Older condominiums still selling at a loss

Older condominiums still selling at a loss

Despite complaints about ever-rising property prices, some private properties are still valued below their original purchase price.
Shin Min Daily reported that even with the recent boom in the property market, some condominiums which are more than 10 year old are priced about 20 per cent cheaper than newly built ones.
Home buyers in Singapore tend to favour the latest ‘flavour’ on the market, property prices seem to indicate.
Many of these properties were built and bought around 1996, when property prices were also at a peak. Now, 14 years down the road, these properties are still valued at prices below their sale price in 1996, forcing some home owners to sell at a loss.
Property agents told Shin Min Daily for about 20 per cent of the houses that were built in that period, the resale price is still lower than what the owners paid in 1996/7 – even for those near MRT stations and good schools.

Still selling at a loss
One of these under-valued condominiums is Bishan 8 which is located at the junction of Bishan Road and Bishan Street 21.
Attracting long queues of interested buyers when it was launched in 1997, units in Bishan 8 were priced at $1,100 per square foot (psf) then.
Last month, one of the units there was sold for $912 psf. For a unit of about 1,162 square feet, the owner would have lost about $220,000.
Another property launched at Stevens Road in May 1997 was selling at $1,900 psf, but in March last year one of the units was sold at $1,620 psf.

May recoup investment within five years
PropNex CEO Mr Mohd Ismail said that with new developments being pushed out all the time, home buyers have more than enough choice and many prefer the new apartments.
Ngee Ann Polytechnic real estate lecturer Mr Nicholas Mak felt that buyers may find the older condominiums’ design and facilities outdated.
But Mr Ismail also said that owners of older condominiums may be able to recoup their investment in three to five years.
“As the property market improves, the prices for the older properties will also rise. I believe that the prices will be on par with what they paid within five years,” he said.
As the properties are at prime locations, he believes the owners will eventually be able to make a profit.
Source : AsiaOne – 15 Jul 2010