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This is a review on some properties which are currently marketed by Estate Magnates. This is to provide potential buyers with a more in-depth view of the property and have all the details needed to make a well-informed decision.
This review is written based on permission given by the seller and I will be serving his interest as I am representing him in this sale transaction.
This is currently one of the biggest land area found in the Frankel Estate, a bungalow which is sitting on a land size of 12,046 sqft and with a build-up of 4,610 sqft.
To place this land size into comparison, it is about 1/5th the size of a football field!
What makes this landed property so unique is that it is a combination of a part single/ part 2-storey detached house with an attic. This presents with a very unique feel as compared to modern bungalows which prioritize strongly on functionality by maximizing its land area use.
With a huge garden and outdoor patio at the back of the property, this landed property is very suitable for people who wish to have their own herb garden. Furthermore, the bungalow has good privacy due to a large amount of shrubbery covering its perimeter.
What adds to the uniqueness of the landed property is its 7-Bedrooms with 5 Baths with two staircase landing. This is a great size for homeowners who prioritize on multi-generation families.
Amenities and Facilities in the area include Siglap Centre, Siglap V, East Coast Park, Food Centres, Markets, etc, are available a short drive away.
Schools in the vicinity include Opera Estate Primary School, St. Stephen’s School, Global Indian International School (East Coast Campus), Victoria School, Saint Patrick’s School, etc.
As this property was first developed in the 1990s, there are a lot of opportunities to increase the total build-up of the area now, due to the revised URA guidelines on Gross Floor Area.
As the minimum site coverage of detached homes in non-GCB areas can reach up to 50%, simply redeveloping it on the first floor will be around 5000 sqft, excluding further redevelopment on higher floors and areas which the easement covers.
If the second, third storey and attic are added, there can potentially be another 5000-8000sqft. Do take note that these numbers are a gross estimate and it is best to consult an architect for the final numbers.
This current landed property title comes with an easement as the adjacent road is being shared by other detached homes and it is for common use. Therefore, no construction or foundation works can be done on the easement. This brings about a potential benefit however, since that it is not along the main road, it provides for additional privacy, which is not usually the case for landed homes. Consider this a shared driveway.
Why You Should Consider Buying This Property
Low Availability in The Market
From what you can see in the chart, you will notice two points, one will be the transaction volume, and the other is transaction price.
Some of the reasons that I can think of in regards to why there is such a low transaction volume within the Frankel Estate is because that most buyers are homeowners, who are intending to stay in that location for an extended period of time. This makes it a very stable form of investment to store wealth as prices are not easily affected by property flippers.
With a current Open Market Value of 12 million dollars, the redevelopment of this unit brings about huge potential in this plot. If you refer to my example of BRRR investing, there is plenty of capital value to be drawn from this unit. However, investing this big sum of money into a property might not be suitable for non-seasoned investors.
In regards to the transacted price, you can see that there is a dip to around S$665 PSF for the blue trendline in 2019. This is because the blue trendline represents a landed property that has a Temporary Occupation Permit (TOP) in 1983. This means that the property itself is old and will require extensive renovation work. A more accurate value will be the orange trendline which is averaging around S$1137 PSF, value as these units have a TOP in 2014.
In addition, the blue trendline represents landed properties which have a TOP before 2000, these properties are usually older, that substantial renovation might be required. However, this is not a disqualifying point as it is also depending on the entry price for sale. The owners of these properties have bought in at an undervalued price and will most likely make substantial capital gains.
Take note of the duration for a potential buyer to wait if they are intending to find such properties, which can be quite a while. Take this opportunity to seize this property at a fair valuation price of $996 PSF!
Still, there are some limitations to the chart above as these are for transactions up to 2019. Please refer to the following line chart for transactions that occurred in 2020 and current asking prices. I have to include detached homes of all land sizes in the next chart to provide you with an overall picture of all transactions in the Frankel estate.
After this, allow me to do a comparison of the historical prices and current asking prices of bungalows around the Frankel estate, followed by the potential mortgage repayment costs should you intend to purchase this property.
Historical Prices & Current Asking Prices in the Market
Source: URA, edgeprop.sg
The current asking price of similar properties is as detailed above, where the properties are currently at an asking of S$986 – 2,406 PSF. This makes for most properties to be sitting at an average of S$1,523 PSF.
Judging by its historical price, any bungalow which is priced below S$1,500 PSF can be considered fair, all the way to being a value buy! The current asking for this landed property that I am currently marketing is starting from S$996 PSF.
Taking on average a redevelopment cost of $3,000,000, which is around S$250 PSF, will provide this landed property with a paper value of S$15 million. Which is still lower than the current average of S$1,523! Do take note that the averages mentioned in this article will only be based on asking prices from 2020. The timeframe upon which you purchase the landed property, right till key collection, the asking price will have probably increased by S$100-S$200 PSF.
Mortgage Repayment Numbers
If you are intending to proceed with a 75% loan amount (S$9 million), with a tenure of 30 years and an interest rate of 1.2% (i.e. because of the current COVID-19 situation, banks are offering a much lower rate at the moment.
The estimated monthly repayment cost will be S$29,781/month ($20,781 Principal + $9,000 Interest).
· Stable Investment as located in Outside Core Region; however, location remains to be highly desirable as it is in the Frankel estate
· Asking PSF at valuation is attractive
· Low supply of older, large-sized land area of more than 10,000 sqft
· Easement located Infront of property
· 8 figure price-tag
Do you enjoy reading this extensive review? Allow me to provide something similar to your property! I provide long-form articles as a form of extended listing for my sellers, and I find them to be effective in standing out in the property market.
If you are a buyer of a co-broke agent that is interested in this property, feel free to contact me at +6596329840 or Joshua.email@example.com I will provide for you a full breakdown into the property.