As the world celebrated the year-end festive season, a three-bedroom unit at Seascape in Sentosa Cove changed hands at a loss of $1.47 million on Dec 27. It joined the recent spate of unprofitable transactions on the paradise island.
The seller of the Seascape unit purchased the property from the developer at $2,631 psf in 2010 and resold it at $1,955 psf. The loss worked out to 26%, or 4% per annum over almost seven years.
The latest loss, however, paled in comparison to a preceding transaction in the development. Last October, a four-bedroom penthouse in Seascape was sold at an eye-watering loss of $4.65 million. The unit was bought in the secondary market at $2,594 psf in 2011 and resold at just $1,497 psf, 42% below the purchase price. Seascape is an eight-storey seafront project comprising only 151 units. The 99-year leasehold development was completed in 2011.
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Around 70%, or 15 out of 21, of resale transactions at Sentosa Cove in 2016 were in the red. The average loss was $1.35 million.
Of the six profitable transactions last year, three were for The Azure. All three units were purchased in 2005 and 2006, at prices averaging $1,157 psf. They were resold in 2016 at an average price of $1,421 psf, or between $2.3 and $4.6 million each.
The second-highest loss in the week of Dec 27 to Jan 3 amounted to $817,000. It accrued to a 1,604 sq ft unit at One Shenton. The seller purchased the unit at $2,069 psf in 2007 and resold it at $1,560 psf on Dec 28. The loss worked out to 25% or 3% per annum over more than nine years.
A total of six of seven resale transactions at One Shenton were unprofitable in 2016, with losses ranging from $53,722 to $1.68 million. The sale price for the loss-making transactions averaged $1,680 psf. The sole profitable transaction was traced to a shoebox unit that was bought at $2,030 psf in 2010 and resold at $2,058 psf, resulting in a modest gain of $16,000 for the seller. One Shenton is a 99-year leasehold project in District 1 that was completed in 2011.
The highest profit in the week of Dec 27 to Jan 3 accrued to a 1,550 sq ft unit at Rivergate, a 545-unit freehold apartment at Robertson Quay, fronting the Singapore River. The property was bought in 2008 at $1,100 psf and resold at $1,935 psf on Dec 28. This resulted in a profit of $1.3 million, or 76%.
This article appeared in The Edge Property Pullout, Issue 762 (Jan 16, 2017) of The Edge Singapore.