SINGAPORE (EDGEPROP) – This month saw the sale of a one-bedroom unit in freehold Spottiswoode 18 for $1,593 psf, resulting in a loss of approximately $80,000 for the seller. The seller had purchased the 753-sq ft unit in February 2011 for $1,699 psf. This is also the development’s first unprofitable transaction of the year, out of a total of nine resale transactions. The other eight transactions yielded profits ranging from approximately $80,000 to $188,400.

At the time of writing, Spottiswoode 18 achieved 25 unprofitable and 61 profitable transactions out of 90 resale and sub-sale transactions. Losses from the 25 unprofitable transactions ranged from approximately $2,800 to $649,000. Hence, the loss of approximately $80,000 from this year’s unprofitable transaction is at the lower end of the loss spectrum. The largest loss was for a one-bedroom unit on the 35th floor. The seller sold the 893-sq ft unit in June 2020 for $1,433 psf, having purchased it in February 2011 for $2,159 psf.

Profits from the 61 profitable transactions range from approximately $11,000 to $243,000. The transaction that yielded the largest profit was for a two-bedroom unit on the 10th floor. The seller sold the 657-sq ft unit in October last year for $2,191 psf after purchasing it in February 2011 for $1,821 psf.

Read also: Freehold penthouse at Spottiswoode Residences up for auction at $5.1 mil

We used our analytics tool, 'Is it a Good Deal?', to determine whether the only unprofitable sale transacted this year constituted a good bargain for the buyer.

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Well-located freehold development

Spottiswoode 18 is a freehold development located along Spottiswoode Park Road. The condo is situated within District 2 and in the Bukit Merah Planning Area. The development obtained its temporary occupation permit (TOP) in 2014. Spottiswoode 18 features 251 units comprising one and two-bedroom units, with sizes ranging from 387 sq ft to 1,324 sq ft.

Amenities within a 1km radius include Everton Park, Chinatown Complex, Tanjong Pagar Plaza, 100 AM, Cantonment Primary School, Pearl’s Hill City Park, Singapore General Hospital, the Central Expressway, and the Ayer Rajah Expressway. Cantonment MRT Station (Circle Line) is the nearest station, but it is not expected to be operational until 2026. Currently, the nearest active station is Outram Park MRT Station, which serves the East-West, North-East, and Thomson-East Coast Lines.

Seems like a good deal for the buyer

According to our 'Is it a Good Deal?' analytics tool, it appears that the buyer has managed to secure a good deal. The transacted price is below the average prices for Spottiswoode 18, District 2, and four nearby projects. The freehold tenure of Spottiswoode 18 and its proximity to two MRT stations are additional advantages.

Preference for indoor space

Buyers’ preference for indoor space over outdoor space could have contributed to the $80,000 loss. The one-bedroom unit has a compact living and dining area. Additionally, the galley kitchen has enough space for cabinets on one side only. The 753-sq ft unit also has a large outdoor terrace with a jacuzzi, but the hot and humid weather in Singapore might prevent frequent usage of the outdoor space.

The unit that yielded the highest loss of approximately $649,000 also has a lot of outdoor space. It is a one-bedroom penthouse that measures 893 sq ft. The first storey of the unit has a sizable balcony that can be accessed via the living area and the master bedroom. The second storey is wholly taken up by an open terrace and a private pool.

Read also: FoundOnEdgeProp: Live in popular Bukit Merah for under $1 million

In contrast, the unit with the highest profit of approximately $243,000 is a two-bedroom unit without an outdoor terrace. The only outdoor space that the 657-sq ft unit has is a balcony that is accessible via the living area.

The units with the second and third highest profits of approximately $188,000 and $166,000 share the same floor layout, which does not have an open terrace. The 506-sq ft units have a one-bedroom-plus-study layout that features a long balcony stretching from the living area and study to the master bedroom.

Stable price growth for Spottiswoode 18

There are a number of condos within walking distance of Spottiswoode 18, but only four of them are freehold developments like Spottiswoode 18. They are Sky Everton, Spottiswoode Suites, Spottiswoode Residences, and The Arris. All four developments are also in District 2, like Spottiswoode 18. However, The Arris is in the Outram Planning Area, while Spottiswoode 18, Sky Everton, Spottiswoode Suites, and Spottiswoode Residences are in the Bukit Merah Planning Area.

Spottiswoode 18 (TOP in 2014), Spottiswoode Suites (TOP in 2017), and Spottiswoode Residences (TOP in 2013) obtained their TOP within a few years of each other, while Sky Everton is significantly younger, having obtained its TOP last year. Additionally, The Arris is 12 years older than Spottiswoode 18.

Based on transactions for this year, the average resale price for Spottiswoode 18 ($2,279 psf) falls between that of Spottiswoode Suites ($2,383 psf) and Spottiswoode Residences ($2,190 psf).

In terms of price growth, Spottiswoode 18 has also occupied the middle ground. From 2018 to this year, the average price growth for Spottiswoode Suites (9.5%) was the strongest, followed by Spottiswoode 18 (8.7%) and Spottiswoode Residences (7%).

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Average resale price for Spottiswoode 18 mirrors District 2

The average resale price for Spottiswoode 18 consistently exceeds that for freehold condos in the Bukit Merah Planning Area but closely mirrors its counterparts in District 2. This year, the resale price gap between Spottiswoode 18 and District 2 has narrowed because the average resale price for Spottiswoode 18 inched up by 1.7% y-o-y to $2,279 psf, while declining by 0.9% y-o-y to $2,294 psf for freehold condos in District 2. The average price for freehold condos in the Bukit Merah Planning Area also decreased by 1.3% y-o-y to $2,070 psf this year.

However, the average price growth for Spottiswoode 18 still lags behind its counterparts in District 2 and the Bukit Merah Planning Area. Since 2017, the average resale price for Spottiswoode 18 grew by 12.9%, compared to freehold condos in District 2 (19.8%) and the Bukit Merah Planning Area (29%).

It is notable that the average price for freehold condos in District 2 ($2,294 psf) is significantly higher than their counterparts islandwide ($1,826 psf). However, a stronger price growth of 22.8% since 2017 has been achieved by freehold condos islandwide compared to their counterparts in District 2 (19.8%).

Conclusion

Several units in Spottiswoode 18 have an open terrace that may not appeal to some buyers. The unprofitable transaction that took place this month and resulted in a loss of approximately $80,000 has such a layout. In contrast, the units that achieved the top three highest profitable transactions for Spottiswoode 18 do not have a roof terrace.

It should also be noted that weaker growth has been observed for the average resale price for Spottiswoode 18 compared to freehold condos in District 2 and the Bukit Merah Planning Area. Furthermore, Spottiswoode 18 only features units with one or two bedrooms, so the development is unlikely to attract large households. However, the development might still be appealing to smaller households because of its freehold tenure and excellent location.

To learn more about this transaction, and whether it is a good deal, click here.

Check out the latest listings for Spottiswoode 18, Spottiswoode Suites, Spottiswoode Residences properties

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