Are “premium” stacks with good views really valued better?
Developers are pretty open about which stacks are “premium” – ask on a fresh start and the sales team will likely tell you directly. This comes with the usual justifications like better vision or better orientation. For owner-investors, however, the question often arises whether the premium is worth it. Many buyers paid more for a beautiful view just to make the same profits as any other owner. In this article we examined some specific cases:
How we assess the value of “premium” stacks
For the following condominiums, we first determined the developer prices at the time of market launch. The following tables show which stacks had premium prices. Note that we have excluded the top and bottom floors from the average to avoid distortion from penthouse units or ground floor units with private enclosed spaces (PES).
After that, today we followed the current prices to see if the premium stacks actually rose better.
For example, consider Foresque below. We can see that stacks 3, 5, 13, 14 and 15 were higher at the time of publication. This corresponds to some of the features of these stacks: there is no obstruction from stacks 5, 14 and 15; and these offer a pool view.
Note that this is not accurate as the developers’ reasons for pricing some stacks higher are not always clear (it can sometimes just be due to demand; prices can even go up or down if buyers want or want to seem to avoid: a given stack).
Premium stacks don’t always lead to better wins
In fact, some examples show that they could be detrimental to profits.
For example, in the case of Foresque Residences, stacks with an unobstructed view of the pool saw an average loss of 5.75 percent, while those with an unobstructed view of the tennis court area saw the worst average loss (minus 9.7 percent). .
Note that among the premium stacks in the Foresque Residences, an unblocked pool view also does worse than a partially blocked pool view. The latter at least managed to break even with a plus of a tiny 0.02 percent.
Conversely, stacks without a premium price – and compared to an opposite condominium – recorded average growth of around 4.4 percent.
This is repeated once more in Flo Residence.
At least premium stacks showed no losses here. However, they all made worse profits than their non-premium counterparts; even those with significantly worse prospects.
The best prospects – the river-side premium stacks – only recorded average growth of around 6.2 percent. Conversely, stacks saw the highest average gain of around 14 percent versus nearby HDB blocks, which fetched lower starting prices.
Don’t underestimate the difference between premium and regular prices at the time of launch.
