Seller loses $4.3 mil at The Ritz-Carlton Residences

/ The Edge Property
April 6, 2016 9:39 AM SGT
At the last peak of the market in June 2013, a 2,831 sq ft three-bedroom unit on the 18th floor of the 36-storey The Ritz-Carlton Residences was sold for $10.8 million ($3,815 psf) to a mainland Chinese buyer. However, the unit recently changed hands for $7.1 million ($2,508 psf), according to a caveat lodged on March 18.
The seller of a unit at The Ritz-Carlton Residences incurred a loss of $3.7 million
as well as a seller’s stamp duty of $568,000.
While it is unclear whether the seller was a Singapore citizen or permanent resident, and whether he had to pay additional buyer’s stamp duty, it was clear he would have had to pay a seller’s stamp duty (SSD) of 8%, says Ku Swee Yong, CEO of Century 21.
As the unit was sold three years after its purchase, the 8% SSD incurred translated to $568,000. That is on top of the $3.7 million loss, bringing the total to $4.27 million. “The sale price is a sign of desperation,” says a property consultant who declined to be named.
In terms of price per sq ft, it is also the lowest in the 56-unit freehold luxury condo on Cairnhill Road, which was completed in 2011. Meanwhile, the developer, KOP Properties, sold two four-bedroom units in February. Based on caveats lodged, the unit on the 26th floor was sold for $10.6 million ($3,467 psf) and that on the 33rd floor fetched $11.6 million ($3,795 psf).
At Ardmore Park, a 2,885 sq ft unit on the 21st floor was sold for $8.18 million ($2,836 psf), based on a caveat lodged with URA Realis. The previous owners purchased the unit for $8 million ($2,773 psf) in December 2009, according to a caveat lodged then.
The 330-unit condo, which was completed in 2001, is “evergreen”, notes Ku. He reckons that the transaction prices, which are now fluctuating between $7.8 million and $8.5 million, are “a healthy sign”. If prices were to fall further to $7 million, “that will be a clear indication that many owners or the economy is in a really bad shape,” Ku says.
As the rental market is plunging, investors are less motivated to hold on to their units, preferring to offload them if they have problems leasing them out, says Jason Tan, executive director of luxury property marketer JTResi. “They have a greater motivation to sell now as rental yields have been eroded, and the recent Budget 2016 announcement has made it clear that the [cooling] measures are not going to be lifted any time soon,” he adds.
The ripple of activity at the top end of the market is also caused by some foreigners who had been sitting on the sidelines and have now decided to commit to a purchase, says Tan. “Since the government has said that it’s still premature for the cooling measures to be removed, they have decided to take the plunge,” he adds. “They are afraid that if they don’t get their hands on the choice units now, when the measures are lifted, the units would be snapped up and they won’t have an opportunity then.”
A 947 sq ft unit on the 40th floor of Scotts Square, a 338-unit luxury condo sitting on top of a shopping mall on Scotts Road, was sold for $2.9 million ($3,062 psf). Recent transaction prices at the condo had hovered in the range of $2,803 to $3,200 psf from January to March, based on caveats lodged.
This means that prices at Scotts Square are almost on a par with those achieved at Cairnhill Nine, where a unit on the 27th floor was sold for $2,807 psf. While Scotts Square is freehold, Cairnhill Nine is 99-year leasehold, notes Century 21’s Ku.
At OUE Twin Peaks, another 99-year leasehold luxury condo, a 570 sq ft one-bedroom unit on the 35th floor of one of the 36-storey twin towers was sold by the developer for $1.66 million ($2,918 psf), according to a caveat lodged on March 16. “The latest transaction price reflects the fact that the unit is pool-facing and on a high floor,” says Samuel Eyo, managing director of Singapore Christie’s Homes.
The 462-unit OUE Twin Peaks was completed last year. Based on caveats lodged to date, about 81 units have been sold. One-bedroom units at the condo command rents of about $7 psf a month, which translates to monthly rates of$4,000, reckons Eyo.
“There are investors who’re on the lookout for such deals, especially when the units at OUE Twin Peaks are fully furnished,” he says.
This article appeared in the City & Country, Issue 722 (April 4, 2016) of The Edge Singapore.