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Why this resale property raked in the highest profit this year

Nassim Mansion. Photo: The Edge Singapore
Nassim Mansion. Photo: The Edge Singapore

By Fiona Ho

In this article, we look at factors that contributed to the massive profit gain.

On June 5, a 3,520 sq ft, four-bedroom unit at Nassim Mansion on Nassim Hill Road was sold at a $6.5 million profit, the highest recorded in the year 2018 so far.

The unit on the third floor was first purchased at $3.5 million ($994 psf) in November 2002, and later sold for $10 million ($2,841 psf). The profit works out to 186%, or an annualised profit of 7% over a holding period of 14 years.

This is the second-most profitable transaction at the 72-unit Nassim Mansion. The most profitable sale was that of a 7,115 sq ft penthouse on the 10th floor that changed hands for $16 million ($2,249 psf) in 2007. As it was purchased at $5.2 million ($731 psf) in 2004, this translated to a $10.8 million profit (207%) for its seller, or a 40% annualised profit over a three-year holding period.

Located in prime District 10, the freehold Nassim Mansion was completed in 1977. Profits from the sale of units in the residence ranged from $50,000 to $10.8 million over the past 15 years, according to caveats lodged.

What were the contributing factors behind the massive profit gain?

1. Location

Nestled within the upscale Nassim residential enclave, Nassim Mansion is surrounded by an abundance of greenery and lifestyle amenities. It is a stone’s throw from the Botanic Gardens and is a 6-minute drive to Orchard Road.

It is also near popular schools such as the Singapore Chinese Girls’ School and Raffles Girls’ School (Secondary), and tertiary educational facilities like the National University of Singapore (Bukit Timah Campus) and Lee Kuan Yew School of Public Policy.

In terms of connectivity, it is 360m from Napier MRT station along the upcoming Thomson-East Coast Line (TEL).

The project’s proximity to nature, well-known schools, and MRT links has made it a well sought-after choice of accommodation for homebuyers.

2. Size of the units

Older properties do tend to be larger and have more practical layouts, and this can be seen in the large unit sizes at Nassim Mansion.

At the 72-unit project, three-bedroom units start from 2,852 sq ft, while four-bedders start at 3,412 sq ft. Penthouse units at Nassim Mansion range between 5,834 sq ft and 7,223 sq ft.

The luxury of space and growing rarity of larger properties have made these units an attractive value proposition for investors and homebuyers.

Also read: Older freehold apartments below $1,000 psf are value-for-money buys

3. Freehold tenure

Having a freehold tenure contributes to the project’s appeal, especially in land-scarce Singapore, where freehold properties are often deemed as an attractive asset for investors.

This is consistent with our earlier research, which showed that freehold resale properties tend to rake in higher profits than their 99-year leasehold counterparts.

4. Timing and holding power

Property investments are highly illiquid, which makes it crucial for investors to be certain that they have sufficient holding power to weather any fluctuations in the market before committing to a property. Timing is another crucial element to successful property investing.

Both aspects are demonstrated in the case of this profit-making unit at Nassim Mansion. The former owner had purchased the unit in late 2002, following a sharp dip in the property price index in the late 1990s.

Property Price Index of Non-landed Residential Properties. Source: URA, EdgeProp.sg
Property Price Index of Non-landed Residential Properties. Source: URA, EdgeProp.sg

The former owner was also able to hold on to the property despite the massive downturn in the property market in 2009.

Having sufficient holding power has allowed the former owner to ride through temporary setbacks and wait for the market forces to turn in their favour. Meanwhile, keeping a close watch on property market dynamics has helped the former owner identify a sound buying opportunity.

*This story is contributed by EdgeProp.sg

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