Balestier unit fetches S$3.5m profit in October sale; Sentosa apartment records S$6.2m loss

Biggest-losing sales by percentage saw losses of 40% or more; were 99-year leasehold; four units were in District 4

Mon, Nov 30, 2020

NISHA RAMCHANDANI


A 5,253 square foot (sq ft) unit at freehold development Rajah Towers was sold for S$4.5 million last month - more than four times the purchase price of S$960,000 - earning the seller a handsome profit.

In addition to racking up the highest gain by percentage, the transaction was also among the top three in October by quantum.

The deal was among the five most profitable transactions in October in the secondary market, according to data from Edmund Tie Research, which studied caveats for non-landed private homes with a prior purchase history and ranked the top profit- and loss-making deals. These were ranked both by percentage and by quantum.

For the top five profitable transactions by percentage, all the sellers enjoyed a trebling of capital values or more. Four of these five were freehold properties.

At a profit of nearly 370 per cent, the property sold at Rajah Towers in Jalan Rajah was the biggest profit-making transaction by percentage.

The unit on the 26th floor was purchased at S$960,000 (S$183 psf) in September 2005 and sold at S$4.5 million, or S$857 psf, on Oct 27.

Based on the holding period of slightly over 15 years, this works out to an annualised profit of 10.8 per cent for the seller. Meanwhile, data showed that the seller's recorded address was a HDB at the time of purchase, suggesting the seller was a HDB upgrader.

The freehold development, in District 12, was completed in 1983 and is within walking distance from Toa Payoh MRT station and Balestier Plaza.

Going by quantum, the top five most profitable transactions in October locked in gains of between S$2.72 million and S$4.85 million, with all showing holding periods of about 15 years and above. Four of the five properties were located in the Core Central Region (CCR).

Edmund Tie & Company's senior director of research and consulting, Lam Chern Woon, said: "The tenure were all freehold, allowing the assets to appreciate robustly over long holding periods. Two projects, Rajah Towers and Grange Heights, had transactions that made the top five profitable list in October by percentage and quantum."

The biggest gain by quantum last month was made by the seller of a unit on the fifteenth floor at The Claymore in Claymore Road.

The 3,348 sq ft unit transacted for S$8.7 million (S$2,599 psf) but was purchased for S$3.85 million (S$1,150 psf) back in March 1999, clocking a profit of S$4.85 million. Based on the holding period of 21.6 years, the annualised profit works out to 3.8 per cent.

The freehold condominium, in District 9, was completed in 1985 and is a short walk to Orchard MRT station.

Turning to the biggest loss-making transactions by percentage in October, the leading five transactions had certain things in common: all racked up losses of about 40 per cent or more. All of them were also 99-year leasehold properties.

Interestingly, four of the five units were in District 4 - one each at The Coast at Sentosa Cove and Turquoise on Sentosa, while the other two units were at Reflections at Keppel Bay.

The top loss-making transaction by percentage was a 4,779 sq ft unit at The Coast at Sentosa Cove. Completed in 2009, the 249-unit condominium is on Ocean Drive on Sentosa.

The eighth floor unit racked up a loss of nearly 54 per cent as it changed hands for S$5.3 million (S$1,109 psf) on Oct 7, less than half of the S$11.47 million (S$2,400 psf) that it was purchased for in August 2007 before the Global Financial Crisis hit.

At a hefty near-S$6.2 million loss, the unit also posted the biggest loss in October when ranked by quantum.

The 99-year leasehold property was held for 13.2 years, which resulted in an annualised loss of 5.7 per cent. The vendor's address at the time of purchase was listed as a HDB.

Of the five leading loss-making transactions by quantum, four of them had a 99-year leasehold tenure.

Mr Lam said: "Their leasehold tenure coupled with the unfavourable purchase timing - all bought during 2007 - undoubtedly weighed on the eventual profitability, or lack thereof."

A unit on the 27th floor of The Sail @ Marina Bay in District 1 was the second biggest loss-maker in October by quantum.

Sold at S$3.5 million (S$1,777 psf), the 1,970 sq ft unit at the 99-year leasehold development in Marina Boulevard went for S$2.3 million less than the purchase price of S$5.81 million (S$2,950 psf) back in Oct 2007. The holding period was 13 years, translating to an annualised loss of 3.8 per cent.

The 99-year leasehold condominium, which has 1,111 units, was completed in 2008.