Freehold buys below $1,000 psf in 2015 are value-for-money
By EdgeProp Singapore
/ EdgeProp |
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The demand for older freehold apartments and condominiums seems to have picked up in the first week of August, according to caveats lodged with URA Realis from Aug 2 to 9. More than half of the completed units sold during the first week of August are either of 999-year leasehold or freehold tenure. Close to 50%of the properties in the sub-$1,000psf range were freehold rather than leasehold condos, with most of them located in the suburbs. According to property agents, this trend reflects the fact that most of the buyers today are owner-occupiers, who prefer older properties, as they tend to be larger and have more practical layouts.
From the caveats lodged, it seems that several buyers may have uncovered some of these gems, with some of the units transacted at prices either lower than or comparable to many of the 99-year leasehold projects launched recently.
One such freehold development is D-Mansions, which was completed in 1999 and comprises just nine units in a four-storey block. A 1,668 sq ft unit in the project on Dunman Lane in prime district 15 in East Coast recently changed hands for $1.3 million, or about $779 psf, according to a caveat lodged on Aug 5. The transaction price was identical to the previous owner’s purchase price in November 2010. If one were to factor in a mortgage, this would mean the seller could have incurred a slight loss.
A 1,668 sq ft unit in D-Mansions on Dunman Lane in prime district 15 in East Coast
recently changed hands for $1.3 million
Meanwhile, at Kings Apartments, a 24-unit freehold project located on Lorong K Telok Kurau, also in district15, a 1,152 sq ft unit was sold on Aug 5 for $1.03 million ($894psf). The owner had purchased it for$750,000 in August 2007 and therefore saw a 37.3% price appreciation over an eight-year period. The unit has changed hands four times since1995 and only once was it sold at a loss. According to URA Realis, the first owner paid $780,000 for the unit in 1995 and subsequently sold it at a 20% loss for $620,000 in September 2001. The unit then changed hands again when it was sold for a21% profit at $750,000 in August2007. Kings Apartments was completed in 1994.
A 1,152 sq ft unit at Kings Apartments in Telok Kurau was sold on Aug 5 for $1.03 million ($894 psf)
“This is a case for buying middle-aged freehold apartments because not only is the pricing attractive, but it also carries with it the en bloc potential some years down the road,” says Alan Cheong, head of research at Savills Singapore. “The game is to identify a property that not only fulfils one’s habitation objective, but also where the pricing has not yet factored in the en bloc premium.”
At Azalea Park Condo, located on Fernvale Road in Changi, a 1,507sq ft unit was recently sold for $1.1million ($730 psf). As there were no previous caveats lodged for the unit, it is likely that the seller could have purchased the unit from the developer more than 20 years ago. The316-unit project was completed by Tripartite Developers (a joint-venture company set up by Hong Leong Holdings, City Developments and Mitsui Fudosan) in 1996.
Just off Upper Bukit Timah Road and near the Bukit Timah Nature Reserve is Hume Park I, a 328-unit freehold condo developed by City Developments and completed in 1996. A 904 sq ft, two-bedroom unit changed hands recently for $850,000, or about $940 psf, according to the caveat lodged on Aug 4. The price was 70% higher than the $500,000 ($553 psf) the previous owner had paid for the resale unit in 1999.
Meanwhile, located off Sembawang Road is the 140-unit freehold Northwood condo developed by UIC and completed in 2009. A 1,453 sq ft unit on the ground floor changed hands at $1.2 million ($829psf) on Aug 6. According to a caveat lodged in June 2007, the unit was first purchased from the developer for $903,630 ($622 psf).
Unlike a developer that has a large marketing budget and the additional benefit of putting up showflats to capture the attention of potential buyers, the only tool left for individual sellers in the resale market is price, says Cheong of Savills. “Hence, in today’s market, in which buyers are staying on the sidelines, resellers may be frustrated by the longer time it takes to sell their unit on the market. This frustration could translate into their giving some ground to buyers.”
The demand for resale units has been consistent since the beginning of the year, observes Cheong. Based on URA Realis data, of the close to 8,000 apartments and condos transacted since the start of the year, 2,770 units, or slightly more than a quarter, are completed units. Of these, 1,500 units are in 999- or even 9,999-year leasehold and freehold developments.
List of freehold apartment projects selling below average price of $1,000 psf with the highest sales volume
Project Name | Completion | Avg Price (S$ psf) | Sales Volume | Avg Rent (S$ psf pm) | Rental Yield (%) |
|---|---|---|---|---|---|
SUNVILLE | 2005 | 917 | 6 | 2.9 | 3.8 |
1998 | 929 | 5 | 3 | 3.9 | |
2008 | 869 | 3 | 3 | 4.1 | |
1997 | 706 | 3 | 2.7 | 4.6 | |
2006 | 883 | 2 | - | - | |
1993 | 864 | 2 | 2.7 | 3.7 | |
1991 | 843 | 2 | - | - |
This article appeared in the City & Country of Issue 691 (Aug 24) of The Edge Singapore.
This article has been updated here.
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