Some Orchard Road condos miss out on property gains

By
/ EdgeProp
|
June 3, 2018 8:00 AM SGT
Some transactions in the luxury homes market within the Orchard Road area are still making losses. Given that the area is a coveted prime spot, why aren’t home prices fetching much more?
The 150-unit Cuscaden Residences, on Cuscaden Road, is a 14-minute walk to the Orchard MRT station (Credit: The Edge Singapore)
Take Cuscaden Residences, for instance. This year, the only two units sold at the Cuscaden Road condominium changed hands at a loss. The 150-unit freehold development, by HPL Properties, is a 14-minute walk from ION Orchard mall.
A 2,077 sq ft, three-bedroom unit on a high floor at Cuscaden Residences was sold for $4.8 million ($2,311 psf) in May; the owner purchased it in 2011 for $5.5 million ($2,647 psf).
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A smaller three-bedroom unit of 1,485 sq ft was sold for $3.12 million ($2,100 psf) in March. The mid-floor unit was also bought seven years ago, at $3.33 million ($2,242 psf).
Dominic Lee, head of the luxury team at PropNex Realty, attributes the owners’ losses to timing. “Their entry point was in 2011, when the market was nearing peak prices, and they sold the units at the beginning of another upturn,” he explains. “Do note also that the property market now has much more controlled growth, owing to the cooling measures in place.”
“If they had held out for two more years, I’m quite sure they would have got a higher price than what they got now,” Lee points out. After all, the average transaction price at Cuscaden Residences has risen 15.9% y-o-y, from $1,918 psf in 2017 to $2,223 psf this year.
Meanwhile, opposite Cuscaden Residences, the 173-unit St Regis Residences, a 999-year leasehold project by City Developments, saw four transactions this year, of which three incurred losses (after factoring in inflation) and one made a $600,000 gain over a holding period of six years.
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But the losing trend does not hold for all developments in the vicinity. At the freehold Four Seasons Park on Orchard Boulevard, the latest transaction was for a 2,260 sq ft, four-bedroom unit that changed hands for $5.5 million ($2,433 psf) in April. The owner had purchased the unit for $2.2 million ($973 psf) in 1999.
“Prices at Four Seasons Park follow the market trend, but in a rising market, prices rise higher,” says Suzie Mok, senior director of investment sales at Savills Singapore.
Further along Orchard Boulevard is 3 Orchard By-The-Park, a site that YTL Corp purchased en bloc for $435 million in November 2007. PropNex’s Lee, who is marketing the property, says YTL will conduct a soft launch at end-June, when 29 of the 77 units in the luxury project will be up for sale, at psf prices starting from $4,000.
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The flurry of activity in the vicinity is bound to lift prices of neighbouring homes. Orchard Bel-Air, marketed by Savills’ Mok, is currently attempting a collective sale. The process is still underway, she says. But she remains optimistic as the Government Land Sales site on Cuscaden Road, which drew a top bid of $410 million, or $2,377 psf per plot ratio, has helped to boost prices in the vicinity.