When it comes to housing options for affluent homebuyers in Singapore, penthouses and landed homes are often the top two choices. Both property types provide ample living space, ideal for those seeking a comfortable and luxurious lifestyle. Moreover, these properties are seen as symbols of prestige and status, as they typically fall within the higher price range.
Depending on the location, development, and size of the penthouse, some units offer the added advantage of stunning views, creating what can be described as a ‘landed in the sky’ experience. Penthouses also provide an edge in privacy, being situated on the top floor with no neighbours above, which minimises noise disturbances. Many also feature private lifts, allowing direct access to the unit and adding a layer of exclusivity and convenience compared to shared lifts.
However, as with any property purchase, the financial aspect is crucial. With a higher entry price compared to typical condominium units, are penthouses truly worth the premium? Will investing in one provide a desirable Return on Investment (ROI)? In this article, we’ll explore the benefits and drawbacks of penthouse living, examine profitable and unprofitable transactions, and discuss key factors to consider when selecting a penthouse.
Evolution Of Penthouses
Before diving into the perks and drawbacks of penthouse living, let’s first define what a penthouse is. Historically, the term ‘penthouse’ referred to a small structure, often a shed, built on a building’s roof, primarily used for storage or as a makeshift housing for building staff. It wasn’t until the 1920s that penthouses evolved into the luxurious living spaces we recognise today.
Nowadays, a penthouse refers to an apartment or condominium unit occupying the top floor of a development. Over time, various types of penthouses have emerged, each offering unique living experiences to suit different lifestyle preferences. For more information on the different types of penthouses available in Singapore, click here to learn more.
The Advantages and Disadvantages of Penthouse Living
Advantages
One of the most significant advantages of penthouse living is the unparalleled sense of space and privacy. As the highest unit in a development, penthouses often offer expansive layouts, catering to affluent homeowners who prioritise both functionality and aesthetics. The lack of neighbours above reduces noise disturbances, ensuring a peaceful living environment that cannot always be guaranteed in lower-level units. Additionally, penthouses frequently come with exclusive features such as private lifts, rooftop terraces, and personal outdoor spaces, further enhancing the allure of an elevated lifestyle.
Location, too, plays a pivotal role in the appeal of penthouses. Being situated on the top floor often means commanding breathtaking panoramic views, though this is highly contingent on the development’s location. For homeowners with an affinity for views of the skyline, sea, or greenery, penthouses can offer vistas that are rarely matched by other property types. This connection to the external environment not only elevates the living experience but also provides a unique visual tranquillity that can transform daily life.
From a symbolic perspective, penthouses carry an undeniable air of exclusivity and status. Owning a penthouse is often seen as a reflection of success and prestige, an asset that sets one apart in the realm of luxury real estate. This psychological dimension, while intangible, plays a critical role in the continued demand for such properties among the affluent.
Disadvantages
However, despite the obvious allure, penthouse living is not without its challenges. First and foremost is the premium price tag. Penthouses typically come with significantly higher entry costs compared to other units within the same development. The exclusivity and additional features, while attractive, demand a financial commitment that may not align with every buyer’s investment strategy. In a market where property values can fluctuate, buyers must also weigh whether the additional cost of a penthouse will translate into a proportional return on investment.
Another consideration is maintenance. Larger spaces and private outdoor areas, such as terraces or rooftops, often require more upkeep. Elements such as extreme weather exposure can accelerate wear and tear on these spaces, leading to higher maintenance costs over time. Additionally, penthouse owners often face higher Management Corporation Strata Title (MCST) fees, as these fees are typically proportionate to the unit’s size and exclusive features, adding to the long-term financial commitment.
While the views from a penthouse are a key selling point, not all penthouses benefit from this advantage. In certain developments, especially those in dense areas, the views may be obstructed by nearby buildings, diminishing one of the key benefits that typically justify the higher price.
Furthermore, while penthouses offer a heightened sense of privacy, they are not immune to the limitations of communal living. Issues such as building management or shared facilities can still affect the overall living experience. The exclusivity of a penthouse does not negate the dependence on communal infrastructure, such as elevators or security systems, which may not always meet the expectations of luxury living.
Lastly, resale potential must be carefully considered. The niche appeal of penthouses can be a double-edged sword. While they can potentially attract a select group of high-net-worth individuals, the buyer pool is inherently smaller, which could slow down the sales process in a future market where preferences may shift.
ROI Potential Of Penthouses
While penthouses are relatively scarce, they are not as inelastic an asset as pure landed homes. The limited supply of pure landed homes, coupled with consistently strong demand from discerning buyers, often results in significant capital appreciation and strong potential for ROI in the long-term. Penthouses, on the other hand, remain more susceptible to both micro and macroeconomic factors that influence the broader market for non-landed private residences, making their capital appreciation potential more variable.
Recent transactions highlight the complexities of penthouse investments, whether freehold or leasehold.
For example, the sale of a penthouse at Veranda, a freehold boutique development, resulted in a $1.67 million profit after a holding period of 16 years, while a duplex penthouse at Spring @ Katong yielded a $2.06 million gain in January 2024 after 19 years. These transactions demonstrate that penthouses can generate strong returns, but this is not guaranteed across the board. Factors such as the practicality of the penthouse layout, the entry price, and the overall size of the unit are critical in determining whether discerning buyers are willing to pay a premium.
Penthouses often come with higher price tags due to their exclusivity, but if the asking price outweighs what buyers perceive as practical for the space and layout, they may hesitate—potentially leading to slower sales or even financial losses.
This was evident in the case of Robinson Suites, a freehold development where a two-bedroom penthouse sold at a loss of nearly $1 million in January 2024, despite the property’s freehold status. This shows that being freehold alone does not ensure capital appreciation, especially if the unit fails to meet buyers’ expectations in terms of design, practicality, or size.
Leasehold properties show similar variability. For instance, at Queens, a 99-year leasehold development, a penthouse sold between 30 April and May 2024, for a profit of $1.59 million. However, during the same period, a unit at Marina Bay Residences, another leasehold property, incurred a $70,000 loss. These cases emphasise that beyond location and market conditions, key factors like the penthouse’s layout, price point, and practicality remain essential in determining whether buyers will see value in paying a premium for such units. In the end, the worth of a penthouse isn’t just about exclusivity—it’s about whether the unit’s features justify its asking price in the eyes of potential buyers.
Key Considerations When Looking for the Optimal Penthouse
Discerning buyers seeking the perfect penthouse should carefully weigh both lifestyle preferences and investment potential. Here are the key factors to consider:
Layout and Design
The practicality of the layout should align with your and your family’s lifestyle needs. A functional design with well-planned spaces for daily activities and entertainment, as well as adequate storage, is essential. The layout should enhance both comfort and convenience, ensuring it fits your lifestyle now and in the future.
Entry Price and Investment Potential
Ensure the asking price is justified by the unit’s size, features, and practicality. Penthouses command a premium, but buyers must assess whether the premium aligns with the value offered. Consider market trends and the property’s appreciation potential, factoring in your investment horizon.
Maintenance and Fees
Penthouses often come with higher MCST fees due to their size and exclusive amenities. It’s crucial to review these costs and assess whether the property is well-maintained, as poor management could lead to increased expenses and diminish the property’s long-term value.
Leasehold vs Freehold
While freehold properties generally hold better long-term value, leasehold penthouses can still offer good returns if the remaining lease is sufficient. Be mindful that shorter leaseholds may depreciate faster as the lease runs down.
Location and View
Beyond the prestige of the address, buyers should consider proximity to essential amenities like schools, transport hubs, and recreational areas. Evaluate the surrounding area through the URA Master Plan to anticipate future developments that could impact views, accessibility, and overall desirability.
Our Penthouse Listings
Here are just a few of the penthouse listings we currently have, specifically designed for multi-generational living. For those interested in exploring additional options not featured here, please visit our listings page, where you can easily filter to find the ideal penthouse that meets your needs.
Citylife @ Tampines
Luxurious penthouse living awaits at Citylife @ Tampines, District 18. This rare 4,349 sqft duplex features 5 bedrooms, 4 baths, and over $150,000 in renovations. The expansive rooftop terrace offers the perfect space for a home gym or entertainment area. Located just minutes from Tampines MRT (East-West & Downtown Line) and top amenities like Tampines Mall, this penthouse provides unparalleled space, outclassing typical landed homes. With full condo facilities, including a lap pool, tennis court, and fitness station, this is a one-of-a-kind opportunity.
One Duchess
This 1,421 sqft penthouse at One Duchess offers 4 bedrooms, 3 bathrooms, and $300K in renovations, including loft beds in the common rooms. Located within 1KM of top schools like Raffles Girls’ Primary and Nanyang Primary, and just 3 minutes from Tan Kah Kee MRT, this home provides unblocked views of the Bukit Timah stretch from the living room balcony. Set in a tranquil neighbourhood, with the potential for a dual-key concept, this property is ideal for families or investors looking for a unique opportunity in a prime location.
The Metropolitan
Experience luxury living in this stunning 4-bedroom, 3-bath penthouse at Metropolitan in District 3. Perched on the top floor, this spacious unit boasts panoramic views and is less than 5 minutes from Redhill MRT, making commuting a breeze. With $580K worth of renovations completed in 2017, the home features premium fittings and is move-in ready. Enjoy the convenience of being close to amenities, shopping malls, and top schools like Gan Eng Seng and Alexandra Primary within a 1km radius. Embrace privacy and sophistication in a vibrant community with only 11 exclusive 4-bedroom penthouses available.
1953
Step into luxury with this beautifully renovated 1,227 sqft freehold duplex penthouse in prime District 8. Featuring 3 spacious bedrooms, a family area, and 2 bathrooms, this well-ventilated unit is bathed in natural light and offers dual-key conversion potential, making it perfect for multi-generational living. Enjoy a fully covered roof terrace for relaxing or entertaining, while being just minutes away from Farrer Park MRT and City Square Mall. With only 58 exclusive residential units and convenient access to Boon Keng and Bendemeer MRT stations, this property provides an ideal blend of exclusivity and accessibility, alongside top schools like Hong Wen, Bendemeer Primary, and Farrer Park Primary within a 1km radius.
In Conclusion
Penthouses offer an appealing lifestyle choice for discerning homebuyers in Singapore, combining luxury, space, and exclusivity. However, prospective homeowners must weigh the benefits against the potential drawbacks, including higher entry prices and ongoing costs. Understanding the nuances of penthouse living, such as layout practicality and market conditions, is essential for making an informed investment. Ultimately, whether a penthouse is worth the hype will depend on individual preferences and financial goals, making careful consideration vital in the decision-making process.
If you’re exploring the possibility of penthouse living or have questions about specific listings, feel free to get in touch. Our expert consultants are ready to guide you through every step, ensuring you enjoy a smooth and fulfilling retirement.
