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One-North Residences hits $1,399 psf

January 19th, 2012 · No Comments

The one-north area in Singapore property market is  buzzing with so much activity with the opening of the One-North Circle Line MRT station and the current completion of The Rochester, a mixed-use development by United Engineers having 366 apartments including SOHO-style lofts, a 271-room business hotel- cum- serviced suites called Park Avenue Rochester and a 10,000 sq ft mall called Rochester Mall. The 99-year leasehold development is also in close proximity with the Buona Vista MRT station. Retail and entertainment zone VistaXchange is situated  next door. As scheduled to open later this year, VistaXchange has a net lettable area of 164,906 sq ft and is developed by CapitaMalls Asia.

“There’s a lot going on in the area and the newly completed projects such as The Rochester and One- North Residences are definitely bringing a buzz to the neighbourhood as residents move in,” says Kelvin Tan, a property agent from One International Real Estate. While the up-and-coming neighbourhood is seeing increased interest among local buyers, foreign buyers are shying away from making property purchases — largely in reaction to the government’s property cooling measures introduced on Dec 8. The main deterrent is the additional 10% buyer’s stamp duty imposed on foreigners buying residential property. “Foreign and PR investors have been showing very little interest, if any, in the one-north area since the new measures were implemented,” says Alfie Isa, head of residential at Aptitude Real Estate Advisory.

Despite the fact that the residential market has turned quieter, there were still  several transactions in the neighbourhood. At The Rochester, the most latest transaction was the sub-sale of a 1,302 sq ft two-bedroom unit on the 10th level, which changed hands for $1.8 million ($1,382 psf). The seller had acquired it in August 2007 for $1.22 million ($936 psf), making a 47.7% gain.

When The Rochester was launched wayback in July 2007, units were disposed at an average price of $1,300 psf. Another new condominium in the neighborhood, the 405- unit One-North Residences was launched just a few months earlier in March 2007, and the average price then was $900 psf. One-North Residences, developed jointly by UOL Group, Low Kheng Huat and Kheng Leong, was completed in 2009. In December, there were three caveats lodged with URA Realis (as at Jan 4, 2012), and transaction prices varied from $1,351 to $1,460 psf. Moreover, prices are still nowhere near the $1,680 psf achieved for a 2,540 sq ft four-bedroom unit, which changed hands in a sub-sale at the previous peak in August 2007, nor the $1,625 psf achieved when a 1,302 sq ft two-bedroom apartment was sold by the developer at the same time for more than $2.1 million.

The most current transaction was the resale of a 980 sq ft two-bedroom unit for $1.4 million ($1,399 psf). The sellerbought it in May 2007 for $920,000 ($939 psf), after five years, it acquired a 52% gain. On the third level of the same block, a 1,033 sq ft two-bedroom unit changed hands for $1.3 million (1,258 psf). The previous owner had bought it for $873,852 ($846 psf) in September 2007, thus making a 48.8% gain.

Subsequent to the sale, a 1,109 sq ft two-bedroom unit located on the eighth floor was transacted for $1.5 million ($1,375 psf), it’s the third time the unit has changed hands. The first owner bought it for $962,822 ($868 psf) in April 2007, when the project was launched. After barely two months, he sold the unit  for $1.12 million ($1,008 psf), a price appreciation of 16%.

Aptitude’s Isa declares that the average asking price for One-North Residences is $1,400 psf now, whereas it varies from $1,350 to $1,500 psf at The Rochester.

Before the introduction of the government’s cooling measures, many foreigners working at the Biopolis biomedical hub and at Fusionopolis, the infocommunication technology, media and physical sciences and engineering hub, at one-north had an interest in acquiring units at One-North Residences. “They were mainly looking to buy for their own use, and therefore preferred new apartments,” says Nicole Lim, senior team director at ERA Realty. “However, almost all units put up for sale at One-North Residences are already tenanted.”

At One-North Residences, two-bedroom apartments had a rental rates of about $5,000 a month. At The Rochester, two-bedroom apartments of the same  size fetch about $500 more, notes Lim. Generally, investors at both One-North Residences and The Rochester are looking at rental yields of 3%, she estimates. “While there’s still interest, it’s a little quieter now,” she adds.

With new condos such as One-North Residences and The Rochester fetching $1,200 to $1,500 psf, there are some investors who divert their attention on older condos in the premises, where prices are still hovering around the $1,000 psf range. Based on the lower quantum prices, the rental yields for such condo units in developments such as Normanton Park and Dover Parkview tend to vary from 3.5% to 4%.

At the 686-unit, 99-year leasehold Dover Parkview,  completed 15 years ago, the latest transaction was for a 936 sq ft two-bedroom apartment that was sold for $980,000 ($1,046 psf). Again, this is the third time the unit has changed hands. The first owner had purchased it for $700,000 ($747 psf) in October 1996 and subsequently sold it in June 2009 for $690,000 ($737 psf). The most recent transaction of $1,046 psf is one of the highest prices achieved in the condo so far. The highest average price achieved at Dover Parkview was last September, when a 936 sq ft unit changed hands for $1 million ($1,068 psf).

Again, at Dover Parkview, a 969 sq ft two-bedroom apartment was sold for $904,500 ($934 psf) in December. The old owner had paid $632,000 ($652 psf) for the unit in April 1996. One International’s Tan, who brokered the sale of a unit at Dover Parkview recently, says most buyers are not midful of older condos in locations such as Dover Rise, for this units are  spacious and the absolute prices of about $1 million are also more appetizing as  those at newer condos. “These older condos represent value,” he says. “Investors who want space but do not wish to overstretch their budgets are more inclined to buy units in older condos.”

Another condo that is also preferred by investors is the 35-year-old Normanton Park. The 99-year leasehold condo is situated off Ayer Rajah Expressway and close to the Science Park. According to the caveats lodged with URA Realis, the latest  transaction documented was the sale of a 1,270 sq ft unit on the sixth level for $1.3 million ($992 psf). The seller, who purchased it for $500,000 ($394 psf) in September of  1999, saw the price 3 times more in just over a decade.

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