Lingering spectre of narrowing gains, widening losses
By Tay Hock Meng
/ The Edge Property |
Investing in property is equivalent to a trading game in the stock market, says Alan Cheong, head of research at Savills Singapore. “A lot depends on the investor’s point of entry and exit,” he says. The result is contrasting fortunes of owners selling units around the same time and within the same condominium development.
At The Interlace, for instance, a two-bedroom unit changed hands for $1.4 million ($1,301 psf), according to a caveat lodged on Oct 20. The 1,076 sq ft unit was purchased in October 2009 for $1.1million ($1,026 psf). Prior to the recent transaction, a four-bedroom plus-study unit was sold for $2.6 million ($845 psf) in early October. The 3,079 sq ft unit was last purchased for $2.87 million ($933 psf) in April 2011, according to an earlier caveat lodged.
While the seller of the two-bedroom unit saw a gross capital appreciation of 26.8% over six years, the seller of the four-bedroom unit recognised a 9.4% loss over 4½ years. Developed by a joint venture between CapitaLand and Hotel Properties Ltd, The Interlace is a 99-year leasehold condo located on Depot Road that comprises 1,040 units. The project was completed in 2013.
Sitting at the fringe of Tanjong Pagar is Spottiswoode Park estate. At one of the privatised HUDC blocks on Spottiswoode Park Road, a 1,270 sq ft five room unit on the 20th floor was sold for $800,000 ($630 psf), according to a caveat lodged on Oct 20.The unit last changed hands for $1.03 million ($811psf) in August 2013, according to an earlier caveat lodged. This translates into a 22.3% or $230,000 loss. If the seller’s stamp duty of 8% is taken into consideration, the loss would widen to $294,000, estimates Cheong.
A five-room flat at a privatised HUDC block in Spottiswoode Park changed hands for $800,000 ($630 psf)
“The thin transaction volume of the flats at Spottiswoode Park estate might have compelled the seller to accept the low offer price made by the buyer,” he reckons.
Now, new condos such as Spottiswoode Residences, 18 Spottiswoode and Spottiswoode Suites have sprung up. But the original Spottiswoode Park estate contained houses built by the Port of Singapore Authority for its staff that were completed in1975. Many of these flats were handed over to HDB in 1979, while four blocks were privatised. They were blocks 101, 102, 105 and 107. The unit transacted recently is located in block 107.
Non-landed developments on Spottiswoode Park Road
Project Name | Tenure | Completion | Avg Price ($ psf) | Sales Volume | Avg Rent ($ psf pm) | Rental Volume | Rental Yield (%) |
|---|---|---|---|---|---|---|---|
99 years | Unknown | 684 | 2 | 2.8 | 28 | 4.9 | |
Freehold | 2014 | 2052 | 2 | 5.9 | 36 | 3.5 | |
Freehold | Uncompleted | 2381 | 1 | - | - | - |
Source: URA, The Edge Property
In the luxury condo segment at Marina Bay, fortunes differ as well. At Marina Bay Residences, a1,055 sq ft two-bedroom unit on the 50th floor was transacted for $3.55 million ($3,365 psf), according to a caveat lodged on Oct 22. The unit was purchased in a sub-sale for $2.98 million ($2,821 psf) in March 2010, based on the previous caveat lodged. Therefore, the seller saw a 19.3% capital gain over a five-year period.
The 428-unit 99-year leasehold development is part of the giant mixed-use scheme Marina Bay Financial Centre and was completed five years ago. MBFC is developed by a consortium made up of CK Hutchison Holdings, Hongkong Land and Keppel Land.
At The Sail @ Marina Bay, a 1,755 sq ft apartment with three bedrooms and a family room on the 63rd floor of Tower 1 was put up for auction by DTZ on Oct 21. Tower 1 has 70 storeys and is considered one of the tallest residential towers in Singapore. Launched for sale in 2004, the 99-year leasehold condo tower was completed in late 2008. Tower 2, which has 63 storeys, was launched for sale in 2005and completed in 2H2008. The twin towers were developed jointly by City Developments Ltd and AIG Real Estate and contain a total of 1,111 units.
The unit at The Sail @ Marina Bay was a mortgagee sale and put up for auction with an opening price of $3.88 million ($2,211 psf). It received an opening bid of $3.4 million, but the bid was not accepted and the property was withdrawn. Based on a caveat lodged, the owner paid $5 million ($2,850 psf) for the unit in May 2010. The opening bid was 22.4% lower than the owner’s purchase price.
The most recent recorded transaction at The Sail @ Marina Bay was for a one-bedroom unit on the 53rd floor of Tower 2. The 614 sq ft unit fetched $1.3 million ($2,119 psf), but the previous owner paid $1.68 million ($2,738 psf) for it in September 2011. Therefore, the seller saw a loss of some 22.6%.
In Sentosa Cove, the landmark 264-unit The Oceanfront was launched in mid-2006 and fully sold and completed in 2010. The most recent transaction was for a 2,077 sq ft four-bedroom unit that changed hands for $3.5 million ($1,685 psf), based on a caveat lodged on Oct 19. The previous owner paid $3.74 million ($1,800 psf) for the unit in January 2007, which means he saw a slight loss of 6.4%.
Prior to this transaction, a 1,216 sq ft unit on the second level of another block was sold for $1.85 million ($1,521 psf), according to a caveat lodged in May. The unit was purchased for $1.59 million ($1,307 psf) in September 2006. Therefore, the owner saw a 16.4% appreciation over a nine-year period.
At high-end condo Turquoise in Sentosa Cove, a unit debuted as a mortgagee sale at Knight Frank’s auction on Oct 22. The 2,433 sq ft apartment on the fifth floor comes with four bedrooms and a study. It had an opening price of $4 million ($1,644 psf) at the auction. A bid of $3.5 million ($1,439 psf) was turned down as it was below the reserve price. The original purchase price in October 2007 was $6.6 million ($2,712 psf).
This article appeared in the City & Country of Issue 702 (Nov 9, 2015) of The Edge Singapore.
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