City Square Residences hit $1,500 psf

A condominium that saw a spike in transactions in the first week of August was the 910-unit freehold City Square Residences, completed early last year. Located along Kitchener Road, it’s right next door to the newly opened City Square Mall and the Farrer Park MRT station. Across the street is the 24-hour Mustafa Centre, a popular shopping mall with locals and tourists.

City Square Residences comprises three 30-storey tower blocks and three 28-storey blocks. It was developed by City Developments Ltd (CDL), which is also the developer of City Square Mall, with over 700,000 sq ft of retail space. At City Square Residences’ soft launch in April 2005, units were sold at an average of $500 to $600 psf, according to caveats lodged with URA Realis. The project was fully sold within a few months.

Resale prices have crossed $1,000 psf since February this year when the mall opened. Today, owners of two-bedroom apartments are asking for $1,350 to $1,500 psf in the secondary market, while three-bedroom units are going for $1,200 to $1,350 psf, says ERA marketing agent Doris Tey, who specialises in City Square Residences.

From Aug 3 to 10, four units at City Square Residences changed hands at prices ranging from $1,190 to $1,340 psf. Most recently, a 1,216 sq ft unit on the 18th floor of Block 6 went for $1.45 million ($1,190 psf). The seller made a hefty gain of 85%, as he had purchased the unit for $780,560 ($642 psf) from the developer when the project was first launched in May 2005.

At Block 8, a seller saw a 68% appreciation in the price of his 872 sq ft two-bedroom unit, having purchased it in August 2006 for $679,000, or $779 psf, and sold it recently for $1.14 million ($1,311 psf).

Another owner of a similar-sized unit on the 15th floor of Block 10 sold it for $1.17 million ($1,340 psf), or 46% higher than his purchase price of $802,000 ($920 psf) in May 2009. The previous owner had purchased the apartment from the developer five years earlier and paid $513,040 (or $588 psf), hence enjoying a 56% price gain.

Meanwhile, an 840 sq ft two-bedroom unit on the second floor went for $1.03 million ($1,227 psf), which translates into a whopping 75% gain for the owner, who had purchased it from the developer for $587,840 ($700 psf) in July 2005.

“Two- and three-bedroom units are the more popular with buyers, whether for occupation or for investment,” says Tey. Buyers in the resale market are mainly foreigners, with the majority coming from Indonesia, India, Bangladesh and China, she notes. She has sold seven units in the development this month alone and only two of the purchasers were Singaporeans. Of the seven apartments that changed hands, four were threebedroom units and three were two-bedroom units, she adds.

Based on current transaction prices, the rental yield works out to 3.5% to 4.5% per annum, says Tey. Owners could rent out the studio units of 570 to 592 sq ft for at least $3,000 a month, she adds, while four-bedroom units could fetch monthly rental rates of $5,500 to $6,500. The latest asking rents for two-bedroom apartments are $4,000 to $4,200, while three-bedroom units are going for $4,500 to $4,800, notes Tey.

It looks like the prices and rental rates of condos on the city fringes and in the CBD are holding up for now.

Source : The Edge – 30 Aug 2010

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