We are all too familiar with the old adage that goes’ “location, location, location”. But have you really tried to ascertain whether location is such a big deal when it comes to investing in property? Well, we shall find that out. The Singaporean real estate market has been on a downturn but just as expected some parts remain unaffected. You may wonder why this is the case. In property investment location really matters and Singapore is no exception. A prime location is always more valuable for several reasons;
Game-changing Future Developments
- If the Land Transport Authority Master Plan 2013 is anything to go by, then by 2030 80% of households in Singapore will just be 10-minutes walk away from an MRT station. At such a time, those who live away from the country’s core will enjoy similar benefits and conveniences just like those who reside within the CBD. All these will happen thanks to the introduction of the two new MRT lines; Downtown Line and the Thomson East Coast Line. Announced in Aug 2014, properties near to Thomson East Coast Line Stations have already stirred up the radar of buyers. In just overnight, properties like The Line @ Tanjong Rhu and Costal Del Sol is just next to Katong Park MRT and Costal Del Sol respectively. Therefore, valuation of such properties will go up as as they are just door step to MRT stations now. Close proximity to Siglap MRT which is also part of Thomson Line, the first new launch condo previewing in 2017 is by Frasers Centre Point Homes where its Seaside Residences price will be targeted at both district 15 & 16 lovers. These two lines will completely change the public transport system in Singapore and residents will enjoy an easy access of the beautiful Singapore Island.
- With these developments coming into the picture, the prices of property have been affected with respect to their location. The government in its efforts to curb property speculation and stabilize housing prices has just realized that this is quite an expensive affair.
- An example of price variation based on location is the price differences of the HDB. The average price for a new 4-room HDB in Yishun, located outside the Central Region averages at $360000.And for an HDB at Central Region it costs an average of $552000. This wide disparity in price is a clear indicator of how location affects property value.
Why Location Matters
There are several reasons why property that exist at or close to the Central Business District cost more;
- Proximity to Various Amenities and Conveniences
Homes situated in the Central Region enjoy an easy access to high-end private housing and top notch business and commercial amenities. All these result in the higher premiums demanded for these homes. As a matter of fact, even public housing that exists near the Central Region cost much more when compared to those away from the CBD. For instance, the prices for public housing at Toa Payoh, Queenstown, and Bishan cost above the median prices since these areas are more connected to the entire island.
Asides connectivity to the rest of the island, the prime locations also enjoy an easy access to various amenities. These include a number of malls, family entertainment joints, and exceptional transport network.
- Sense of Pride
Home buyers are not only driven by convenience and amenities when buying homes but their perceptions also play a role during property purchase. Most buyers prefer the Central Region since such an area is perceived to be mature and more developed when compared to other regions. By living within such areas one feels a sense of pride since there exists unlimited facilities and amenities within the area. Furthermore, these housing estates are located in close proximity to private housing and thus they are perceived to be more valuable and luxurious.
Despite the development of the MRT stations that make Singapore more accessible, price value continue to vary based on its nearness to the Central Region. Those that are close to the core will continue to fetch a higher premium just because it is perceived to be more valuable and prestigious to own property in such an area.
Some of the regions that are included in the Core Central Region according to the Urban Redevelopment Authority include; neighborhoods near River Valley Road, Bukit Timah Road, Orchad Road, Downtown Core, and Sentosa.
Will Location Still Matter after the Completion of MRTs?
With the development of new MRT stations Singapore will be more accessible and this brings in the question as to whether location will still matter now that the island is more accessible. Well, the country will be easily accessible through public means and homebuyers who desire to cot on cost can buy homes located away from the Central Region. This will save money and they can still enjoy an easy access to the entire region. Nonetheless, other factors play a crucial role when it comes to property valuation.
Going by the latest price trends, areas such as Jurong and Punggol enjoy great price pickup. Therefore, High Park Residences in Fernvale and Lake Grande in Jurong are almost sold out. Spill over from Lake Grande demand, Clement Canopy price has also attracted good response from the ground even though it has not been launched for sale yet. However, the lure of the Core Region still remains unbeatable and therefore, the demand for prime property remains high and will most likely remain unshaken.
Why is this so? Well, asides price and accessibility, other intangible factors matter when it comes to buying a home. Buyers value such things such as being close to their family and friends. They also enjoy the prestige that comes with owning a house within a prime neighborhood. More so, location also affects the kind of schools your children will go to.
Fortunately, for those under a tight budget the property market allows them to upgrade their homes by simply selling their existing home then move in to a bigger apartment. Therefore, if your family is still young you can buy more affordable home then later move in to the prime locations when your finances allow. As a matter of fact, Singapore is so connected and more convenient means of transport are being developed. Therefore, it will still be easier to move around the island irrespective of where you are located within the region. Even if you are staying in Tanah Merah, you are only 9 MRT stops or 25 minutes’ train ride to city hall. It is not hard to understand why home buyers can accept both The Glades price and Grandeur Park Residences price as these two developments are not that far from town and yet both are door step to Tanah Merah MRT. Such developments will ensure you are never far from a party hotspot or any other amenity and conveniences.
Location really matters when it comes to property valuation. However, you should also take into consideration other intangible factors that affect buyer preferences. If you are a home buyer or investor interested in getting a good return from your investment, then it will be wise to consider the proximity of your investment to various amenities and conveniences. This will not only guarantee a good return on investment but will also guarantee a fast sellout once you decide to resale your property.