View Full Version : Homes near MRT on track for smaller premiums
http://www.todayonline.com/Business/Property/EDC110617-0000411/Homes-near-MRT-on-track-for-smaller-premiums
Homes near MRT on track for smaller premiums
by Tan Chin Keong
04:46 AM Jun 17, 2011
Some truths are cast in stone. In real estate, "location, location, location" is said to be the most important thing that determines a property's value. In economics, the law of supply and demand - the more there is of one item, the lower its price - is often the foundation of all market theories.
Both of them are about to converge in Singapore's housing market, where at least 10,000 new homes could become available around MRT stations in the next 10 years. The result: You may not have to pay too much of a premium for that ideal home.
Given the rising cost of private car ownership in Singapore in recent years, proximity to an MRT station has become an important attribute many homebuyers look for when choosing their dream houses. Due to their high popularity, private residential properties located within easy access of MRT stations may be able to command a significant price premium over those in the vicinity but farther away.
Based on recent transaction data, it could be estimated that the premium ranges from 15 to 25 per cent.
If all goes to plan, Singapore's MRT network will expand significantly over the next 10 years. Currently, the network runs for 138km across 78 stations served by four lines - North-South, East-West, North-East and the partially completed Circle Line.
With the Circle Line expected to be completed by the end of the year and with the addition of the Downtown Line in stages from 2013 to 2017, the number of MRT stations will increase to 124 in six years.
In addition, with the planned Thomson Line and Eastern Region Line, expected to be completed in 2018 and 2020 respectively, Singapore's MRT network could more than double to 278 km within the next decade.
Based on recent Government statements, future high-density housing in Singapore could be concentrated around transport nodes such as MRT stations. This much is expected from the fourth-quarter unveiling of Concept Plan 2011, the latest of the Urban Redevelopment Authority's (URA) once-in-10-years blueprint for Singapore housing.
To achieve this goal, the Government might set aside more land around MRT stations for residential purposes and also increase the plot ratios for residential land near the stations.
At a URA seminar in April, it was highlighted that the Government could add more than 10,000 HDB flats and private homes in vacant land around three existing MRT stations - Bishan, Commonwealth and Queenstown - in the next decade and beyond.
This should help address both the issues of housing shortage and road congestion, as residents staying near MRT stations would have less need to drive.
Combining both parts of the equation - the significant expansion of Singapore's MRT network and the URA's plan to build more high-density housing around MRT stations - the logical conclusion would be a significant increase in the supply of residential properties near MRT stations over the next 10 years.
This could narrow the price premiums that homes near MRT stations could command in the long term. While this scenario is still far away, other factors such as proximity to a "good school" may become more important for homebuyers with a long-term view.
Tan Chin Keong is an analyst at UBS Wealth Management Research.
alvinkoh1818
23-06-11, 13:12
the writer has failed to appreciate the other part of the equation. With the extensive coverage of the MRT network in years to come, it will naturally enhance the ease of travelling to more destinations than currently. Thus, by same token, premium of housing near MRT could be higher than what it is today.
Whether this perceived increase in value outweigh the increase of such housing supply near MRT is highly debatable.
http://www.todayonline.com/Business/Property/EDC110617-0000411/Homes-near-MRT-on-track-for-smaller-premiums
Homes near MRT on track for smaller premiums
by Tan Chin Keong
04:46 AM Jun 17, 2011
Some truths are cast in stone. In real estate, "location, location, location" is said to be the most important thing that determines a property's value. In economics, the law of supply and demand - the more there is of one item, the lower its price - is often the foundation of all market theories.
Both of them are about to converge in Singapore's housing market, where at least 10,000 new homes could become available around MRT stations in the next 10 years. The result: You may not have to pay too much of a premium for that ideal home.
Given the rising cost of private car ownership in Singapore in recent years, proximity to an MRT station has become an important attribute many homebuyers look for when choosing their dream houses. Due to their high popularity, private residential properties located within easy access of MRT stations may be able to command a significant price premium over those in the vicinity but farther away.
Based on recent transaction data, it could be estimated that the premium ranges from 15 to 25 per cent.
If all goes to plan, Singapore's MRT network will expand significantly over the next 10 years. Currently, the network runs for 138km across 78 stations served by four lines - North-South, East-West, North-East and the partially completed Circle Line.
With the Circle Line expected to be completed by the end of the year and with the addition of the Downtown Line in stages from 2013 to 2017, the number of MRT stations will increase to 124 in six years.
In addition, with the planned Thomson Line and Eastern Region Line, expected to be completed in 2018 and 2020 respectively, Singapore's MRT network could more than double to 278 km within the next decade.
Based on recent Government statements, future high-density housing in Singapore could be concentrated around transport nodes such as MRT stations. This much is expected from the fourth-quarter unveiling of Concept Plan 2011, the latest of the Urban Redevelopment Authority's (URA) once-in-10-years blueprint for Singapore housing.
To achieve this goal, the Government might set aside more land around MRT stations for residential purposes and also increase the plot ratios for residential land near the stations.
At a URA seminar in April, it was highlighted that the Government could add more than 10,000 HDB flats and private homes in vacant land around three existing MRT stations - Bishan, Commonwealth and Queenstown - in the next decade and beyond.
This should help address both the issues of housing shortage and road congestion, as residents staying near MRT stations would have less need to drive.
Combining both parts of the equation - the significant expansion of Singapore's MRT network and the URA's plan to build more high-density housing around MRT stations - the logical conclusion would be a significant increase in the supply of residential properties near MRT stations over the next 10 years.
This could narrow the price premiums that homes near MRT stations could command in the long term. While this scenario is still far away, other factors such as proximity to a "good school" may become more important for homebuyers with a long-term view.
Tan Chin Keong is an analyst at UBS Wealth Management Research.
rattydrama
23-06-11, 13:30
the writer has failed to appreciate the other part of the equation. With the extensive coverage of the MRT network in years to come, it will naturally enhance the ease of travelling to more destinations than currently. Thus, by same token, premium of housing near MRT could be higher than what it is today.
Whether this perceived increase in value outweigh the increase of such housing supply near MRT is highly debatable.
so underground MRT + amenities + good school + FH will be the choice location.
Beware of those developers who hype about LRT stations. There should be no significant advantage against the upcoming underground lines.
linchong84
23-06-11, 15:35
so underground MRT + amenities + good school + FH will be the choice location.
Beware of those developers who hype about LRT stations. There should be no significant advantage against the upcoming underground lines.
Actually it doesn't matter whether it is MRT or LRT. It all depends on how long it takes to reach city area. Eg, right now does a woodlands or Marsiling MRT condo reach town faster than a Sengkang LRT condo that is 1 or 2 stops away from the main Sengkang MRT? Woodlands will definitely be slower. Maybe some might argue woodlands need not change train so more convenient. How about stations like CCK? They need to change at Jurong East too.
So, it all depends on what MRT stations they are. The word 'MRT' itself does not or should not guarentee a premium while the word 'LRT' also does not mean condemnation. Calculate the rough timing is more accurate.
Actually it doesn't matter whether it is MRT or LRT. It all depends on how long it takes to reach city area. Eg, right now does a woodlands or Marsiling MRT condo reach town faster than a Sengkang LRT condo that is 1 or 2 stops away from the main Sengkang MRT? Woodlands will definitely be slower. Maybe some might argue woodlands need not change train so more convenient. How about stations like CCK? They need to change at Jurong East too.
So, it all depends on what MRT stations they are. The word 'MRT' itself does not or should not guarentee a premium while the word 'LRT' also does not mean condemnation. Calculate the rough timing is more accurate.Well some people prefer LRT to MRT nearby coz MRT would carry with it huge crowds and commuters but LRT just has small crowd so relatively quieter environment! :D I for one certainly prefer quietness to busy noisy shopping malls. :p
It really depends on the needs of the family as they also change with time.
Well some people prefer LRT to MRT nearby coz MRT would carry with it huge crowds and commuters but LRT just has small crowd so relatively quieter environment! :D I for one certainly prefer quietness to busy noisy shopping malls. :p
rattydrama
23-06-11, 19:16
Actually it doesn't matter whether it is MRT or LRT. It all depends on how long it takes to reach city area. Eg, right now does a woodlands or Marsiling MRT condo reach town faster than a Sengkang LRT condo that is 1 or 2 stops away from the main Sengkang MRT? Woodlands will definitely be slower. Maybe some might argue woodlands need not change train so more convenient. How about stations like CCK? They need to change at Jurong East too.
So, it all depends on what MRT stations they are. The word 'MRT' itself does not or should not guarentee a premium while the word 'LRT' also does not mean condemnation. Calculate the rough timing is more accurate.
LRT is above ground and we need to walk to MRT during the morning rush but the new upcoming MRTs are all below grounds.
I have tried the LRT connecting to MRT and vice versa before. The experience inside a small cabin with stale air and not much ventilation is also least perferred.
Perhaps we need to add on the walking time in comprison.
Well some people prefer LRT to MRT nearby coz MRT would carry with it huge crowds and commuters but LRT just has small crowd so relatively quieter environment! :D I for one certainly prefer quietness to busy noisy shopping malls. :p
LRT to MRT transfer is waste of time..
Better buy near MRT if want to take public transport...
If I prefer quiteness I wouldnt be in Singapore :D everywhere's crowded
Cannot even walk in tampines mall.
I want quietness and convenience! Give me an underground bunker! Lease from future operator of TSL!
Wild Falcon
24-06-11, 13:54
EXISTING condos near MRT will have smaller premium as other condos will start to hv MRT as well. I don't see how condos with future MRT stations coming up can have smaller premium. Premium tends to go up when the MRT is closer to completion.
Will there will be Premium differential between lines?
Eg Circle and DTL vs the operational NS and EW lines.
Circle and DTL are underground and less crowded but NS/EW stations are more relevant (Raffles/CityHall/Orchard).
Any views?
Will there will be Premium differential between lines?
Eg Circle and DTL vs the operational NS and EW lines.
Circle and DTL are underground and less crowded but NS/EW stations are more relevant (Raffles/CityHall/Orchard).
Any views?
if u ask me, Circle Line probably has the least premium, as it's designed as a connection line, so u most likely have to change trains.
DTL has great potential. Right now NS line is crowded because ppl coming down have no choice. With DTL ppl have a choice. This one goes to newton, botanic garden and marina bay financial center.
Later with another Thomson Line, NS line will be be even less crowded
if u ask me, Circle Line probably has the least premium, as it's designed as a connection line, so u most likely have to change trains.
DTL has great potential. Right now NS line is crowded because ppl coming down have no choice. With DTL ppl have a choice. This one goes to newton, botanic garden and marina bay financial center.
Later with another Thomson Line, NS line will be be even less crowded
What do you all think the impact of DTL on the properties along bukit timah once it is completed in 2015? Are there still more upside to be realized?
linchong84
24-06-11, 15:06
What do you all think the impact of DTL on the properties along bukit timah once it is completed in 2015? Are there still more upside to be realized?
The future MRT projects have been priced in PARTIALLY because the lines are still under-construction.. The closer it comes to the opening, the higher it will go.. Some some developers might price in FULLY when they launch it haha..
CCL - being an orbital line you will probably have to change lines to reach your destination. But it'll 'cut' thro' all the other radial lines - so that's an advantage in some cases.
But I reckon you're right on DTL.
if u ask me, Circle Line probably has the least premium, as it's designed as a connection line, so u most likely have to change trains.
DTL has great potential. Right now NS line is crowded because ppl coming down have no choice. With DTL ppl have a choice. This one goes to newton, botanic garden and marina bay financial center.
Later with another Thomson Line, NS line will be be even less crowded
The future MRT projects have been priced in PARTIALLY because the lines are still under-construction.. The closer it comes to the opening, the higher it will go.. Some some developers might price in FULLY when they launch it haha..
Do you think those properties near the junctions (DTL/CL, DTL/NSL) will command a higher premium? In the old days when there are only 3 MRT lines, the junctions are mostly for commercial use. With more new lines coming online, some of the junctions will be in the residential areas. Just wonder for residential properties, will it command a higher premium by being near to a MRT junction
linchong84
24-06-11, 15:57
Do you think those properties near the junctions (DTL/CL, DTL/NSL) will command a higher premium? In the old days when there are only 3 MRT lines, the junctions are mostly for commercial use. With more new lines coming online, some of the junctions will be in the residential areas. Just wonder for residential properties, will it command a higher premium by being near to a MRT junction
Very hard to compare as different stations have different amenities so it might be the amenities that affect the pricing and not the mrt junction..
I think it depends on what kind of lines intersaction.. For serangoon, i think it will help because NE line don't go to very fantastic stations like orchard, cityhall and raffle place.. So, Circle line complemented it very well by going to nicoll, brash basah, esplanade, etc.. so it will be very convenient for the people staying in serangoon be it they want to go shopping in orchard or work in cityhall,raffles place area..
For bishan, N-S line basically goes to all the most impt places.. The circle line only resulted in going around a big circle so it doesn't really help.. so there shouldn't be a premium.. but my perspective most likely is not accurate cos i dun take mrt haha..
It has certainly have impact as I can see property around my area has gone up substantially as it is near Circle line, N-E line and W-E line.
Do you think those properties near the junctions (DTL/CL, DTL/NSL) will command a higher premium? In the old days when there are only 3 MRT lines, the junctions are mostly for commercial use. With more new lines coming online, some of the junctions will be in the residential areas. Just wonder for residential properties, will it command a higher premium by being near to a MRT junction
It has certainly have impact as I can see property around my area has gone up substantially as it is near Circle line, N-E line and W-E line.
Which area are u in?
devilplate
24-06-11, 23:46
Which area are u in?
I tink he got a few ppty all ard different mrt lines
I tink paya lebar mrt junction not bad....
I am staying in a mature estate at city fringe. Bus services to town is good enough besides the three different mrt lines.
Which area are u in?
Akira Fudou
25-06-11, 15:51
Very hard to compare as different stations have different amenities so it might be the amenities that affect the pricing and not the mrt junction..
I think it depends on what kind of lines intersaction.. For serangoon, i think it will help because NE line don't go to very fantastic stations like orchard, cityhall and raffle place.. So, Circle line complemented it very well by going to nicoll, brash basah, esplanade, etc.. so it will be very convenient for the people staying in serangoon be it they want to go shopping in orchard or work in cityhall,raffles place area..
For bishan, N-S line basically goes to all the most impt places.. The circle line only resulted in going around a big circle so it doesn't really help.. so there shouldn't be a premium.. but my perspective most likely is not accurate cos i dun take mrt haha..
NE line consist of Dolby Ghaut, it doesnt required circle line to improve its value.
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