Narrowing price gap between resale units and new launches draws investors

By Michael Lim / The Edge Property | October 23, 2015 10:00 AM SGT
Property prices in the Core Central Region (CCR), namely prime Districts 9,10 and 11, as well as the CBD core (Districts 1 and 2) and Sentosa Cove (District 4) have corrected more significantly than the city fringe and suburban areas. This has resulted in a situation where the resale of a 99-year leasehold condominium along Newton Road in prime District 11 is cheaper in price psf compared with a new launch of a 99-year leasehold condo in the suburbs, says Donald Han, managing director of Chesterton Singapore.
For instance, a 1,259 sq ft three-bedroom unit on the 25th floor of Amaryllis Ville changed hands for $1.88 million ($1,493 psf). The 311-unit, 99-year leasehold condo was developed by Wing Tai Holdings and completed in 2004.
On the other hand, a 969 sq ft unit on the fourth floor of The Creek @ Bukit along Toh Tuck Road off Jalan Jurong Kechil was sold for $1.59 million ($1,641 psf). The 260-unit freehold development was launched two years ago by Chui Teng Group. As at end-August, 110 units (42%) had been sold. The price psf of the unit sold is higher than the price for the unit at Amaryllis Ville. The Creek @ Bukit is a low-rise project that comprises eight five-storey blocks.
“For astute investors, buying a unit in a development located in the CCR is a better proposition and will give them better returns in the long run,” says Ku Swee Yong, CEO of Century 21 Singapore. “Capital appreciation and rental reversion of projects in the CBD and prime districts are better and recover at a faster pace compared with those in the suburbs.” In times of an economic slump, the vacant period between tenants is also likely to be shorter as foreigners prefer to stay nearer to their workplace in the CBD, he adds.
Take for example The Sail @ Marina Bay, where a 614 sq ft one-bedroom unit on the 58th floor of one of the towers was sold for $1.2 million ($1,956 psf), according to a Sept 8 caveat. The owner had purchased the unit 10 years ago when the condo was launched and paid just $600,100 ($978 psf), according to a caveat lodged in October 2005. That means the owner saw a capital gain of 100%. The 1,111-unit, 99-year leasehold project, with high-rise twin towers of up to 70 storeys, was developed by City Developments...