Is the Yong An Park Unit Worth its 12.5 Million Price Tag: the Most Profitable Deal in Singapore's Q3 2021 Resale Market

The non-landed private home market continues to perform strongly, with prices rising for the sixth consecutive quarter, according to the PropertyGuru Singapore Property Market Index Q4 2021.

The most profitable deal for the Q3 2021 resale market was a penthouse unit at Yong An Park, a freehold condo in the River Valley area.

The seller of the 6,577 sq ft unit on the 25th floor originally bought it for $3.8 million ($578 psf) in May 2000 and sold it for $12.5 million ($1,901 psf) on 3 September 2021, making $8.7 million. That works out to a profit of 229%, or an annualised profit of 6% over 21 years.

To find out more about this record-breaking transaction, we spoke to 29-year-old Phua Ti Jun Edwin, Senior Marketing Director at ERA Singapore, who brokered the deal.

Yong An Park is located on River Valley Road in District 9, a prime area. The freehold property was constructed in 1986 and the project consists of 288 units.

According to Mr Phua, the record-breaking penthouse unit was placed on the market for about two months before being snapped up. Due to the pandemic, only four physical viewings were conducted. However, many more prospective buyers opted for a virtual viewing of the property.

In the end, the seller received two offers, and a price was decided upon without a bidding war. The buyer based his or her decision on price and feng shui.

The property’s success can be attributed to the following factors:

Browse all Yong An Park units for sale on PropertyGuru.

The 6,577 sq ft duplex penthouse unit consists of five bedrooms, four bathrooms, one powder room and a 6m loft space. It also has two living room or lounge areas and a roof terrace on the second floor.

Developers are moving towards building smaller units these days, while the demand for larger flats has risen due to the rise of work-from-home arrangements, making such large units highly sought after.

“The flat could fetch such a high price as the supply for such large properties is diminishing. For entry-level penthouses or units of a similar size in the same district, you are usually looking at $18 million and above,” said Mr Phua.

“The prime location was a huge factor (influencing the price), with the upcoming Great World MRT station approximately 400m away. The unit is a short five minutes’ drive to the Orchard shopping belt and the park connectors around the area,” said Mr Phua.

“There is also UE Square, Great World City and Robertson Quay, so everything one would need is within 500m.”

Freehold status can be a draw from some buyers. In the case of Yong An Park, which is already 35 years old, its value in 2021 is much higher than it would have been as a freehold property with only 65 years left on its lease.

According to Mr Phua, the rarity of the penthouse unit could have been one factor contributing to its high price.

Penthouse units offer scenic, unblocked views. The high ceiling and loft spaces of the Yong An Park unit also give the unit a spacious and luxurious appearance. In addition, the living room features glass windows running up to the ceiling, allowing in plenty of natural light.

The unit is located on the top floor of a 25-storey block.

“Generally, there will be a difference in prices between floor level,” said Mr Phua.

The COVID-19 pandemic has raised the percentage of local buyers of property in central areas. In fact, the proportion of Singaporeans buying new homes in the Core Central Region (CCR) rose from 62.8% in 2019 to 76.3% in 2020 and 76.2% in 2021 respectively.

“From the onset of the COVID-19 pandemic and travel restrictions, interest from foreign purchasers become more moderate. However, that has triggered local buyers to examine the merits of prime properties and resulted in an increase of local purchasers,” said Thomas Tan, Chief Operating Officer of ERA Singapore.

While Districts 9, 10, and 11 remain Singapore’s most prestigious areas, prices have not grown as quickly as those in less central zones of Singapore. As a result, CCR property prices remain at pre-pandemic levels.

“Between Jan 2020 to Nov 2021, new launch prices in the CCR grew by a mere 0.35%, while new launch prices in the RCR and OCR grew 12.59% and 8.69% respectively,” said Mr Tan.

According to Mr Tan, demand for CCR properties is likely to rise in the near future.

“Another factor (to consider) is growing household income among the local population. This may drive demand across all regions, including the prime districts, on top of the new WFH phenomenon that is pushing people to get a bigger space,” said Mr Tan.

The emergence of the Omicron variant of the virus has not dimmed the Singapore government’s hopes of keeping Vaccinated Travel Lanes (VTLs) open, although rollout has been slower than expected. As foreign arrivals grow, the CCR and luxury property segment is likely to follow suit.

However, the new cooling measures introduced and the likelihood of gradually increasing interest rates may dampen sales.

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This article was written by Joanne Poh. A former real estate lawyer, she writes about property and personal finance and spends her free time compulsively learning languages and roller skating in carparks.