Is it a Good Deal?: $1.38 million for a freehold studio with a private lift in District 9

By Elizabeth Choong

/ EdgeProp Singapore |

July 10, 2024 11:54 AM SGT

Despite its prime location and freehold tenure, The Laurels has more unprofitable than profitable transactions. (Photo: EdgeProp Singapore)

SINGAPORE (EDGEPROP) – Last month, a studio unit in The Laurels was sold for $1.38 million ($2,514 psf), resulting in a loss of approximately $147,000. The seller had purchased the 549-sq ft unit in March 2010 for $2,781 psf.

At the time of writing, the freehold development had 57 unprofitable transactions with losses ranging from approximately $2,000 to $928,000. Profits from its 27 profitable transactions range from approximately $4,000 to $1 million.

We used our analytics tool, "Is it a Good Deal?", to determine whether the buyer of the aforementioned unit in The Laurels secured a bargain.

A short walk to Orchard

The Laurels is a freehold development located along Cairnhill Road in prime District 9 (see Map 1). The condo obtained its temporary occupation permit (TOP) in 2013. The 229-unit development comprises a variety of unit types that include one-bedroom units to penthouses, ranging in size from 549 sq ft to 4,833 sq ft.

As the condo is located just outside the main shopping and hotel belt of Orchard Road, there are numerous malls and hotels within walking distance. These include York Hotel, Grand Hyatt Singapore, Singapore Marriott Tang Plaza Hotel, Hilton Singapore Orchard, Far East Plaza, Scotts Square, The Paragon, Lucky Plaza, Tang Plaza, The Heeren, 313 Somerset, and Ngee Ann City.

Other amenities within a 1 km radius include Orchard, Somerset, and Newton MRT Stations as well as Anglo-Chinese School (Junior) and St. Margaret’s School (Primary). St. Margaret’s School (Primary) is currently located at a temporary site along Mattar Road. The popular primary school will move back to its permanent location along Sophia Road at the end of this year.

Seems to be a good deal for the buyer

Our "Is it a Good Deal?" analytics tool indicates that the transacted price is below its valuation price as well as the average prices for The Laurels and four neighbouring developments (based on transactions in the past 12 months).

Source: EdgeProp Is it a Good Deal (as at 9 July 2024)

The Laurels has more unprofitable transactions than profitable ones

At the time of writing, there were three unprofitable transactions and only one profitable transaction that took place for The Laurels this year. The three unprofitable transactions that took place this year yielded losses ranging from approximately $56,000 to $790,000 (see Table 1). Interestingly, two of the three transactions involve units that are located adjacent to each other and were sold in the same month.

The unit that resulted in a loss of approximately $147,000 is a studio unit with a private lift and a balcony (see Floor Plan 1). The unit is regularly shaped, making it easy for residents to arrange their furniture. The sizable balcony can be used as a dining area if the resident wants a more spacious living area.

Those who value privacy will appreciate the private lift and lift lobby, especially since the unit does not have any walls separating the bedroom from the living and dining areas. However, some residents might not mind trading some privacy for more usable space. Furthermore, the resident can install sliding doors to separate the bedroom from the rest of the unit.

Source: EdgeProp Research

The neighbouring unit that generated a loss of $56,000 is a three-bedroom unit that measures 1,302 sq ft. Similar to the two units mentioned above, this unit also features a private lift and a sizable balcony (see Floor Plan 2). The seller bought the fourth-storey unit in April 2010 for $2,807 psf and sold it last month for $2,764 psf.

Source: EdgeProp Research

The lone profitable transaction took place in May and featured a two-bedroom-plus-study unit (see Floor Plan 3). The seller sold the second-storey unit for $2,627 psf after purchasing it in July 2019 for $2,278 psf, resulting in a profit of approximately $350,000. Interestingly, the unit that generated the lone profitable transaction thus far this year also generated a loss of approximately $670,000 when the previous owner sold it in July 2019 after purchasing it for $2,947 psf in May 2011.

The 1,001-sq ft unit has a private lift and a balcony that spans the entire width of the living and dining areas. Residents who want a larger living area could use the sizable balcony as their dining area. The unit also has a small study room that could be used for storage or as a helper’s room.

Source: EdgeProp Research

Numerous freehold neighbours

Buyers searching for freehold condos near The Laurels have plenty of options. However, many of the developments have had less than five transactions in the past 12 months. The resale market for The Laurels is the most active, with nine transactions in the past 12 months, followed by Waterscape at Cavenagh and Hilltops with eight and seven transactions, respectively (see Screenshot 2).

However, Urban Suites and The Vermont on Cairnhill are the closest in age, having obtained their temporary occupation permit (TOP) in 2013, the same year The Laurels obtained its TOP. Furthermore, Urban Suites is located along Hullet Road, which is a short walk away from The Laurels (see Map 1).

Source: EdgeProp Is it a Good Deal (as at 9 July 2024)

Despite sharing many similarities, Urban Suites proved to be more profitable than The Laurels, with 40 profitable and nine unprofitable transactions. It is notable that Urban Suites has achieved two profitable transactions thus far this year (see Table 2), and its most recent unprofitable transaction took place in 2021.

Lower average price than neighbour

The average resale price for The Laurels has trended below that of Urban Suites since 2021. At the time of writing, this year’s average resale price for The Laurels is $2,507 psf, lower than the average price of $2,742 psf for Urban Suites (see Chart 1). However, both condos have average resale prices that are higher than that of freehold condos in District 9 ($2,311 psf).

Since 2021, the average resale prices for The Laurels and Urban Suites have dipped by 2.6% and 0.8%, respectively. In contrast, the average resale price for freehold condos in District 9 increased by 1.9% over the same timeframe. The smaller price decline and higher average resale price for Urban Suites could have contributed to its stronger profitability compared to The Laurels.

Source: EdgeProp Market Trends (9 July 2024)

Despite The Laurels having more unprofitable transactions than Urban Suites, it still remains popular with buyers, chalking up five resale transactions thus far this year compared to only two resale transactions for Urban Suites (see Chart 2). Last year, eight units in The Laurels were sold, while only one unit in Urban Suites was sold.

Source: EdgeProp Market Trends (9 July 2024)

Conclusion

The Laurels has more unprofitable transactions compared to the neighbouring Urban Suites, but that did not deter buyers' demand for The Laurels. The number of resale transactions for The Laurels far exceeds that for Urban Suites, which could be attributed to its lower average price compared to Urban Suites.

The buyer of the 549-sq ft studio unit paid $2,514 psf, which is slightly higher than the average resale prices of $2,507 psf and $2,311 psf (based on resale transactions for this year) for The Laurels and freehold condos in District 9, respectively. Furthermore, the average resale price for The Laurels has declined slightly in recent years, while the average price for freehold condos in the same district continues to rise. However, The Laurels is still expected to be on the radar of buyers who seek freehold properties in a prime location.

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

Check out the latest listings for The Laurels, Urban Suites properties

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