Seller of Boulevard 88 luxury condo makes $3.5m profit after 3 years, topping Q4 resale gains

SINGAPORE – A 2,799 square feet unit at Boulevard 88, along Orchard Boulevard, was sold for $13.78 million, or $4,924 per square foot (psf), last month for a cool $3.46 million in profit. It was the most profitable private home resale by quantum in the fourth quarter of 2022.

The 22nd-floor unit at the freehold luxury condo in prime District 10 was bought for $10.32 million, or $3,688 psf, back in July 2019. Based on a holding period of just under 3½ years, the annualised profit works out to 9 per cent.

This nugget came from data crunched for The Business Times by real estate consultancy Cushman & Wakefield, which studied caveats for non-landed private homes with a prior purchase history between January 2012 and December 2022, and transacted in the fourth quarter of 2022.

Cushman & Wakefield then ranked these caveats into the top five profit- and loss-making deals, both by percentage and by quantum. The analysis excluded the transaction costs and taxes, such as buyer stamp duty and seller stamp duty.

The data also showed that the five biggest money-making transactions by quantum were all in the core central region (CCR); four of them were freehold units. This is mainly by virtue of the relatively higher prices in the CCR, said Cushman & Wakefield research head Wong Xian Yang.

The fourth quarter’s top five profit-making deals by percentage were located in the outside central region and CCR, with sellers raking in profits ranging from 69 per cent to 189 per cent.

The most profitable deal by percentage was for a 1,281 sq ft unit at the freehold Veranda in Telok Kurau in District 15. It was sold for $1.88 million, or $1,468 psf, in November; it was purchased for $650,000, or $507 psf, in January 2014. This works out to a profit of 189 per cent or an annualised profit of 12.8 per cent, based on the holding period of nearly nine years.

Among the five deals, two were located in the prime CCR, noted Mr Wong. In previous quarters, most of these deals were located either in the suburbs or rest of central region.

“With a narrowing price gap between the CCR and other market segments, the value proposition of CCR properties has increased and there could be opportunities to unlock value in the CCR,” he said.

The largest loss-making resale deal by percentage, on the other hand, was for a 657 sq ft unit at 103-year leasehold condo development The Scotts Towers in District 9. It was sold for $1.3 million, or $1,980 psf, in October – 41 per cent lower than the $2.2 million, or $3,351 psf, paid for the property in April 2013. Based on the holding period of 9½ years, the seller suffered annual losses of 5.4 per cent.

By quantum, the top loss-making deal was for a 2,260 sq ft unit at freehold 3 Orchard By-The-Park in District 10. It was sold for $6.56 million, or $2,901 psf, in October – 20 per cent less than the $8.18 million that the seller paid in July 2019. This translates to an annualised loss of 6.5 per cent over some three years.

Mr Wong noted that most of these purchases, like the deal at The Scotts Towers, were made during the market upturn in 2012 and 2013. This was before the market cooled off in late 2013, when the Government rolled out the total debt servicing ratio framework to prevent buyers from over-leveraging.

Cushman & Wakefield also found that the proportion of loss-making resale transactions (landed and non-landed) rose marginally to 4.6 per cent in the fourth quarter of 2022 from 4.5 per cent in the previous quarter.

This came on the back of rising headwinds, such as surging interest rates, and September’s cooling measures, noted Mr Wong.

Still, the proportion of loss-making transactions remains significantly lower than in the year-ago period, which stood at 8.2 per cent.

For the coming year, Mr Wong expects the proportion of loss-making deals to remain relatively low, especially as “owners’ holding power remains strong, given a tight employment market and robust rental market”.

THE BUSINESS TIMES