noted that first purchasers of an EC unit make larger profit gains compared to second owners, who stand to gain S$261,948 on average.
Upon reaching the minimum occupation period (MOP) of five years, first owners are able to achieve average gross gains of more than S$300,000 “consistently every year”, said Huttons Asia.
The windfall increases for first owners who are willing to wait. Average gross gains are more than S$500,000 when the project is approaching the 10-year mark.
Huttons Asia found that second owners had to wait for at least four years to see an average gross profit of nearly S$300,000.
The report analysed 5,033 related EC transactions for projects launched from 2010.
Huttons Asia found that first owners made lower average gross gains from selling their EC units before fulfilling the MOP. With longer holding periods, first owners tend to make higher average gross profits.
It was observed that the average gross profits appeared to be highest once the EC is 10 years and older. This could be due to a wider pool of buyers as foreigners are now eligible to buy, said Huttons Asia.
In terms of timeframe, Huttons Asia said that first owners tend to sell within one year of fulfilling the MOP – since the EC unit is still relatively new – with average gross gains of S$317,731.
This amount goes up to S$327,982 for first owners who cash out from their EC units between one year and less than two years after fulfilling the MOP. The study also found that transaction volume tends to taper off after the first year post-MOP.
Buyers of resale EC units tend to make smaller average gross gains from their property transactions compared to first owners, the study found.
Out of the 79 transactions where the EC unit was resold in the secondary market, the study noted that second owners made average gross profits of S$245,303 after holding the unit for three to four years.
Huttons Asia said that for those considering between a new and resale EC unit, the evidence points to new EC units as a superior option.
Looking ahead, Huttons Asia said the measured supply of new EC units ensures that EC prices are well-supported. It noted the average prices of resale EC units rose 102.2 per cent from 2008, while average prices of new EC units climbed 88.5 per cent over the same period.
https://www.businesstimes.com.sg/property/first-owners-executive-condominiums-make-average-gains-s322220-when-selling-huttons-asia