Developers of very luxury condominiums could probably earn a very high profit on their developments. This is actually the market of the sellers not the buyers.
Dr.Sopon conducted a simple calculation to test the hypothesis of the market as follows:
The following are the figures for the analysis:
According to the assumption above, a preliminary calculation can be conducted as follows:
That there appears a large amount of gross profits or soft costs of 39.4%, implies that on one hand, condominium prices are set very high. The net profit should be over 20%. If one would like to buy a unit for rent to quest for return on investment, the return should be quite low due to the high margin. On the other, the return of investment (capital gain) might be small as well.