Older condominiums still selling at a loss

Despite complaints about ever-rising property prices, some private properties are still valued below their original purchase price.

Shin Min Daily reported that even with the recent boom in the property market, some condominiums which are more than 10 year old are priced about 20 per cent cheaper than newly built ones.

Home buyers in Singapore tend to favour the latest ‘flavour’ on the market, property prices seem to indicate.

Many of these properties were built and bought around 1996, when property prices were also at a peak. Now, 14 years down the road, these properties are still valued at prices below their sale price in 1996,forcing some home owners to sell at a loss.

Property agents told Shin Min Daily for about 20 per cent of the houses that were built in that period, the resale price is still lower than what the owners paid in 1996/7 – even for those near MRT stations and good schools.

Still selling at a loss

One of these under-valued condominiums is Bishan 8 which is located at the junction of Bishan Road and Bishan Street 21.

Attracting long queues of interested buyers when it was launched in1997, units in Bishan 8 were priced at $1,100 per square foot (psf) then.

Last month, one of the units there was sold for $912 psf. For a unit of about 1,162 square feet, the owner would have lost about $220,000.

Another property launched at Stevens Road in May 1997 was selling at$1,900 psf, but in March last year one of the units was sold at $1,620psf.

May recoup investment within five years

PropNex CEO Mr Mohd Ismail said that with new developments being pushed out all the time, home buyers have more than enough choice and many prefer the new apartments.

Ngee Ann Polytechnic real estate lecturer Mr Nicholas Mak felt that buyers may find the older condominiums’ design and facilities outdated.

But Mr Ismail also said that owners of older condominiums may be able to recoup their investment in three to five years.

“As the property market improves, the prices for the older properties will also rise. I believe that the prices will be on par with what they paid within five years,” he said.

As the properties are at prime locations, he believes the owners will eventually be able to make a profit.

Source : AsiaOne – 15 Jul 2010

July 15, 2010

Regent Grove a steal at $665 psf

July 15, 2010

Even though transactions of new home sales have dropped, prices seem to have held up.

For bargain hunters who are looking for properties in the price range of $600 psf, one can consider Choa Chu Kang. Take for instance the 553-unit Regent Grove, a 99-year leasehold condominium located at Choa Chu Kang North 7 (near the Yew Tee MRT station.) It appears to bed rawing home buyers on the lookout for reasonably priced mass market condominiums in the suburbs. From June 8 to 15, there were five transactions at the development at prices ranging from $590 to $665psf, according to caveats lodged with URA Realis.

With its proximity to an MRT station, the current prices at the10-year-old condo developed by Far East Organization are considered attractive to buyers who are planning to buy a home that fits their budget. According to property agent Steven Chen of PropNex,affordability and proximity to the MRT station have been the two key attractions for home buyers at Regent Grove.

In the latest transactions, the highest psf price achieved at Regent Grove was $665 psf on June 9, when a 926 sq ft two-bedroom unit on the11th floor of Block 54 was sold for $616,000. This represents a 14%gain for the seller, who purchased the unit for $541,000 ($584 psf) from the developer in November 1999.

On the 10th floor of the same block, a 1,173 sq ft three-bed room unit was sold for $770,000 ($656 psf) on June 8, providing a 25% gainfor the seller who bought the unit for $617,400 ($526 psf) from thedeveloper in October 2000.

On the seventh floor of the same block, a seller reaped a significant gain of 76% when he sold a 1,259 unit for $748,000 ($594psf) on June 9. The seller bought the unit for $425,000 ($337 psf) in March 2006. Before this, the unit changed hands at a higher price of$638,000 ($507) on the resale market in March 2003.

Another similar-sized unit on the 12th floor at Block 52 was sold for $750,000 ($596 psf), giving a gain of 27% to the seller who purchased the unit for $589,000 ($468 psf) from the developer in August1998.

Meanwhile, the fifth unit that changed hands was a 1,195 sq ft three-bedroom unit on the sixth floor at Block 50, which went for$705,000 ($590 psf). This represents a 34% gain for the seller, who purchased it at $525,000 ($439 psf) from the developer in March 1999.

Regent Grove is one of the few remaining developments in the ChoaChu Kang district where the average asking prices for units are still capped below $650 psf, according to Kelly Yu, marketing director of ERA.

Other condos in the area include North vale and The Warren. At The Warren, which is newer given that it was completed in 2004/05,transaction prices over the last two months were between $648 and $731psf, according to caveats lodged in May to June. Meanwhile, at the12-year-old North vale, transactions over the last two months have been in the range of $560 to $668 psf, according to caveats lodged with URA Realis.

At Mi Casa, a 457-unit Far East Organization project at Choa ChuKang Avenue 3 (located across the street from Lot 1 Shoppers’ Mall ) that was launched late last year, more than 420 units have been sold as at end-May at a median price of $794 psf, according to URA’s monthly new home sales.

According to Citi’s latest research report last Monday, new mass-market condo prices will likely remain strong, given the support of capital gains from existing HDB flats at a seven-year high, and low mortgage rates. Fuelling investment demand for such properties is the rental yield of 4.25% compared with mortgage rates of below 2%. Citi expects prices in the mass market segment to be capped at the $900 to$1,000 psf levels. Hence, investors may be zeroing in on older condos priced in the $600 psf range with immediate rental potential.