SINGAPORE – A spacious 1,300 square foot freehold property, located just a stone’s throw from the Orchard shopping district, is selling for $1.3 million or $1,000 per square foot (psf).
The deal may seem too good to be true, until you arrive at the property at Hoot Kiam Mansion and realise that the unit is in an old building with no lift, swimming pool or security guards.
But with private home prices continuing to rise, old walk-up apartments are getting increasingly popular, said market observers.
In 2022, two units in Hoot Kiam Mansion in Hoot Kiam Road in the Tanglin district were sold for $1.3 million each.
One of the sellers said: “Many people came to view my house. They were pretty excited until they got here and saw that the building is rundown. They almost wanted to cry when told that they would need to climb the stairs to get to the top fourth floor.”
The 52-year-old, who wanted to be known only as Mrs Lim, paid $350,000 for her apartment in 2001. She started marketing it before the Covid-19 outbreak but the offers she received were below her expectations.
“The earlier offers were around $900,000 and $1 million. The prices picked up only last year,” added Mrs Lim.
“There were at least three attempts to go for an en bloc sale, but we always failed to gather the 80 per cent majority consent required. The proposed en bloc price for my unit was $1.2 million. With the property sector booming, I decided not to wait for the en bloc sale any more,” she said.
The Straits Times understands that the owner of the other unit made a capital gain of more than $1.2 million, as she paid less than $100,000 for it.
As most walk-up apartments are old and many are in buildings which do not have a name, it is challenging to gather sales records of such homes.
Based on ERA Realty’s research, the Urban Redevelopment Authority (URA) data showed 81 caveats lodged for walk-up apartments in 2022, with 64 per cent of the sales transactions in the central region.
A caveat is lodged with the Singapore Land Authority and it secures a property for the buyer. However, not all buyers lodge caveats.
ERA Realty research and consultancy head Nicholas Mak noted that 93 per cent of the transacted walk-up apartments are freehold with the rest sitting on land with long leasehold tenures such as 999 and 9,999 years.
Prices ranged from $900,000 for a 1,302 sq ft unit at 25 Guillemard Road to $3.4 million for a 1,970 sq ft apartment in Jalan Ulu Siglap. On a psf basis, the prices range from $650 psf for a 1,432 sq ft unit in Swan Lake Avenue to $2,014 psf for a 1,152 sq ft unit at Beng Tong Mansion in Tanjong Katong Road.
Mr Mak said before the pandemic, rental yields of old, walk-up apartments were not higher than condos or other apartments, but they have since closed the gap.
Former stockbroker Soon Teck Onn, 55, invests in walk-up apartments because he said they are the “best value in terms of rental yields and capital appreciation”.
“And because most of them are old, they have a special graceful proportion that you cannot find in newer developments. I buy only freehold ones near MRT stations, because these hold their value well, no matter how old they are,” he added.
Ms Sammi Chong and Ms Rachel Koh, who founded welovewalkups.com 14 years ago, noted that, back then, not many people were keen on such properties.
But the two friends, who joined the property industry in 2007, saw the potential in this niche market and decided to focus on it.
As the starting point is affordable, most buyers would be able to get some capital gains after keeping the property for a few years, said Ms Chong. She paid $400,000 for her first walk-up apartment in Joo Chiat in 2008 and sold it for close to $700,000 a year later.
Last March, Ms Chong represented a seller for a 1,076 sq ft walk-up apartment in Joo Chiat. The 9,999-year leasehold unit, which was bought for $920,000 around 2018, changed hands at $1.4 million.
The majority of walk-up apartments are strata-titled and the size ranges from 800 sq ft to 1,200 sq ft. Prices are generally between $1 million and $2 million, said Ms Chong.
A 1,076 sq ft walkup apartment in Joo Chiat, built in 1961, was sold for $1.42 million in March 2022. PHOTO: WELOVEWALKUPS.COM
Such homes, which were first built in Tiong Bahru, are mostly in older and more established residential areas in the core central region and other parts of the central region.
Walk-up apartments in Siglap and Joo Chiat are also sought after. These neighbourhoods, which boast a rich history and a sizeable expatriate community, are also known for their food choices.
Ms Koh noted that rental yields for walk-up apartments have caught up with condominiums in recent years.
Ms Chong noted that a nicely renovated two-bedroom walk-up apartment can easily fetch a monthly rent of $5,500, comparable to $5,500 to $6,000 for a two-bedroom condominium unit.
She and Ms Koh have also helped their clients over interior design matters and manage the walk-up properties for them.
“Source:[S’pore investors home in on walk-up apartments as condo prices continue to rise] © Singapore Press Holdings Limited. Permission required for reproduction”
