Singapore buyers seeking condos near MRT stations
These properties command a premium of up to 20%
Oct 31, 2008
Singapore home buyers are becoming increasingly keen on properties located within walking distance to an MRT station, as convenience becomes a main concern in the midst of high petrol prices.
These increasingly popular units are able to command a premium of up to 20 per cent. There have been instances where buyers are willing to pay between 10 and 20 per cent more than they would for a home a few bus stops away from a station.
One of the reasons home buyers do not mind forking out the extra cash is because they believe it would help them save on transportation costs in the long run, especially with the hike in the cost of living.
Other contributing factors include multiplying Electronic Road Pricing gantries and increasing worries over environmental degradation.
This convenience is also favoured by citizens who do not drive, buyers with school-going children and investors who want to rent the units to expatriates. Majority of these people rely heavily on public transport.
Although prime districts such as 9, 10 and 11 remain popular, these buyers are also looking towards properties near MRT stations, pushing prices up.
Housing Development Board (HDB) flats with proximity to stations have had their valuations increase by at least S$20,000 or S$30,000. To top it off, buyers often pay even more in cash.
Some of the more popular HDB flats close to MRT stations include those in areas like Tiong Bahru, Redhill and Queenstown, all of which are close to town. Even so, units nearby stations in the suburbs can enjoy a big boost in price.
Flats in Woodlands close to the MRT station are seeing asking prices of between S$40,000 and S$50,000 above valuation, and demand is so high that available units get snapped up within two or three weeks compared to the few months to sell a unit further from the station.
Due to the fact that owners of these flats are comfortable and do not want to sell, the supply of such units are low and in turn compels buyers with the budget to take any well-located flat for sale.
For private properties, the scenario is similar with condominiums close to MRT stations commanding a premium of up to 20 per cent over similar units further away.
At Tiong Bahru MRT station, new condominiums located at the doorstep of the station, such as Twin Regency and Regency Heights in Kim Tian Road, are able to fetch S$1,240 psf on average. Meanwhile, about five to 10 minutes away, prices average at S$1,072 psf or about 15 per cent less, at the equally new The Regency at Tiong Bahru on Chay Yan Street. Rental returns are also very high, thus these units are rarely on the market.
Even so, proximity to different MRT stations affects property values differently; with big differences between two consecutive stops. According to analysis by property firm Savills Singapore, condos around Novena have price tags almost double of those around Toa Payoh.
The same analysis revealed that condos around the Dhoby Ghaut station fetched an average of S$1,600 psf in the first six months of the year. Meanwhile, condos near the Little India station less than two kilometres away, fetched only two-thirds that on average, or S$1,071 psf.
Other factors that influence buyers include quality, age and tenure of the project, as well as its facilities, potential rental rates and available amenities in the area.
Units near Lavendar and Farrer Park MRT stations are separated by only 1.5km in distance but the difference in price is about S$200 psf. Condos with good facilities such as Citylights at Lavender boosted prices in the vicinity to an average of S$1,104 psf in the first six months of the year but at Farrer Park, which is surrounded by smaller condos with minimal facilities, rents and prices tend to be lower.