The Ritz-Carlton Residences S$16.5m deal tops in gains in Q1

The sale of an 3,057-square-foot unit at The Ritz-Carlton Residences Singapore Cairnhill in the first quarter 2024 was the most lucrative resale in absolute terms, earning the seller S$4.9million.

Cushman & Wakefield’s real estate consultancy crunched the data for The Business Times in January. The 33rd floor apartment at the freehold luxurious development in district 9 sold for S$16.5million or S$5,397 a square foot. BT previously reported that it was the first time since June 2023 prices in the premium residential market exceeded S$5,000 psf.

The seller gained S$4.9m, or 42 % over the S$11.6m initial purchase price (3,795 S$ psf).

Based on a period of holding of almost eight years, the seller achieved an annualised gain of 4.5 percent.

The data also showed the five highest-profiting transactions, quantitatively, in Q1 were all in Singapore’s Core Central Region. This is due to the fact that prices in the CCR are higher and the transacted unit size is larger.

He said that of the five, freehold properties tend to command premiums.

Q1 data revealed that prime properties accounted for the majority of the worst performers in the quarter. The biggest losers in Q1 were prime properties. They lost between SS$381,000 & S$983,555 on resale. These units have been purchased during different phases of the cycle.

Loss-making CCR transactions topped the list in both of the previous quarters. Losses in Q4 of 2023 ranged from S$281,000 up to S$2,39 million and in Q3 from S$267,000-S$700,000.

In Q1, the unit that caused the most damage, in both terms of quantity and percentage, at Robinson Suites was a 936 square foot freehold condo in District 1. It was purchased for S$1.8million or S$1,922psf. It was sold at a price 35 per cent less than its original S$2.78million (S$2,972psf) May 2013 purchase price. According to a 10 year holding period, the annualised loss is 4 per cent.

The Q1 results showed that executive condominiums (EC) were the most profitable transactions in terms of percentage gains. This trend was also evident in Q1 2020.

Treasure Crest EC had the most profitable resale sales, with units selling for between S$716,000 – S$921,000.

The five 99 years leasehold properties in Sengkang (District 19) were held in average for eight to nine years before being sold with an attractively high return of 98 percent to 106 percent.

In January, a 1,249-square-foot Treasure Crest unit sold for S$1.79million or S$1,434psf. This was 106 percent higher than the original price, which was S$869,000 in July 2016 (S$696/sq ft). After 7.5-years of holding, the annualised gain was 10.2 percent.

Four out of five units that accounted for the highest percentage gains, excluding ECs (Extra Central Region), were located in suburban Outside Central Regions (OCR). The best deal in terms of percentage profit was for an apartment located on the edge of the city, or Rest of Central Region.

The 1,346 sq.ft. apartment in Eastwind Mansions in District 15 along Joo Chiat Terrace was sold slightly above S$2 Million (S$1,487 per sq.ft.) in March. The seller realized S$900.888, or 82 percent over its original S$1.1million (S$818 per sqft) price in April 2017 – a profit of S$900.888. This is equivalent to a 9.1 percent annualised return based on the holding period of 6 years.

Cushman & Wakefield studied caveats in its study for private non-landed homes transacted between Q1 2024 and January 2012 with a purchase history from March 2024. The analysis excluded taxes and transaction costs, including buyer stamp tax and seller stamp tax.

In the first quarter, according to caveats data on private homes landed or non-landed, prime CCR-properties accounted 55 per cent for loss-making sales. RCR and OCR both accounted 36% of the deals.

Although the CCR was responsible for a larger number of deals that were loss-making, the vast majority – 84% – of CCR sales were profitable.

The percentage of non-landed deals and landed deals with losses – 2.8% in Q1- has remained low, due to strong property owner holding power and local demand. This was supported by the low unemployment rates, and strong household finances.

Although the affordability of buyers is still low and buyer opposition is expected grow due to high interest rate and housing prices, overall loss-making transactions are predicted to remain low.

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