The price of a Four Seasons Park property almost doubles in less than four years; the

The price of a Four Seasons Park property almost doubles in less than four years; the top Q3 sales profit is S$3.8 million

Because of strong demand and pricing, the percentage of resale transactions that result in a loss is nevertheless gradually declining.

October 23, 2024

CONDOsingapore.com

The seller made a cool S$3.8 million from the sale of a 2,260-square-foot (sq ft) property at Four Seasons Park in August, making it the most lucrative transaction by quantity in the third quarter of 2024.

Back in September 2020, the 20th-floor apartment at the freehold luxury condo in the exclusive District 10—just a short distance from the Orchard Road retail belt—was purchased for about half that amount, at S$4 million, or S$1,770 per square foot (psf). Cushman & Wakefield, a real estate firm, analysed the statistics for this.

According to Wong Xian Yang, research head at Cushman & Wakefield, the flat sold for S$3,451 psf in August, setting a new standard for psf at the Four Seasons Park complex.

The annualised profit comes to 18.5% with a holding duration of less than four years. The seller's gross gain, which was around 95%, was far more than the 34% increase in the private residential price index as a whole over the same time period.

Three freehold homes from the prestigious Core Central Region (CCR), one from the city edge or Rest of Central Region (RCR), and one from the suburban Outside Central Region (OCR) comprised four of the five most money-making deals by quantum in Q3.

Wong pointed out that freehold houses often fetch a higher price.

Following a pattern that began in Q1 2023, executive condominium (EC) deals were once again the most lucrative in Q3 in terms of percentage gains.

The top gainers were held for an average of around nine years before being sold for a "attractivly high profit" by percentage, according to Wong, with profits ranging from 105% to 110%.

A 915 square foot apartment at the 99-year leasehold Twin Waterfalls EC in Punggol, District 19, topped the list. It sold in August for S$1.3 million, or S$1,454 per square foot. This was a 110 percent increase over the unit's July 2012 initial price of S$632,100 (S$691 psf). With a holding duration of more than 12 years, the annualised profit came to 6.3%.

Three of the top five percentage gainers, excluding ECs, were for OCR units, while one each came from the RCR and CCR. The freehold Four Seasons Park apartment in the CCR was the most lucrative transaction in terms of percentage.

A 2,067 square foot apartment at the 99-year leasehold Marina Bay Suites in District 1 was the purchase that, in terms of both quantity and percentage, spilt the most red ink in Q3. In July, it sold for S$3.5 million, or S$1,694 per square foot. Compared to its initial price of S$5.3 million (S$2,553 psf) in October 2012, this was 34% less.

This corresponds to 3.4 percent annualised losses over an 11.8-year holding period.

Wong noted that all of the largest losers in Q3 were bought at different points in the market cycle and were situated in the CCR. With the exception of one, almost all were 99-year leasehold holdings.

Caveats for non-landed private residences that were purchased in Q3 2024 and had a previous purchase history between January 2012 and September 2024 were the focus of Cushman & Wakefield's investigation. Transaction fees and taxes, including buyer and seller stamp duties, were not included in the research.

Overall, according to caveat data of landed and non-landed private residences, 54% of loss-making transactions in the third quarter of this year were premium CCR properties. Of these transactions, 24% were made by the RCR and 23% by the OCR.

Wong observed that the bulk of sales (86%) were lucrative, despite the fact that the CCR was responsible for the majority of agreements that resulted in losses.

Additionally, the percentage of agreements that resulted in losses in both the landed and non-landed sectors decreased somewhat from 2.6% in Q2 and 2.7% in Q1 to 2.5% in Q3.

Wong blamed the ongoing decline on stable private home prices, which are predicted to increase by 1% to 4% globally in 2024. He attributed this to healthy household balance sheets, persistent upgrading demand for private dwellings, and still-low unemployment rates.

He believes that although sellers' holding power will continue to be strong due to rising replacement costs, buyer affordability may somewhat improve as interest rates progressively reduce over time.

According to Wong, "the overall levels of loss-making deals are expected to remain low, barring new cooling measures and unforeseen economic shocks."

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