SINGAPORE (EDGEPROP) – Last month, a four-bedroom unit in The Orchard Residences was sold for $10.25 million ($3,493 psf), resulting in a loss of approximately $1.75 million. The seller had purchased the 2,852-sq ft unit on the 46th floor in May 2010 for $12 million ($4,207 psf).

We used our analytics tool, “Is it a Good Deal?”, to determine whether the buyer of the four-bedroom unit in the 99-year leasehold condo secured a good deal.

Located in in the heart of Orchard Road

The Orchard Residences is located along Orchard Boulevard, in prime District 9 and the Orchard Planning Area. The 99-year leasehold condo obtained its temporary occupation permit (TOP) in 2010 and has a remaining lease of 81 years. The luxurious development features 175 units, comprising only three-bedroom and four-bedroom flats, with sizes ranging from 1,808 sq ft to 6,534 sq ft.

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As The Orchard Residences is located in the heart of Singapore’s main shopping and hotel belt, it is within walking distance of numerous malls and hotels, including ION Orchard, Wheelock Place, Wisma Atria, Ngee Ann City, Palais Renaissance, Scotts Square, Tang Plaza, Four Seasons Hotel, Grand Hyatt Singapore, and Singapore Marriott Tang Plaza Hotel. Additionally, the dual-line Orchard MRT Station is just a short walk away (see Map 1).

The main drawback of the condo is the lack of primary schools within a 1km radius (see Screenshot 1). However, there are six primary schools within a 2km radius, namely Alexandra Primary School, Anglo-Chinese School (Junior), Anglo-Chinese School (Primary), River Valley Primary School, Singapore Chinese Girls' Primary School, and St. Margaret's School (Primary).

However, parents should note that Anglo-Chinese School (Primary) will move from its current campus along Barker Road to Tengah in 2030. Additionally, St. Margaret's School (Primary) is currently located at a temporary site along Mattar Road due to upgrading works. The school will move back to its permanent location along Sophia Road in December.

Transacted price higher than district’s average

Our “Is it a Good Deal?” analytics tool indicates that the transacted price is higher than the average price for the district and for the condo (see Screenshot 2).

The Orchard Residence has one profitable and two unprofitable transactions this year

Since its launch in 2007, there have been 45 profitable and 31 unprofitable transactions for The Orchard Residences. However, the number of unprofitable transactions has outweighed the profitable ones since the pandemic. Since 2020, The Orchard Residences has three profitable and 12 unprofitable transactions. So far this year, one profitable and two unprofitable transactions have taken place for the development (see Table 1).

The unprofitable transaction that took place last month was for a unit on the 46th floor, measuring 2,852 sq ft. The unit has four bedrooms, each with its own attached bathroom (see Floor Plan 1). It also features a private lift lobby, a spacious living and dining area, as well as both a dry and wet kitchen.

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The second unprofitable transaction was for a 3+1-bedroom unit measuring 2,174 sq ft. The seller bought the 11th-floor unit in October 2010 for $6.6 million ($3,035 psf) and sold it in May for almost $5.69 million ($2,616 psf), incurring a loss of approximately $911,000.

The unit has a master bedroom with an attached bathroom and a walk-in wardrobe. The other two bedrooms also have their own attached bathrooms. There is a study next to Bedroom 2, whose walls can be removed to increase the size of the living and dining area or Bedroom 2 (see Floor Plan 2).

Interestingly, the unit from the lone profitable transaction this year is from the same stack as the unprofitable unit on the 11th floor. Both units also share the same floor layout and size. However, the profitable unit is on the 18th floor and was sold in February for $6.9 million ($3,173 psf), which is $557 psf higher than the sale price of the unprofitable unit on the 11th floor. The seller of #18-XX had purchased it in July 2009 for $6.061 million ($2,788 psf), which is $247 psf lower than the purchase price of the unit on the 11th floor.

Weaker price growth

The Orchard Residences was launched for sale in 2007. That year, the development achieved an average price of $3,323 psf based on 97 new sale transactions and six sub-sale transactions. Since then, the average price has dipped by 5.9% to $3,127 psf this year, based on three resale transactions (see Chart 1). The average price for the condo reached a record low of $2,921 psf in 2021. Prices for The Orchard Residences have since rallied but still fall short of the peak reached in 2012, when the average price was $4,082 psf.

The average resale price for The Orchard Residences ($3,127 psf) has trended above that of 99-year leasehold condos in District 9 ($2,183 psf) and the Core Central Region (CCR) ($2,174 psf) since 2014 (see Chart 2). However, the average resale price for The Orchard Residences has inched down by 1.2% since 2020. In contrast, the average resale prices for leasehold condos in District 9 and CCR have risen by 12.1% and 5.3%, respectively.

Neighbouring condos are all freehold developments

There are 27 condos, representing approximately 2,100 units, within a 500m radius of The Orchard Residences, including Scotts Square, Four Seasons Park, Boulevard 88, Paterson Suites, and Paterson Linc. Notably, all 27 developments have freehold tenures.

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Among its immediate neighbours, Boulevard 88 ($3,863 psf), Scotts Square ($3,204 psf), and Four Seasons Park ($3,361 psf) have higher average prices (based on transactions over the past 12 months) than The Orchard Residences ($3,187 psf) (see Table 2). The high price achieved by Boulevard 88 could be attributed to its age, as it obtained TOP last year. Scotts Square (TOP in 2011) is a year younger than The Orchard Residences (TOP in 2010), while Four Seasons Park (TOP in 1994) is significantly older.

Paterson Suites and Paterson Linc are the only two developments that obtained TOP in the same year as The Orchard Residences (see Table 2). However, Paterson Linc is a small development with only 35 units. Paterson Suites ($2,732 psf) and Paterson Linc ($2,357 psf) have average prices that are lower than The Orchard Residences.

Paterson Suites is a 102-unit development located along Paterson Road, while Scotts Square is a 338-unit development located along Scotts Road (see Map 2). Both are freehold developments in District 9 and are located within a 500m radius of The Orchard Residences.

Comparing The Orchard Residences with Scotts Square and Paterson Suites

At the time of writing, Scotts Square has 65 unprofitable and nine profitable transactions since its launch in 2007. The losses range from breakeven to $1.56 million, while the profits range from approximately $28,000 to $700,000. This year, four unprofitable and no profitable transactions have taken place for the development (see Table 3). Our previous article on Scotts Square examined the reasons for its unprofitability, which included the timing of purchase for the unprofitable units and competition from nearby developments.

Sellers of units in Paterson Suites have fared better. Since its launch in 2007, the development has 22 profitable and 17 unprofitable transactions. Profits range from approximately $65,000 to $930,000, while losses range from approximately $43,000 to $6.2 million. This year, the development has had three profitable and no unprofitable transactions (see Table 4).

The transaction that yielded the record-high profit of $930,000 for Paterson Suites took place this year. The 2,164-sq ft four-bedroom unit is on the second floor and was sold in March for $5.88 million ($2,718 psf). The seller had purchased it in February 2021 for $4.95 million ($2,288 psf).

Of the four bedrooms in the unit, two have attached bathrooms (see Floor Plan 3). The unit also features a private lift and a sizable balcony.

The average resale price for The Orchard Residences has declined since 2020

Despite its profitability, the average resale price for Paterson Suites ($2,760 psf) has trended below that of The Orchard Residences and Scotts Square since 2014 (see Chart 3). The average resale price for The Orchard Residences was below that of Scotts Square from 2019 to 2022 before rallying last year. However, the average price for The Orchard Residences ($3,127 psf) has fallen below that of Scotts Square ($3,186 psf) this year.

Despite having the lowest average resale price, Paterson Suites has experienced the strongest price growth. Since 2020, the average resale price for Paterson Suites has risen by 16.3%. In contrast, the average resale prices for The Orchard Residences and Scotts Square have fallen by 1.2% and 8.3%, respectively.

Conclusion

The Orchard Residences is located a short walk from the dual-line Orchard MRT Station and numerous high-end malls and hotels. However, its desirable location was unable to prevent its sellers from incurring losses.

One reason could be its leasehold tenure. Buyers have many nearby freehold developments to choose from, including Paterson Suites. This freehold development obtained its TOP in the same year as The Orchard Residences. Furthermore, Paterson Suites has a lower average resale price than The Orchard Residences and has had no unprofitable transactions this year. Additionally, the average resale price for Paterson Suites has increased since 2020, while that for The Orchard Residences has declined.

It is also notable that the buyer of the unprofitable unit on the 46th floor paid $3,593 psf for the four-bedroom unit, which is $466 psf higher than the average price of $3,127 psf for The Orchard Residences this year. Despite paying a higher-than-average price, the seller still suffered a loss, which could be attributed to the higher-than-average price of $4,207 psf paid by the seller when purchasing the unit in 2010. That year, the average price for The Orchard Residences was only $3,415 psf.

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

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