A closer look at profitability

HOME prices are starting to come off their highs. That makes the profit picture look a little less pretty for residential sellers. An analysis of resale deals by Cushman & Wakefield for BT shows that while overall profits from non-landed sales rose from the first quarter into the second, on average, gains are narrowing and losses are on the rise. 

Still, loss-making deals accounted for just 2.8 per cent of resale transactions in Q2. Such resilience could be put down to firm demand and sellers’ holding strength, allowing owners to hold out rather than exit at a loss. Of the five most profitable sales by percentage gain, four were executive condominium (EC) transactions which racked up gains of around 90 per cent, Ry-Anne Lim reports. 

Notably, the five biggest losses were from prime property sales, which lost between S$300,000 (16 per cent) and S$1.83 million (37 per cent) in value. Two-thirds of loss-making deals in Q2 were in prime areas.