Thomson Three Review – An updated unbiased analysis for resale buyer

Who is this article for ?

There are many different types of property buyer out there and each adopt a very different set of criteria when reviewing their property.

At one end of the spectrum, there are buyers who see their property solely as a place for their family to live in and tend to purchase on emotion, i.e when their wives like the property or when their child loves the playground.

On the other end of the spectrum, there are Stayvestors. These are buyers who see their property as an investment asset that can save them from the grind of the mindless 9 to 5 rat race.

If you fall into the latter group of buyers, this article is crafted specially for you. In this article, there will be no or little mention of swimming pool size and how much you or your kid will enjoy the facilities. We will specifically focus on the money making potential of the property.

Property in focus

2022 and 2023 sees several new launches being launched in the area surrounding MRT stations around the Thomson East Cost Line.

AMO Residences was the first to get things going, setting a new record high $2100 psf selling price for OCR condos. It sold 98% of its unit on the day of its launch and is situated near Mayflower MRT.

Lentor Modern and Lentor Hills stole the spotlight in 2023, with Lentor Modern selling 84% of its unit on launch day. This brought a fresh supply of new condo developments to the Lentor MRT.

One MRT stop away from Lentor MRT is the Bright Hill MRT, it is year marked to be the interchange between the Thomson East Coast Line and the up and coming Cross Island Line.

In this article we look to review the existing resale condo developments in the area and check out if there are any buying opportunities. We will specifically be focusing on Thomson Three as the subject of our review.

Key draw for the Bright Hill MRT / Sin Ming area

The Sin Ming area is an area that attracts families purchasing property for their own stay.

The presence of two highly sought after primary school, namely Ai Tong School and CHIJ St Nicholas Girls School serves as primary motivators for parents to vye for a property within 1km radius of these schools.

General information – Thomson Three

Here’s a quick overview of the general information regarding Thomson Three.

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List of comparable developments

Setting the context for the review, here are the noteworthy comparable developments that will be used as comparison with Thomson Three.

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Did the existing owners of Thomson Three make money ?

Now let’s look into the profitability of Thomson Three in comparison to its peers.

Profitability Comparison with Comparable Development

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As a caveat. Our original intent was to exclude all transactions including buyers that purchase during the new launch phase, to truly measure the profit enjoyed by resale buyers.

But due to the long average holding period of greater than 5 years, there were very little resale buyer to resale buyer transactions for the first three developments. Hence we included transactions of new launch buyers into consideration.

Decent performance but over a long 7 year holding period

Thomson Three achieved a decent performance, with an average 20% price appreciation and an average profit of $251,720.

It surpassed the newer Thomson Impression that achieved its TOP status in 2018, which saw a 17% price increase and an average profit of $201,295.

Thomson Grand performed poorly, which only sees a 9% price appreciation with an average profit of $146,148. With this amount of profit made, you will barely break even after netting off buyer stamp duties and interest incurred.

The key to note is that this level of profits is derived over an average of 5 to 9 years. If you are an investor, time is equal to opportunity cost.

Using the same period of 5 to 9 years, you can potentially make 2 properly flips, each with a average of $250,000 profit,

Supporting the thesis that most buyers for properties around the Bright Hill MRT area, are families looking to purchase bigger 3 bedder units for their own stay.

From the table below you can see that the 3 Bedder unit performed much better with a 23% price appreciation versus the respective 13% and 19% price appreciation achieved by the 1 bedder and 2 bedder units.

Thomson Three – Profitability – Breakdown by Bedroom Type

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Will you make money if you purchase a unit in Thomson Three today ?

To properly answer this question, we will review Thomson Three using the following set of criterias.

• Development’s age – considering the risk of price plateauing due to lease decay
• Size of development – directly impacting transaction volume
• Pricing – price competitiveness of development vs comparable properties
• Quantum – the overall price to be paid for a specific unit, affecting affordability
• Supply – the no of comparable competing properties in the vicinity
• Exit audience – the size prospective exit buyers
• URA Master Plan – future plan or competing properties for the area
• Proximity to MRT – affects rentability and buyer’s demand
• Proximity to Reputable School – major factor valued by families
• Proximity to amenities
• Rental demand
• Density of development – consider no. of units sharing common space and facilities
• Quality of facilities
• Unit Layout – reviewing for efficiency in layout

To keep the article short, we will only elaborate on noteworthy factors in the section that follows.

Summary – SWOT Analysis – Thomson Three

For the time pressed readers, here’s a summary of the outcome of the review for Thomson Three.

Strength

• Price – Decent price gaps versus new launch condo recently launched in the area
• Affordability – Thomson three has the most affordable price quantum amongst the younger, below 10 year old developments in the region
• Proximity to Reputable School – 1km from Ai Tong School

Weakness

• Distance from MRT – Thomson Three is not the nearest to MRT, it is situated 713 m away from MRT, losing out to its counterpart
• Supply – There is a abundance of developments at different age and price point for buyers consideration
• Average Rental Demand – The rental volume and yield for the development is sub optimal, falling below the sub 3 percent range

Opportunity

• Surrounding New Launch facilitating price appreciation – The surrounding new launch AMO residences and Lentor Modern could serve as a catalyst to help price appreciate

Threat

• Increasing Supply of newer condo in the surrounding area – Aside from new launches in Lentor area, there are more new launch development coming up

Elaboration on note worthy review criterias

Now that we have established the summary for the Thomson Three review, let’s dive deeper into each review criteria.

Price gap between comparable developments

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Using the latest new launch AMO residences as a upper bound benchmark for price comparison. Thomson Three being 9 years older than AMO residences shows a decent price gap of $452 psf.

To allow for a better apple to apple comparison, we rebased all properties lease back to 99 years. We did this by dividing existing average S$ psf with remaining lease life and multiplying it by 99 years.

Referencing the column Avg price vs AMO Residence after rebasing, you can see that the 3 younger developments Thomson Three, Thomson Impression, Thomson Grand all showed a healthy price gap of between $288 psf to $511 psf.

Note that Thomson Grand is an abnormally its significantly lower psf is offset by the significantly larger unit for each bedroom type.

We will revisit this in later section which we will touch on quantum and affordability

Price gap between neighbouring new launch developments

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Extending the comparison further into neighbouring new launches that launched one MRT stop away, around Lentor MRT.

The decent price gap of between $251 to $288 psf remains after rebasing all development lease back to 99 years.

Affordability – Quantum comparison with comparable development

Aside from pricing per square fit, the overall quantum that is required to purchase a unit in a development significantly affects buyer’s affordability.

And the unit size of each bedroom type plays a role in influencing the overall purchase quantum.

One of the propositions that newer condo possesses in a more efficient layout, leading to a smaller square footage. Hence, factoring a higher price per sqft, over a smaller unit size, it may still result in a smaller or similar price quantum.

We shall see if this holds true in the comparison table below.

Quantum Comparison 3 Bedder

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Quantum Comparison 2 Bedder

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Referencing the table above

Quantum is a key proposition for units in Thomson Three. A family would only need $1.8 million to afford a sizable 1033 sqft 3 bedder unit in Thomson Three. Whereas Thomson Three despite lower price per sqft, its larger 3 bedder unit of 1346 sqft resulted in a high overall quantum of $2.1 million as an entry price.

Comparing it with the recent launches in the area, you still see a decent $219,143 quantum gap between Thomson Three and AMO residences.

Proximity to reputable school

Thomson Three is situated within 1km radius from highly sought after Ai Tong School and fulfils one of the criteria that attracts families looking for a unit in the area.

As a sidenote, we have written extensively about finding investment properties around reputable schools. Check out the following article to learn more

• Condo near rosyth primary
• Condo 1km from Nan Chiau primary school
• Condos within 1km of catholic high

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Floor plan

Thomson Three features an efficient regular shaped floor plan with no wastage of square footage on bay window and bomb shelter. The only drawback is the significant use of space in the elongated balcony that extends from the living room to the master bedroom.

Unlike Thomson Grand, which has a key drawback in its layout that features significant space being invested into a private lift lobby.

Proximity to MRT

One of the weaknesses for Thomson Three is its distance from Bright Hill MRT. Referencing the table below, you can see that Thomson Three is the furthest away from the MRT when compared to its peers.

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Rental demand

As we have mentioned earlier, the Bright Hill MRT area is typically sought after by families. It is not a natural location for tenants to be located.

This is reflective in the rental yield of the units in the area. Aside from Thomson Impression that is situated nearer to the MRT, all the developments in this area have a rental yield below the 3% average.

Rental Demand and Rental Yield Comparison with Comparable Development

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Supply – Current and future

The supply situation is not exactly in Thomson Three favour. A buyer looking to purchase a unit in the area has ample options to consider.

Aside from the recent surge of new launch supply in the neighbouring Lentor and Mayflower MRT area. There are two new plots of land awaiting tender and pending development of new condo developments

Final Words

The Bright Hill MRT area remains a choiced location for a family residence. But from an investment standpoint, the odds are not in Thomson Three favour.

For more insights on undervalued resale properties with potential for price appreciate check out the following article

More Reads Regarding Resale Condo Research

• Clavon Condo Review
• Stirling Residences Review
• JadeScape Condo Review
• Best Resale Condo Singapore