One year later, a resale apartment at Reflections at Keppel Bay sells for more than S$6.6 million more

Nov 02, 2022

The vendor of a 7,050 square foot (sq ft), 40th floor apartment at the 99-year leasehold Reflections at Keppel Bay sold the property for an additional S$6.6 million in less than a year, making the transaction the greatest profit-maker by quantum in the secondary market in the third quarter of this year.

However, according to Cushman & Wakefield data, the seller would have to pay seller's stamp duty (SSD), implying that the actual profit is lower, because the unit was purchased for S$11 million (S$1,560 psf) on September 10, 2021 and sold for nearly S$17.63 million (S$2,500 psf) on September 12, this year. SSD is normally 12% for properties owned for less than a year, and 8% for properties held for more than a year but less than two years.

Still, the annualised profit for the top-floor unit is nothing to sneeze at at 60% (before to transaction fees such as SSD).

Cushman & Wakefield investigated caveats for private, non-landed homes with a prior purchase history that were traded in Q3 2022 between January 2012 and September 2022. It then ranked the top five profit-making and loss-making deals in terms of both percentage and dollar amount. The analysis excluded transaction costs and taxes such as buyer's stamp duty and SSD.

Meanwhile, the largest profit-maker (by percentage) in Q3 was a 2,723 sq ft, second-floor flat at the freehold Jade Mansion on Leedon Road in district 10, which sold for S$5.08 million (S$1,865 psf) in September - 75%, or S$2.18 million, more than the seller paid for it.

Given the initial purchase price of S$2.9 million (S$1,065 psf) in March 2018 and a holding duration of around four and a half years, the annualised profit came to 13%.

"Notably, this is the first time in 2022 - based on our analysis period - that a property in the Core Central Region (CCR) has emerged in the top five deals in terms of percentage profit," said Wong Xian Yang, head of research at Cushman & Wakefield. This shows that there may be chances to unlock value inside the CCR market, particularly when the pricing difference between CCR and other market segments, the Rest of Central Region (RCR) and Outside Central Region (OCR), narrows."



In terms of loss-making transactions, a 60th floor unit at the 99-year-leasehold Marina Bay Suites emerged as the largest loss-making transaction in Q3 in terms of both dollar amount and percentage. The 2,691 sq ft unit in district 1 was purchased for S$8.25 million (S$3,066 psf) in December 2013 and sold for S$5 million (S$1,858 psf) in August this year, representing a 39% loss, or S$3.25 million. The annualised loss was 5.6% based on a holding period of somewhat more than eight and a half years.

The CCR and RCR accounted for the lion's share of the loss-making transactions in Q3. "The majority of them were purchased in 2012 and 2013, during the top of the market," Wong noted.



In addition, Cushman & Wakefield studied the share of loss-making deals (in both the landed and non-landed divisions), which fell from 6.4 percent in Q2 2022 to 5.3 percent in Q3 2022 as the residential property market remained strong.

"Rising headwinds from the high interest rate environment, as well as newly implemented cooling measures, may exert upward pressure on the proportion of loss-making agreements," Wong said.

Nonetheless, he anticipates the share of loss-making acquisitions to stay relatively low in 2022 as a whole, owing to the tight labour market, which should continue to boost owners' holding power.