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This is why the north-east is a hotspot for foreign property buyers this year

fiona.ho@edgeprop.sg

Demand from foreign property buyers is growing and the bulk of these buyers are turning their attention to the north-east.

In 2017, properties within district 19 (Serangoon Garden, Hougang, Punggol) saw the highest level of demand from buyers of foreign nationalities. In this article, we will look at a few factors that are driving this trend.

Stars of Kovan is one of the most in-demand properties in the north-east this year.

 

1) Attractive investment opportunities

Residential properties in the Rest of Central Region (RCR) and Outer Central Region (OCR) have become attractive investment opportunities due to various factors, including the rejuvenation of suburban localities, the establishment of new growth corridors, schools, MRT stations and key regional centres, which could all have a positive influence on home values.

New launches in several locations in the north-east, which will be linked by an upcoming MRT line (more on this below), presents buyers with such opportunities for capital growth and potential for rental yields.

Incidentally, the bulk of private residential unit sales within district 19 came from new project launches, according to statistics by the Urban Redevelopment Authority (URA).

Sales transactions at Kingsford Waterbay and Stars of Kovan collectively made up about 25% of all property sales transactions among foreign buyers and buyers who are PRs within district 19 this year.

 

2) Desirable price range

URA statistics showed that the majority of foreign property investors, which include investors from China, Malaysia and India bought properties priced between $500,000 and $1 million this year. Based on these transactions, we can deduce that properties within this price range are among the most highly sought-after among foreign investors in Singapore.

Between 2012 and 2017, properties within this price range are most commonly transacted within the Hougang area, at about 50% more than sales transactions in neighboring Serangoon and 80% more than Punggol. Properties under $1 million are also more commonly transacted within Hougang compared to areas in surrounding districts, including Ang Mo Kio, Bishan, Geylang and Toa Payoh over the last five years.

Unsurprisingly, properties in Hougang saw the highest level of sales transactions among foreign buyers and buyers who are PRs within district 19 this year. They accounted for roughly 61% of sales transactions among these buyers in the north-east district.

This is followed by Serangoon properties, which accounted for 16% of sales transactions, and Sengkang properties, which made up 12% of property sales among foreign buyers and buyers who are PRs in district 19 this year.

 

3) Easy accessibility and connectivity

Outside the prime districts, property hotspots for foreign buyers are largely located along MRT lines, which provide travel convenience. If they’re buying property to let, proximity of these locations to public transport, especially MRT stations, would be an important consideration as many tenants do not own private vehicles.

For instance, properties along the North-East line was a huge hit among foreign buyers in 2016. Popular projects along this MRT line in the previous year include Sturdee ResidencesForest Woods and The Poiz Residences.

The upcoming expansion of the MRT network will increase connectivity and cut journey times for residents in the north-east, which could be a pull factor that has led investors to purchase properties in the region.

The Thomson Line (TSL), which will be opened in phases starting from 2019, will link key areas in the north-east such as Lentor and Mayflower with the Central Business District (CBD).

Meanwhile, 2030 is expected to see the extension of the North East Line to Punggol North. Coupled with the addition of more trains, this will improve the accessibility of new growth areas and reduce peak-hour waiting times.

The  (CRL), also expected to commence operations then, will connect many areas in the north-east, including Ang Mo Kio and Punggol, to the eastern and western parts of Singapore.

Besides the enhanced rail network, residents in the north-south region will also benefit from increased bus capacity under the Bus Service Enhancement Programme, as well as the completion of a new integrated transport hub (ITH) in Hougang and a new bus interchange at Buangkok.

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