HDB buyers scouring for resale deals in prime districts
By Michael Lim,
Tay Hock Meng
/ The Edge Property |
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Discerning buyers who have been on the lookout for a good buy have managed to find a number of attractively priced resale 99-year leasehold, 999-year leasehold and freehold properties in the prime residential districts of 9, 10, 11 and as well as in the downtown core and Sentosa Cove, collectively known as the Core Central Region (CCR). Some of the units were transacted at prices that are close to or even lower than new suburban and city fringe projects.
Projects with the highest sales volume in prime districts
Project Name | Tenure | Completion | Avg Price (S$ psf) | Sales Volume | Avg Rent (S$ psf pm) | Rental Volume | Rental Yield (%) |
|---|---|---|---|---|---|---|---|
99 years | 1998 | 1,237 | 8 | 3.4 | 23 | 3.3 | |
99 years | 1998 | 1,312 | 6 | 3.7 | 30 | 3.4 | |
Ridgewood | 999 years | 1981 | 1,195 | 5 | 2.8 | 57 | 2.8 |
Freehold | 1999 | 1,193 | 5 | 2.8 | 31 | 2.8 | |
Casabella | Freehold | 2005 | 1,295 | 4 | 3.5 | 9 | 3.2 |
Source: URA, The Edge Property
An increasing number of these purchasers have HDB addresses. According to Nicholas Mak, executive director of research at SLP International, District 10 appeared to be the most popular among such buyers.
In the first nine months of 2014, buyers with HDB addresses accounted for 99 transactions in District 10, 92 in District 9 and 50 in District 11. In downtown core, (District 1), buyers with HDB addresses accounted for 36 purchases.
From January to September this year, District 10 was still the most popular, with 107 transactions by those with HDB addresses, followed by District 9 (72) and District 11 (62), according to SLP Research. The downtown core saw 24 deals, and Sentosa Cove had four deals.
“Most HDB buyers that I have come across are actually investors,” says Bruce Lye, managing director, SLP International’s SRI5000. “They will typically look for 999-year leasehold and freehold prime developments that are in the $1.5 million to $2 million range.”
In fact, that is where the majority of the deals have been. According to SLP Research, those with HDB addresses contributed to 172 transactions (65.9%) of non-landed properties priced below $2 million in the CCR for the first nine months of this year. This was higher than the 165 deals (60.2%) for the first nine months of 2014.
For example, a 1,356 sq ft three-bedroom unit on the 16th floor of one of the towers at 999-year leasehold Valley Park was sold for $2.09 million ($1,541 psf), according to a caveat lodged on Oct 5. Another similar sized unit on the 8th floor of another tower changed hands last month for $2.05 million ($1,512 psf). The 728-unit Valley Park was developed by River Valley Properties and was completed in 1997. Sub-sales in 1997 when the project was completed ranged from $985 psf to $1,200 psf, according to caveats lodged.
A 1,356 sq ft three-bedroom unit on the 16th floor of one of the towers at 999-year leasehold Valley Park
was sold for $2.09 million ($1,541 psf), according to a caveat lodged on Oct 5
The units at the 18-year-old Valley Park are trading at a discount to RV Residences by Allgreen Properties located next door. Last month, an 861 sq ft three-bedroom unit was sold for $1.726 million ($2,004 psf). Prior to that, a 678 sq ft two-bedroom unit was sold for $1.44 million ($2,123 psf) in August. The 248-unit RV Residences was completed earlier this year and is also 999-year leasehold.
A 1,130 sq ft two-bedroom-plus-study on the sixth floor at The Verve @ RV was sold for $1.84 million ($1,626 psf) earlier this month. The Verve @ RV is developed by boutique developer The Heritage Group and contains just 26 units. The freehold project was completed in 2011, and this is the project’s first transaction in three years. The last unit that was sold was a 1,130 sq ft unit on the 14th floor that fetched $2.65 million ($2,345 psf) in December 2012.
When compared to the new launches of 99-year leasehold condos in the city fringe or suburbs, these older 999-year leasehold or freehold condos in the prime districts look attractive on a psf basis. This could explain why resale properties in the Core Central Region (CCR) are finding some buyer support, comments Eugene Lim, key executive officer of ERA Realty. “For the year 2015, prices have remained relatively stable,” he adds. “This stability has attracted buyers to the resale market.”
For instance, units at Valley Park may be trading in the range of $1,500 psf today. This is lower than the indicative launch price of $1,600 psf for the 99-year leasehold 663-unit Principal Garden at Prince Charles Crescent, which is considered by RHB property analyst Ivan Looi to be "a value buy".
Even the apartment units at the 99-year leasehold mixed-use City Gate that was launched last year, are seeing units sold at prices of $1,813 psf and $1,920 psf, based on caveats lodged. The 99-year leasehold mixed-use development at City Gate is a redevelopment of the former commercial building Keypoint and is located in District 7 in the Rest of Central Region.
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This article appeared in the City & Country of Issue 700 (Oct 26, 2015) of The Edge Singapore.
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