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Condominiums, often referred to as condos, have become highly sought after in Singapore due to the scarcity of land. As a small island nation with a rapidly expanding population, finding suitable land for development is a challenge. As a result, strict land use regulations and a fiercely competitive real estate market have driven property prices up. This has made investing in real estate, particularly in condos, a profitable venture with the potential for capital appreciation. Condos are in high demand due to their limited availability in the bustling city-state of Singapore.
The unprofitable deal at Marina Bay Suites came as a surprise, as transactions in the Marina Bay area were mostly profitable last year. For instance, a 1,066 sq ft unit at The Montage was sold for $2.78 million ($2,609 psf) on June 9, resulting in a profit of $100,000. Further down at Marina One, a 732 sq ft unit was sold for $2.4 million ($3,286 psf) in October, resulting in a profit of $290,000.The most profitable resale transaction at Marina Bay Suites in the past year was the sale of a 1,625 sq ft unit on the 56th floor that fetched $4.25 million ($2,614 psf) back in May 2012. The most recent transaction at Marina Bay Suites is also its most unprofitable, with the seller incurring an annualised loss of 27% over 13 years.Between January 14 and 28, the most profitable resale transaction in Singapore took place at Palm Spring condominium, where a three-bedroom unit was sold for $4.4 million ($2,336 psf) on Jan 20. This marks a profit of $3.19 million (264%) for the seller, who purchased the unit for $1.21 million ($642 psf) in 2005, which translates to an annualised profit of 6.8% over nearly 20 years.Palm Spring has consistently seen an increase in property prices over the past 20 years, with the average transacted price in January 2021 at about $2,342 psf, almost doubling from $1,439 psf in 2015 and more than triple from $973 psf in 2005. Meanwhile, the most profitable transaction at Orchard Bel Air was the sale of a four-bedroom unit for $4.65 million ($1,440 psf) on Jan 15. The unit was bought for $1.65 million ($511 psf) in 2001, resulting in a profit of $3 million (182%) and an annualised profit of 4.5% over 24 years.The unprofitable transaction at Marina Bay Suites on Jan 24 saw a loss of $1.15 million (27%) for the seller, who sold a 1,625 sq ft unit for $3.1 million ($1,907 psf) after purchasing it for $4.25 million ($2,614 psf) in 2012. This marks 14 consecutive loss-making deals at the condo in the past nine months, with losses ranging from $40,000 to $2.5 million. The average selling price at Marina Bay Suites has also declined from $2,502 psf in 2015 to $1,921 psf in January 2021. Other nearby condos such as The Sail @ Marina Bay, Marina Bay Residences, Marina One, and V on Shenton command higher resale prices.