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Thread: Homes near MRT on track for smaller premiums

  1. #1
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    Default Homes near MRT on track for smaller premiums

    [url]http://www.todayonline.com/Business/Property/EDC110617-0000411/Homes-near-MRT-on-track-for-smaller-premiums[/url]

    [B][SIZE="5"]Homes near MRT on track for smaller premiums[/SIZE][/B]

    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.



    [I]Tan Chin Keong is an analyst at UBS Wealth Management Research.[/I]

  2. #2
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    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.

    Quote Originally Posted by mr funny
    [url]http://www.todayonline.com/Business/Property/EDC110617-0000411/Homes-near-MRT-on-track-for-smaller-premiums[/url]

    [B][SIZE="5"]Homes near MRT on track for smaller premiums[/SIZE][/B]

    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.



    [I]Tan Chin Keong is an analyst at UBS Wealth Management Research.[/I]

  3. #3
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    Quote Originally Posted by alvinkoh1818
    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.

  4. #4
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    Quote Originally Posted by rattydrama
    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.
    Last edited by linchong84; 23rd June 2011 at 03:41 PM.

  5. #5
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    Quote Originally Posted by linchong84
    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! I for one certainly prefer quietness to busy noisy shopping malls.

  6. #6
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    It really depends on the needs of the family as they also change with time.
    Quote Originally Posted by ysyap
    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! I for one certainly prefer quietness to busy noisy shopping malls.

  7. #7
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    Quote Originally Posted by linchong84
    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.

  8. #8
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    Quote Originally Posted by ysyap
    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! I for one certainly prefer quietness to busy noisy shopping malls.
    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 everywhere's crowded
    Cannot even walk in tampines mall.

  9. #9
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    I want quietness and convenience! Give me an underground bunker! Lease from future operator of TSL!

  10. #10
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    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.

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