CLASH of TITANS 1- Seaside Residences (New Launch) vs Mandarin Gardens (Resale)
What are buyers thinking when they decide to buy a unit at Mandarin Gardens ? Are they thinking that it would yield better results due to its lower price. But at the end of the day, their property investment theory was proven wrong.
At the end of the day or rather after 2 years, Seaside Residences was a clear winner in terms of PSF (Per Square Foot) appreciation as it yielded a better ROI or Return On Investments. From the chart, it appears that the psf of Mandarin Gardens which is an older condo with Enbloc potential has fallen out of favour whereas the Seaside Residences which is a New Launch Condo has not only maintained pricing but has also increased in its value.
From this chart, you can see that the average PSF in the Pine Grove Region is from $1,000 to $1,350 psf which is relatively "cheap" compared to the overall property market. To put things in perspective, the psf for an Executive Condominium (EC) in Yishun is around $1,350. The question an investor has to consider is " Does the cheap pricing translate to better ROI outcomes?"
One of the reasons for the higher PSF could be attributed to the smaller unit sizes and as a result, the overall quantum of the units are relatively cheaper compared to the units at Mandarin Gardens. Hence, it all comes back to the question of affordability. If the potential buyer feel that they have bought an affordable unit, they will bite the bullet and go for it.
With hindsight, if you look at the psf of Seaside Residence in July 2020, it is in the relatively high range of $1,700 to $2,000 psf , you would think the potential buyers of this new launch were "crazy" and probably "laughed" at them for their "poor" judgement call for this investment. You may be one of those who laughed at them and gone ahead to purchase Mandarin Gardens as it was cheaper. Fast forward 2 years to 2022, the ones who are laughing to the Bank were the buyers of Seaside Residences especially thos who purchased in the in 2020 era.
Assuming you had purchased Mandarin Gardens unit at $1,000 psf in 2020, the price today is around $1,000 to $1,100. This translates to a $100 increase in psf. Whereas if you had purchased a Seaside Residences unit at an average of $2,000 psf and in today's price, it would be an average of $2,200 psf. This would essentially translate to a paper profit of $200 psf.
For illustration purposes, we take the unit size to be around 500 sqft and the nett gain of $200 psf. In theory, you would make a paper profit of 500 sqft X $200 psf = $100,000.
