Narrowing price gap between resale units and new launches draws investors
By Michael Lim
/ The Edge Property |
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 and completed in 2008.
In Tanjong Pagar in District 2, a 936 sq ft two-bedroom penthouse on the 41st floor of Icon changed hands for $1.65 million ($1,762psf), reflecting a 12% loss for the owner who paid $1.87 million ($2,000 psf) for the unit in 2007. “Perhaps the seller decided to cut his losses and is selling now because he can’t see the light at the end of the tunnel, as there’s no indication when the property cooling measures will be lifted,” says Ku. The 646-unit, 99-yearleasehold condo by Far East Organization was completed in 2007.
A unit at Icon in Tanjong Pagar was sold for $1.65 million ($1,762 psf), reflecting
a 12% loss for the owner who paid $1.87 million ($2,000 psf) for it in 2007
In the current market, it seems that the price psf of a 99-year leasehold project in Marina Bay is comparable with a freehold condo in prime District 9. For instance, a unit at VisionCrest on Oxley Rise off Orchard Road in prime District 9 was sold for $2.35 million($1,967 psf), according to a caveat lodged on Sept 8. The 265-unit freehold condo by Wing Tai was completed in 2007.
In the Robertson Quay area in prime District 9, a 1,055 sq ft unit on the 20th floor of one of the towers at RiverGate changed hands for $2.19 million($2,076 psf), according to a Sept 8 caveat. The seller had purchased the unit five years ago for $2.32 million ($2,200 psf). The 545-unit landmark condo was jointly developed by CapitaLand and Hwa Hong Corp and completed in 2009.
A 1,055 sq ft unit on the 20th floor of one of the towers at River-
E Gate changed hands for $2.19 million ($2,076 psf)
What is interesting is that the resale prices of the units at RiverGate, The Sail and VisionCrest, which are located in the CCR, are comparable to Keppel Land’s Highline Residences, a 500-unit, 99-year leasehold condo located in the city fringe of Tiong Bahru, where 20 units were recently sold at an average price of $1,900 psf. The development is located on Kim Tian Road in District 3, which is considered to be located in the Rest of Central Region or city fringe area.
List of new projects in District 3
Project Name | Tenure | Completion | Min Price (S$ psf) | Avg Price (S$ psf) | Max Price (S$ psf) |
|---|---|---|---|---|---|
99 years | Uncompleted | 1,747 | 1,908 | 2,108 | |
99 years | Uncompleted | 1,614 | 1,746 | 1,984 | |
99 years | Uncompleted | 1,539 | 1,712 | 1,856 | |
99 years | Uncompleted | 1,605 | 1,700 | 1,839 | |
99 years | Uncompleted | 1,531 | 1,531 | 1,531 |
Source: URA, The Edge Property
This article appeared in the City & Country of Issue 696 (Sep 28, 2015) of The Edge Singapore.
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