Is it a Good Deal?: Studio CCR condo sold for $85,000 loss

V on Shenton has had two unprofitable transactions this year. (Picture: UIC)

Singapore (EDGEPROP) – Last month, a studio unit in V on Shenton sold for $2,002 psf, resulting in a loss of approximately $85,000 for the seller. The 474-sq ft unit was purchased in September 2012 for $2,181 psf.

At the time of writing, this transaction was the second unprofitable sale for V on Shenton this year. The earlier unprofitable transaction was for a three-bedroom unit (1,755 sq ft) that sold for $1,932 psf in February, resulting in a loss of approximately $231,660. On the flip side, a two-bedroom unit (1,033 sq ft) that was sold earlier this month fetched a lower $1,868 psf but still earned a profit of approximately $136,000. This difference could be because the three-bedroom unit was purchased at a significantly higher price ($2,064 psf) compared to the two-bedroom unit ($1,736 psf).

We utilized our analytics tool, 'Is it a Good Deal?', to examine whether the unprofitable transaction for the studio unit constituted a good deal for the buyer.

V on Shenton is a leasehold condo in District 1

V on Shenton is located along Shenton Way in the heart of the CBD. This 99-year leasehold condo features 510 units and obtained its temporary occupation permit (TOP) in 2017. Located in District 1, the condo is just a short walk away from Shenton Way and Tanjong Pagar MRT Stations. Other nearby amenities include Lau Pa Sat, Amoy Street Food Centre, and Sofitel Singapore City Centre.

Indicators point to a potential ‘Good Deal’ for the buyer

According to our 'Is it a Good Deal?' analytics tool, it would seem that the buyer has secured a good deal. The transacted price of $2,002 psf is 4.2% below the average price for the development and 3.4% below the average price for District 1. The long remaining tenure, along with proximity to seven existing and one upcoming MRT stations, sweetens the deal for the buyer.

The main drawback would be the lack of a nearby primary school. However, considering the transaction is for a studio unit, families with children are unlikely to occupy the unit.

Weak price growth for V on Shenton and District 1

At $2,002 psf, the sale price is below the average of $2,071 psf for similar-sized condo units in District 1, based on sales transactions for 1Q2024. Similarly, the transacted price is below the average price of $2,088 psf for V on Shenton based on sale transactions in the development over the last 12 months.

However, the average price for V on Shenton has declined to $1,967 psf based solely on sales transactions for 1Q2024. From 3Q2019 to 1Q2024, the average price for V on Shenton fell by 18.9%, whereas the average price for condos in District 1 rose by 21.6%.

Cheaper than majority of comparable neighbours

There are nine condos located within walking distance of V on Shenton. Except for the freehold Robinson Suites, the other eight condos are 99-year leasehold developments. Additionally, Wallich Residence, Marina One Residences, and Eon Shenton obtained their TOP in the same year as V on Shenton.

V on Shenton ($2,088 psf) has a lower average price than Wallich Residence ($3,185 psf) and Marina One Residences ($2,207 psf), but a slightly higher average price than Eon Shenton ($2,053 psf). The average prices are based on sales transactions for the respective developments in the past 12 months.

Wallich Residence and Marina One Residences are part of massive mixed developments that offer residents convenient amenities. Furthermore, Wallich Residence is adjacent to Tanjong Pagar MRT Station, while Marina One Residences is a short walk from Marina Bay MRT Station.

On the other hand, Eon Shenton is located farther from Tanjong Pagar MRT Station. Although Prince Edward Road MRT Station is near Eon Shenton, it is expected to become operational only in 2026. Eon Shenton is also part of a mixed development but on a smaller scale compared to Wallich Residence and Marina One Residences.

A closer examination of V on Shenton, Marina One Residences, and Eon Shenton indicates that their average resale prices have been declining. From 2019 to this year, the average prices for V on Shenton and Marina One Residences fell by 17.2% and 7.3%, respectively. From 2021 to this year, the average price for Eon Shenton decreased by 21%. There were no resale transactions for Eon Shenton until 2021.

The price decline for the three condos is not surprising because price growth for leasehold condos in District 1 is significantly weaker than their counterparts islandwide. From 2019 to this year, the average resale price for leasehold condos in District 1 increased by only 5.3% to $1,985 psf. In contrast, the average resale price for leasehold condos surged by 32.5% to $1,646 psf.

Is it really a Good Deal?

On the surface, it would seem that the buyer has secured a good deal because the transacted price is lower than the average price of the development (based on transactions for the past 12 months) and the current average price for the district. Furthermore, V on Shenton is well-located in the heart of the CBD and a short walk away from numerous amenities, including two MRT stations.

However, the average price for leasehold condos in District 1 is growing at a significantly slower pace compared to their counterparts islandwide. Moreover, the average prices for V on Shenton and its neighbouring leasehold condos have been declining in recent years. Hence, the buyer may not have secured a good deal if they had bought the property for potential capital gains.

To learn more about this transaction, and whether it is a good deal, click here.

Check out the latest listings for V On Shenton, Wallich Residence, Eon Shenton, Marina One Residences properties