New MRT stops drive property boom

Accessibility a key factor for buyers.

Mon, Aug 23, 2010
my paper

THE opening of MRT stations along the Downtown Line in Phase 2, which connects Bukit Panjang to Rochor, would result in property prices surging - especially in areas on the outskirts of Singapore, said property agents.

Seven out of 10 property agents my paper spoke to said that the cash-over-valuation (COV) amount for Housing Board flats in Bukit Panjang has increased by at least 10 per cent in the past year, with its MRT station slated to open in 2015. Estate agent Jenny Lee, 33, said COVs have almost doubled in the past year, from $25,000 - an amount similar to those of flats in nearby areas such as Choa Chu Kang - to its current $40,000.

The highest COV request she has recently seen for the area was a staggering $120,000, for a five-room flat.

She said: "Bukit Panjang used to be an area that we would encourage people with a lower budget to consider, as prices were relatively cheaper.

"People used to think it's out of the way. It has become a hot spot now, with the upcoming MRT station."

Another property agent, Mr Timothy Goh, 47, said that owners now expect a COV of at least $30,000 and are more insistent on getting it.

He explained: "It is harder to negotiate for a lower COV as owners know that the value of their apartments is going to rise. They are not in a hurry to sell the place.

In fact, some are playing a waiting game up even more." Mrs Ng Siew Chai, 47, who owns an HDB flat located five minutes' walk from the upcoming Bukit Panjang MRT station, said she has been receiving flyers from property agents wanting to help sell her home.

She has turned down all of them, and plans to wait for a few more years. "I have no plans to sell the flat but I'll definitely monitor the market. If the price goes high enough, who knows?" she said.

Prices for properties that will soon have an MRT station nearby have generally gone up, with the most significant hikes found in areas that were previously considered inaccessible to those who rely on public transport, said property agent Sylvia Teo, 37.

For example, she has not noticed an increase in clients asking for private property in places such as Cashew and Hillview, even though the Downtown Line will pass through the vicinity.

In contrast, the Bukit Panjang HDB estate is now a boom town for property agents, buyers and sellers. Madam Teo said she now gets more than 20 clients a month asking for apartments in the area, compared to about five a month in the past.

She added that residents in nearby Bukit Timah usually own cars and do not benefit as much from the construction of a new MRT line. Those eyeing properties in Bukit Panjang are mostly after HDB homes and rely more heavily on public transport, she said.

"That's probably why those with foresight will try to purchase a property in this 'up-and-coming' area, before more people swoop in," she said.

MRT boon for mid-range homes

PROPERTY agents are noticing a spike in prices, especially those for mid-range private homes situated near future MRT stations.

This is because those who can afford such properties factor the availability of public transport into their home-buying decisions, said Mr Gerald Yap, 48, a realtor with Landmark Housing.

These properties are found in areas such as Pasir Panjang, Hillview and Bukit Panjang, which will be served by the new Downtown and Circle MRT lines. Ease of travel by public transport is seen to be a deciding factor for homebuyers with children or elderly family members.

The Cassandra, a freehold condominium located opposite the Circle Line's Pasir Panjang MRT station, which will open next year, provides an example of such price hikes.

A second-floor unit at the condo, spanning 1,313 sq ft, sold for $870,000 in January 2007. It was sold for $1,040,000 in March this year.

"People are buying in anticipation of the added convenience that an MRT station will bring," said Mr Yap.

For high-end private properties, prices are less affected by future MRT lines, like Bukit Timah's Tan Kah Kee station.

"Such buyers can mostly afford cars," said property agent P. K. Soh.

For more my paper stories click here.