With the housing market slowly but surely taking a dip in prices and sales (as was intended), buyers are just biding their time waiting to pounce on a good deal. But as usual, there are certain areas that aren’t as heavily affected by the recent lack of market activity. Why is this so? Our friends from 99.co explain in further detail as to why the prices in certain areas don’t fluctuate as much:
In real estate, location is everything. But is it worth shelling tens of thousands more for prime location in a highly accessible country like Singapore? We examine the main reasons that drive property prices in different parts of the island to help you figure out if an area makes sense for you.
What’s Coming Up in the Future?
Come 2030, Singapore will become more accessible thanks to the introduction of two new MRT lines. The Thomson Line and the Downtown Line are set to become game-changers in the public transport offerings in our island because it means that residents will be sited closer to transport links.
The Land Transport Authority Master Plan 2013 says that by then, 80% of households in Singapore will be located within a 10-minute walk from an MRT station. Property analysts have even indicated that it would not matter any more if residents live near the country’s Downtown Core.
However, there remain some crucial points that affect the price and intangible value of a property’s location.
Even as the government’s measures to curb property speculation and stabilise housing prices are in place, homes in the Core Central Region and Outside Central Region continue to cost more. A quick check with the HDB shows that the median price for a new four-room HDB flat in Toa Payoh (located in the Rest of Central Region) is $552,000, while the median price of a similar unit in Yishun (located Outside Central Region) is $360,000.
What Really Matters?
Which brings us to the question: Does the old adage—location is the key in real estate—ring true even in modern times?
We think there could be two main reasons for the price skew in favour of the Core Region:
1. Amenities and Convenience
The factors that contribute to the higher premiums asked for homes in this region include the concentration of high-end private housing and the proximity to anchor commercial and business amenities.
Even public housing sites near the Central Region, such as Toa Payoh, Bishan and Queenstown (technically referred to as Rest of Central Region), are sold at above median prices because of their accessibility to the rest of the island.
The amenities attracting most home-buyers to these areas include a good network of malls, family entertainment facilities and a great public transport network.
There is also the perceived prestige of living in the Central Region as these neighbourhoods are mature and considered more developed to include comprehensive amenities and facilities. The fact that these housing estates are located near private housing also contributes to its perceived value and luxury cachet.
Even as Singapore becomes more accessible, prices for property located in the Core Central Region will continue to fetch a higher premium than those located further away because of the esteem associated with owning a property in the prime districts of Singapore.
This region includes neighbourhoods located near Bukit Timah Road, Holland Road, Farrer Road, Orchard Road and River Valley Road—basically what real estate insiders refer to as Districts 9, 10 and 11. Sentosa and the Downtown Core are also included in the Urban Redevelopment Authority’s definition of the Core Central Region.
What Is Changing?
This brings us back to the point of Singapore’s increasing accessibility.
If the country is conveniently accessible by public transport, then wouldn’t homebuyers be less particular about purchasing homes located further away from the Central Region? By doing so, they would be able to save a significant amount of money.
Based on the market trends, although there has been a great pickup in the prices of areas like Punggol and Jurong, the lure of the Core Region is hard to beat for property investors looking for more bang for their investment buck.
We think that the demand for homes in the Central Region is unlikely to wane.
This is because when buying homes, people are driven by factors other than price and accessibility. Intangible values such as being close to family and friends, as well as the prestige of living in a ‘good’ neighbourhood come into play as well.
More concretely, where you live in Singapore actually plays an important role in where you children go to school thanks to the Ministry of Education’s Home-School Distance Category allocation.
But let’s not forget that the property landscape in Singapore allows for homeowners to upgrade their homes by getting handsome returns on your existing property when you sell out and decide to move to a bigger apartment. So if you are a young family looking for a means to save some money, then perhaps choosing a more affordable home for the time being is the way to go.
After all, location is everything but when things are so connected in Singapore, it becomes less of a deal-breaker. The new train lines will ensure that you are never far from a party hotspot or fine dining enclaves – every zone will be a good location!
99.co is a property search engine with the overarching goal of building a more transparent and efficient property market. We are working to achieve that by empowering people with the tools and information needed to find a place to live in the best way possible.
Is location the only thing that is important to you when you buy a house? What other factors do you take into consideration? Share your thoughts with us here!