Potential beachhead in a falling market?

[reporter2]

http://www.straitstimes.com/archive/...arket-20150110

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Potential beachhead in a falling market?

Published on Jan 10, 2015 1:49 AM

By Felicia Lee


CONDOS for around $600,000 are rare enough, and finding one in the inner city is a real stretch. But it seems it can be done.

A one-bedroom unit, with a view of the city skyline, on the 25th storey of The Plaza in Bugis has been put on the market.

While not in a new building, The Plaza has a central location and remains one of the few residential blocks in a sea of serviced apartments.

The 678 sq ft unit (almost equivalent to a new two-bedder these days) is within a 10-minute walk of Suntec Convention Centre and a few minutes away from Nicoll Highway and Bugis MRT stations as well as the bustling Bugis shopping strip.

Ms Jean Calalang, a property consultant at Knight Frank, said rent is about $2,800 a month, giving an annualised rental yield of between 5.2 per cent and 5.6 per cent.

R'ST Research director Ong Kah Seng noted that the gross rental yield in the Bugis region is about 4 per cent while it was about 3.7 per cent nationally as at the last quarter of 2014.

Mr Ong said said that despite "the island-wide weakened leasing conditions over the past year, The Plaza remains resilient due to the strong demand for fewer- frills properties in the locality, which translates to cost-effectiveness".

He said that while buyers tend to favour "99-year leasehold resale properties that are at least seven years of age but not more than 20 years", due to cost concerns, the one-bedder on sale has just 53 years left on its lease.

Mr Ong added that a buyer could earn up to 3 per cent net profit by reselling the unit in five years' time - and so avoiding the seller's stamp duty - thanks to the attractive rental yield and prime location.

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[jwong71]

Cpf can use around 79k, or certain %. And your monthly installments to be paid in cash only, no cpf.
It was put up for 700k, and loan for 23yrs. Your potential buyer, after the 5yrs mop. Loan years just 18yrs left.

It's a zero chance for 800k-850k, for that 100-150k profits. With little buyers to meet such short term loan lease and cold hard cash.

[teddybear]

Typical marketing of unit with the help of newspapers after finding difficulty to find buyer....................
Most people not carrot-head, like those buying JGateway at >$1700 psf...................................

Cpf can use around 79k, or certain %. And your monthly installments to be paid in cash only, no cpf.
It was put up for 700k, and loan for 23yrs. Your potential buyer, after the 5yrs mop. Loan years just 18yrs left.

It's a zero chance for 800k-850k, for that 100-150k profits. With little buyers to meet such short term loan lease and cold hard cash.