The great price divide

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/ EdgeProp Singapore
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January 17, 2020 1:05 PM SGT

SINGAPORE (EDGEPROP) - The premium that new project launches are commanding has widened the price gap with older resale properties in their midst. Will the new highs being set by the latest offerings lead to a recovery in the resale market this year?

Last year, the average price of new non-landed homes sold in the CCR stood at $2,950 psf, which was 45% above the average transacted price for resale units which hovered around $2,037 psf, according to Edmund Tie Research (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Last year, the average price of new non-landed homes sold in the CCR stood at $2,950 psf, which was 45% above the average transacted price for resale units which hovered around $2,037 psf, according to Edmund Tie Research (Photo: Samuel Isaac Chua/EdgeProp Singapore)
New launches of prime condos in Districts 9 and 10, especially those developed on sites purchased during the collective sale fever of 2017 to 1H2018, have achieved new benchmark prices in their respective neighbourhoods. A consequence of that is a widening price gap between new and resale non-landed homes (primarily condominiums and apartments).
New non-landed homes in the Core Central Region (CCR), which encompasses the traditional prime Districts of 9, 10 and 11, as well as the CBD core and Sentosa Cove, have “all the trappings” in terms of facilities, services and views, says Alice Tan, senior director of research & consultancy at Edmund Tie. Hence, it is not surprising why buying interest is tilted in favour of new condominium projects relative to their older counterparts which have none of the bells and whistles.
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Price gap widens between new and resale

Last year, the average price of new non-landed homes sold in the CCR stood at $2,950 psf, which was 45% above the average transacted price for resale units which hovered around $2,037 psf, notes Tan. In 2018, the price gap between new and resale properties in the CCR was 31%, with new homes fetching an average of $2,560 psf, while resale properties averaged $1,950 psf.
The Avenir - An example of the kind of premium a new luxury project can command today can be seen at the 376-unit The Avenir (former Pacific Mansion) at River Valley Close.
At The Avenir, premium four-bedroom units achieved an average price of $3,560 psf, while typical units averaged $2,960 psf during the first weekend of sales (Photo: Hong Leong)
With up to 20 new projects in the CCR slated for launch in 1H2020, and buyers seeking “quality homes in desirable locations”, Tan reckons the premium between new and resale non-landed properties is likely to remain in the 40% to 45% range this year.
An example of the kind of premium a new luxury project can command today can be seen at the 376-unit The Avenir (former Pacific Mansion) at River Valley Close. On the first weekend of sales (on Jan 11-12), 20 units were sold. Of these, 13 were a mix of one- to three-bedders that fetched an average of $2,960 psf. The remaining seven were premium four-bedroom apartments and they were sold for an average of $3,560 psf.
Next to The Avenir is The Regalia, a freehold, 116-unit private condo completed in 1993. The last recorded transaction at The Regalia was for a 1,216 sq ft, three-bedroom unit on the 16th floor, purchased for $2.18 million ($1,792 psf), according to a caveat lodged in March 2018.
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Yong An Park - A 3,229 sq ft, four-bedroom unit on the 14th floor of one of the blocks changed hands for $6.08 million ($1,883 psf) in July 2019 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
A 3,229 sq ft, four-bedroom unit on the 14th floor of one of the blocks changed hands for $6.08 million ($1,883 psf) in July 2019 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Meanwhile, at Yong An Park, the most recent transaction was for a 3,229 sq ft, four-bedroom unit on the 14th floor of one of the blocks. It changed hands for $6.08 million ($1,883 psf) in July 2019. The 288-unit, freehold Yong An Park was built in 1986, some 34 years ago. One has to take into consideration the state of the old apartment and whether it has been refurbished, notes Edmund Tie’s Tan.

‘OLD IS GOLD’

However, there are some luxury condominiums that fall into the category of “old is gold”, says Bruce Lye, managing partner of SRI. These developments continue to be sought after and are able to hold their prices despite their age, he adds, citing Ardmore Park Condo, Four Seasons Park and The Claymore as examples. These developments were built in an era where luxury equates to spacious apartments.
At the freehold, 202-unit Four Seasons Park located on Cuscaden Walk, a 6,157 sq ft, five-bedroom penthouse on the 26th floor of one of the three towers fetched $17.88 million ($2,904 psf) in December last year. It is the second highest transacted price in the luxury condo completed in 1994, in absolute terms. The highest price achieved was for the neighbouring 7,772 sq ft penthouse that went for $23 million ($2,959 psf) at the last peak in August 2010.
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A 4,919 sq ft, six-bedroom penthouse on the 26th floor of one of the two towers at The Claymore was sold for $15.2 million last September (Photo: The Edge Singapore)
A 4,919 sq ft, six-bedroom penthouse on the 26th floor of one of the two towers at The Claymore was sold for $15.2 million last September (Photo: The Edge Singapore)
Located just off Orchard Road is the 35-year-old The Claymore. Completed in 1985, the 146-unit luxury condo has seen a resurgence in buying interest. A 4,919 sq ft, six-bedroom penthouse on the 26th floor of one of the two towers was sold for $15.2 million last September – the highest absolute price achieved for a single unit in the condo to date. At $3,090 psf, it is the second highest transacted psf price in the development since the peak in July 2007, when a 2,680 sq ft, three-bedroom unit changed hands for $8.55 million ($3,190 psf).
Meanwhile, units at the 19-year-old Ardmore Park Condo continue to command prices above $3,000 psf despite being surrounded by newer, luxury offerings. For instance, a 2,885 sq ft, four-bedroom unit on the 28th floor of one of the three, 30-storey towers changed hands for $9.5 million ($3,293 psf), based on a caveat lodged in December 2019.
Nearby is the 43-unit Le Nouvel Ardmore. Designed by the Pritzker Architecture Prize laureate Jean Nouvel as an exclusive 36-storey tower, the project was completed in 2014. The latest transaction was for a 4,133 sq ft, four-bedroom unit that was sold for $15.7 million ($3,800 psf) in December.
The rich continue to favour the traditional prime postcodes of Districts 9 and 10, which are areas around Orchard Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The rich continue to favour the traditional prime postcodes of Districts 9 and 10, which are areas around Orchard Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Traditional prime districts favoured

The rich continue to favour the traditional prime postcodes of Districts 9 and 10, which are areas around Orchard Road, such as the Claymore-Ardmore Park enclave; Nassim Road and Orange Grove Road neighbourhood; as well as in the vicinity of Orchard Boulevard, Angullia Park, Cuscaden Walk and Cuscaden Road. “We are getting a lot of enquiries for developments in these areas,” says Lye.
Condominiums in these areas saw a pick-up in transactions towards the end of last year. At TwentyOne Angullia Park, two units were sold in December. One was a 3,154 sq ft, four-bedroom unit on the eighth floor of the 36-storey tower which was sold for $11.1 million ($3,520 psf). The other was a 1,163 sq ft, two-bedroom unit that was snapped up for $3.98 million ($3,424 psf). The 54-unit, 36-storey condominium tow- er was completed in 2014.
In the vaunted Nassim area, the condo on the radar of high-net-worth home buyers is the 100-unit Nassim Park Residences, which was completed in 2011. The latest unit to change hands in the luxury condo was a 4,833 sq ft, four-bedroom unit on the first level that fetched $13.8 million ($2,855 psf) in late November.
Debuting in the coming months is the 101 unit 19 Nassim on Nassim Hill by Keppel Land.
In December, a three-bedroom unit of 1,808 sq ft on the 32nd floor of The Orchard Residences changed hands for $5.8 million ($3,207 psf) [Photo: Samuel Isaac Chua/EdgeProp Singapore]
In December, a three-bedroom unit of 1,808 sq ft on the 32nd floor of The Orchard Residences changed hands for $5.8 million ($3,207 psf) [Photo: Samuel Isaac Chua/EdgeProp Singapore]
Also seeing renewed activity is The Orchard Residences, which sits on top of the ION Orchard mall and Orchard MRT Station. The 175-unit, 99-year leasehold, luxury condo was completed in 2010 and boasts an Orchard Boulevard address. In December, a three-bed- room unit of 1,808 sq ft on the 32nd floor of the 54-storey residential tower changed hands for $5.8 million ($3,207 psf). A neighbouring, four-bedroom unit of 2,465 sq ft was sold in October for $8.3 million ($3,367 psf).

‘Ripple effect’

“The prices achieved at the new project launches in the CCR has definitely had a ripple effect on prices of some of the other luxury condos in the resale market,” says Edmund Tie’s Tan. “We envisage a moderate recovery in sales volume and prices in 2020, backed by continued high market liquidity and low interest rates.”
In 2018, there were 4.2 times as many resales (2,276 transactions) as there were new non-landed home sales (537 units) in the CCR. Last year, 20 of the 52 projects were in the traditional prime districts of 9, 10 and 11. Hence, the number of new sales in the CCR increased to 894 units in 2019, while volume of resales shrank to 1,767 units (see table below “Non-landed transactions in the CCR by type of sale”).
non-landed transactions
In the past, large units and penthouses in the CCR had some of the lowest psf prices as their large sizes means big absolute price tags. Rising demand for such large units in recent years and their relative scarcity means they now command a premium over typical units in the condo.
An example is a 10,775 sq ft duplex at Grange Infinite that is on the market for $28.8 million ($2,673 psf). The duplex is located on the 34th and 35th floors, and was originally two individual five-bedroom units of 5,339 sq ft and $5,436 sq ft respectively. The owner had purchased the two units in 2008 for $10.14 mil- lion and $10.33 million respectively, or an average of $1,900 psf for both.
The owner added a staircase to link the two units which sit on top of each other, and converted one of the bedrooms into a home theatre and another bedroom into an office. He is said to have spent over $4 million to renovate the unit into a luxurious, eight-bedroom duplex. “The unit size, finishing and unblocked views of Orchard Road make it one of the most unique properties on the market today,” says Lye, the exclusive marketing agent for the duplex at Grange Infinite. In fact, the duplex is even bigger than the 9,462 sq ft, super pent- house sitting above it.
A 10,775 sq ft duplex apartment on the 34th and 35th floors of Grange Infinite, which is on the market for $28.8 million ($2,673 psf), was fully renovated for over $4 million and has unparalleled views of Orchard Road (Photo: SRI)
A 10,775 sq ft duplex apartment on the 34th and 35th floors of Grange Infinite, which is on the market for $28.8 million ($2,673 psf), was fully renovated for over $4 million and has unparalleled views of Orchard Road (Photo: SRI)
The 68-unit, 36-storey Grange Infinite was completed in 2011, and is located on Grange Road. Nearby is New Futura on Leonie Hill Road. The 118-unit, freehold condo, which was completed in 2017 and launched in January 2018, saw a 7,836 sq ft penthouse sold for $36.28 million ($4,630 psf). This is a premium to the typical units which were sold at an average of $3,428 psf, based on caveats lodged to date.
At Grange Infinite, the most recent transaction was for a 2,368 sq ft, three-bedroom unit on the seventh floor that was sold for $4.5 mil- lion ($1,900 psf), according to a caveat lodged in May 2019.
At New Futura, the latest three-bedroom unit sold was a 1,830 sq ft, apartment on the ninth floor that fetched $6.18 million ($3,379 psf), based on a caveat lodged in June 2019.
At Grange Infinite, the most recent transaction was for a 2,368 sq ft, three-bedroom unit on the seventh floor that was sold for $4.5 million ($1,900 psf), according to a caveat lodged in May 2019 (Photo: The Edge Singapore)
At Grange Infinite, the most recent transaction was for a 2,368 sq ft, three-bedroom unit on the seventh floor that was sold for $4.5 million ($1,900 psf), according to a caveat lodged in May 2019 (Photo: The Edge Singapore)

Pick-up in resales?

New project launches in the CCR are likely to continue attracting the interest of high-net-worth individuals, both local and foreign. With project launches in the CCR expected to set new benchmark prices, Lye reckons resale market activity should pick up later this year. At Urban Suites, a high-end condo located on Hullet Road, just off Cairnhill Road, which was launched a decade ago, the two biggest 4,715 sq ft penthouses fetched prices of $10.05 million ($2,132 psf) and $10.43 million ($2,213 psf) respectively in February 2010.
The 165-unit, freehold Urban Suites was completed in 2013. The latest transaction in the development was for a 2,002 sq ft, four-bedroom unit that changed hands for $5.3 million ($2,647 psf), according to a caveat lodged in May 2019. Meanwhile, one of the 4,715 sq ft, duplex penthouses is now on the market for $13.5 million ($2,863 psf), with Lye as the exclusive agent.
“Based on the sales achieved at recent new launches such as The Avenir and Leedon Green, it is clear that there’s a lot of interest in the big units,” says Lye. “Some are looking to buy for investment while others are buying for their own use or for their children.” According to Lye, resale units with unique attributes should still stand out.
A 4,715 sq ft, duplex penthouses at Urban Suites is on the market for $13.5 million ($2,863 psf) [Photo: SRI]
A 4,715 sq ft, duplex penthouses at Urban Suites is on the market for $13.5 million ($2,863 psf) [Photo: SRI]

Mortgagee sales in auction market

A number of penthouses in the prime districts have surfaced in the auction market as mortgagee sales. One of them is a triplex penthouse on the 19th floor of Helios Residences located on Cairnhill Circle. The 140-unit, freehold condominium was completed in 2011.
The 4,629 sq ft triplex penthouse at Helios Residences comes with four bedrooms, a study, internal lift to all three levels and private lift access. The property will be put up for auction by Edmund Tie on Jan 21, with a guide price of $9.8 million ($2,117 psf).
The last transaction at Helios Residences was for a 1,281 sq ft, three-bedroom unit on the 19th floor that changed hands for $2.95 million ($2,303 psf) in November.
A 3,907 sq ft, duplex penthouse at The Orange Grove will be put up for auction with an indicative price of $8.68 million ($2,222 psf) [Photo: Samuel Isaac Chua/EdgeProp Singapore]
A 3,907 sq ft, duplex penthouse at The Orange Grove will be put up for auction with an indicative price of $8.68 million ($2,222 psf) [Photo: Samuel Isaac Chua/EdgeProp Singapore]
One penthouse that will be headlining Edmund Tie’s Jan 21 auction is a 3,907 sq ft duplex at The Orange Grove, where the indicative price is $8.68 million ($2,222 psf). The 72-unit, freehold luxury condo along Orange Grove Road was completed in 2010.
The last transaction at The Orange Grove was in July 2018, when a 2,153 sq ft, three-bed- room unit on the ninth floor of the 12-storey development was sold for $4.85 million ($2,253 psf).

Heightened interest, moderate recovery

Edmund Tie’s Tan expects heightened interest from investors on the quest for “viable investment destinations”. The Singapore private residential market is perceived to be attractive given its stable investment environment, long- term capital preservation and an active resale market, she adds.
“We envisage continuing local and foreign home buyer interest for well-positioned and attractively designed private homes, such as projects near MRT stations and lifestyle amenities,” notes Tan
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