The last six months of 2014 saw the completion of four 99-year leasehold high-rise condominium towers in District 2 — from Shenton Way and Tanjong Pagar to Spottiswoode Park Road. They are the 202-unit 76 Shenton; the 280-unit Altez and the adjacent 360-unit Skysuites @ Anson; and the 251-unit Spottiswoode 18.
Together, they have increased the new supply of residences in District 2 by another 1,093 units. This has put pressure on investors looking for tenants. “With some developments located in close proximity to each other, there is certainly competition, leading to price pressure and compression of rents,” observes Tan Tee Khoon, executive director of Knight Frank.
Transactions have also dwindled significantly since 2012. There were 89 resale transactions of non-landed residential properties in District 2 in 2012. By 2013, following the hike in both additional buyer’s and seller’s stamp duties as well as the imposition of the total debt servicing ratio, transactions shrank to just 43, and halved to 23 by 2014. In the first three months of 2015, there were just three transactions. New residential sales in District 2 saw a similar downtrend, with transactions plunghing from 169 in 2012 to just 41 by end 2014, and down to just four in the first three months of 2015.
Last month saw two sub-sales at 76 Shenton. The most recent was for a 592 sq ft one-bedroom unit on the 34th level that changed hands in a sub-sale for $1.15 million ($1,943 psf), according to a caveat lodged on April 21. The other was the sub-sale of a 980 sq ft two-bedroom unit on the 21st level that fetched $1.78 million ($1,817 psf). When 76 Shenton was launched by Hong Leong Holdings in March 2010, all the residential units were snapped up at prices ranging from $1,600 psf to $2,200 psf within a day. Prices had hit a high of $2,559 psf.
The most recent sub-sale at 76 Shenton was for a 592 sq ft one-bedroom unit on the 34th level that changed hands for $1.15 million, according to a caveat lodged on April 21
Some buyers offloading their units have even been willing to sell below their original purchase prices. At Altez, a 990 s ft unit on the 21st floor changed hands last month at $1.9 million ($1,919 psf). The same unit had fetched $2.02 million ($2,042 psf) when the project was launched five years ago.
Meanwhile, the first 99-year leasehold private condo in the Tanjong Pagar area to be completed was the 646-unit Icon which was launched in 2003 and completed in 2007. The most recent transaction was for a 700 sq ft unit on the 27th floor that has changed hands six times. The unit fetched $1.2 million ($1,715 psf), according to a caeat lodged on April 7. It last changed hands for $1.211 million ($1,731 psf) in Nov 2010, after being sold for $1.085 million ($1,551 psf) in February that same year. When the unit was first sold back in July 2003, the price was just $508,220 ($726 psf).
However, Knight Frank’s Tan doesn’t expect prices to drop too significantly as developers with unsold units are still holding on to their asking prices. For example, as at end March, 83.2% of units at Altez has already been sold. Skysuites@Anson was 61.9% sold and Clermont Residences at Tanjong Pagar Centre where 16 units out of a total of 181 have been sold as of end March with the latest recorded transaction being the sale of a 1,625 sq ft unit on the 51st floor that went for $5.26 million ($3,238 psf), according to a caveat lodged in March.
This article appeared in the City & Country of Issue 676 (May 11) of The Edge Singapore.