Published 21 January, 2011
By Jo-Ann Huang Limin
Once living in the shadow of their inner-city and city fringe cousins, suburban residential properties are now stepping out on their own – with some of these properties located in more remote areas only accessible by feeder buses and light rail transit (LRT).
The Tennery, one of Far East Organization’s newest properties, is a prime example of an outlying property hot in demand. According to Far East Organization, more than 90 per cent of the 338 units – 620 sq ft to 950 sq ft for one- and two bedroom units – have been sold.
Located at the crossroads of Woodlands Road and Bukit Panjang, The Tennery units sold at prices ranging from $1,118 to $1,317 per square foot (psf), according to December sales figures from the Urban Redevelopment Authority. The 16-storey property will be built above the Ten Mile Junction LRT station and the upcoming Junction 10 shopping mall.
A little over a year ago, a unit at another Far East Organization’s property, Mi Casa in the Choa Chu Kang/Bukit Panjang area, transacted at a price of $692 psf in November 2009. Mi Casa’s homes cater to families, with two- to four- bedroom units ranging from 990 sq ft to over 2,000 sq ft for the largest units.
Analysts say more home buyers and investors are looking at suburban properties, now that plans to revamp regional centres have been announced by both developers and the Government.
“Home buyers who are buying properties, especially those that are away from the city centre, are predominantly Singaporeans. Almost eight out of 10 of them will be Singaporeans. But we are also seeing an increasing number of foreigners – predominantly permanent residents – who are considering buying such properties, especially as Singapore increases its intake of immigrants,” said Mr Nicholas Mak, research head at real estate consultancy SLP International.
And despite the new cooling measures, property developers are capitalising on the trend. For instance, CapitaLand is building a 24,902-sq-m mixed retail and residential property at Bedok Town Centre. The developer is also going ahead with plans to release the project’s 500 units for sale this year, regardless of the new measures.
The property is located within a shopping catchment of 300,000 residents in the Bedok area, atop a new integrated bus and MRT interchange, and is a short walk from new and revamped family-friendly amenities.
Other suburban locations that may present property development opportunities is the Jurong Lake District – home to Jurong Gateway, Cleantech Park and a number of business and leisure destinations – as well as Seletar Hills, where The Greenwich retail and residential development was recently launched.
“Far-flung suburban properties tend to be more for owner occupation. If they are not very accessible to local transport, they tend to be less attractive to tenants. Therefore, investors would buy it only if they think there is good capital appreciation of some of these properties,” said Mr Mak.
“Once the authorities have announced plans for a new MRT track or stations around the area, the owners of some of these properties would immediately increase their asking price,” he added.
With the Government Land Sales programme set to release 10 sites on the confirmed list located near MRT stations this year, analysts expect new developments to break into these areas.
“Singapore has come a long way. In the past, if you had properties in places like Changi, it could take a long journey time of at least two hours to get to the city. But now, we have a good network of MRT and expressways in Singapore. And in that sense, some Singaporeans are looking at these properties in a better light,” said Mr Colin Tan, head of research and consultancy at Chesterton Suntec International.
Investors who intend to ride on growing rentals can now look to suburban properties. As Singapore’s population and economy grows, demand for rental properties in suburban areas will also be on the rise. Rentals grew by 27.5 per cent from November 2009 to November 2010.
Even buyers with deeper pockets are seeking out homes in suburban areas. Mid-tier developments such as Suites @ Eunos were sold at a median launch price of $1,339 psf, while The Lanai was sold at the latest price of $1,450 psf. Both properties are in the Outside Central Region, with Suites @ Eunos located at Jalan Yasin and The Lanai located near Hillview Avenue.
The sentiment for such homes will be affected by the new cooling measures but the effect will be short-lived, Mr Tan said.
“The market is just reeling from shock, but normal service will resume in a couple of weeks,” he said.