The good locations for property investment in Singapore.

Singapore is the most expensive city in the world. The cost of housing is one of the contributing factors to the high cost of living. Property is a very popular form of investment in Singapore. Coming from Singapore, I am often asked by foreigners, and sometimes by locals, about where are the good locations for property investment in Singapore.

Singapore’s national urban planning authority of Singapore is the Urban Redevelopment Authority (URA). The URA determines which areas in Singapore are used for what purpose. The good thing about this is that it makes investing in Singapore real estate that much easier. There are areas of growth which will be outlined by the URA. Land use will be optimised through careful urban planning and the use of the various plots of land can be found in the URA’s Master Plan. This is a statutory land use plan which guides Singapore’s development in the medium term over the next 10 to 15 years. This Master Plan is reviewed every five years and can be found on the URA’s website. The URA divides Singapore’s private residential property market into 3 geographical market segments. The Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR). Adhering to these segments may give you a brief idea of where the good locations in Singapore are but we need to analyse deeper to identify growth potential as investors.

 

 

Prime Areas

These are the best of the best. The wealthiest people live here. The properties in these areas are the most expensive in terms of price per square meter. If you believe that Singapore property is a good investment, you should always consider these areas as these areas move in tandem with Singapore’s growth. They are the blue chips in property investment in Singapore. Let us break them down to understand the prime market better.

 

The Orchard Area

This is perhaps the focus of many property investors, local and foreign. Thus I have broken Orchard Road down further into three areas.

Orchard Road

This location is indisputably the most prime area in Singapore. Properties around Orchard MRT Station are the most expensive in Singapore in terms of price per square foot. The bulk of the owners and tenants are mainly wealthy foreigners. If you are looking to purchase a property here, be prepared to pay top dollar. In return, you will get one of the best properties money can buy in one of the safest and most developed cities in the world. There is a development sitting right on top of Orchard MRT Station, Orchard Residences. That is a 99-year leasehold property right above Singapore’s iconic ION Shopping Mall. If you are looking for a freehold property, Twentyone Angullia Park is just diagonally across the road. In 2013, a 34th-floor penthouse unit at the development was sold for SGD$42.9 million. That worked out to be about $5,560 per square foot. Right next to Twentyone Angullia Park are developments along Paterson Road like The Paterson Edge and The MARQ on Paterson Hill which command prices north of SGD$3,000 per square foot. Recent positive sentiment in the property market may propel prices higher in the near future.

 

Ardmore Park

This location is just a stone’s throw from Orchard Road. It is more residential and just slightly away from the hustle and bustle of Orchard Road. The developments in this area are extremely high-end and cater to the ultra-wealthy. If you are looking to live in the heart of Singapore and yet want a residential feel to your surroundings, this is the area to purchase. Just this year, a unit at Sculptura Ardmore, a freehold condominium along Ardmore Park, was transacted for more than SGD$60 million. This is perhaps the highest priced property transaction in Singapore. This trumped the previous record set two years ago when in 2015 a 32nd-floor penthouse unit at Le Nouvel Ardmore was sold for SGD51 million. There is a top school Raffles Girls’ Secondary School, nearby. The surrounding areas like Claymore or Draycott are also extremely upmarket.

 

Nassim Road

Many Singaporeans would remember this location as the most expensive property in an earlier version of Monopoly. This was also how I got to know about this area. The interest in the properties along Nassim Road has remained strong all through these years. Nassim Road is situated extremely near the Orchard Road shopping belt and the properties in this area are low rise, low-density developments. Nassim Road also leads into the prestigious Bukit Timah area which is one of the most prime landed property zones in Singapore. Back in April 2015, a 5th-floor unit at Nassim Park Residences was sold for SGD$22.5 million.

 

Sentosa

This is the only area where foreigners are allowed to buy landed properties. Landed properties in Singapore are only reserved for Singapore citizens. However, the Singapore government allows foreign ownership of landed properties in Sentosa Cove on Sentosa Island. Sentosa is an island south of Singapore. It is located just outside Singapore’s Central Business District (CBD). The island of Sentosa is an extremely exclusive and you need a resident’s access card to enter the guarded and gated community. There are two golf courses on Sentosa Island itself. The Tanjong Golf Course and Serapong Golf Course. Prices have fallen off a cliff since the introduction of the property cooling measures in 2013 and have yet to recover. This location was perhaps the hardest hit from the cooling measures. Interest is starting to pick up again and units at developments like The Residences at W Singapore and The Marina Collection are starting to see some interest again.

 

My personal choice: A condominium in Orchard Road. It is really about the snob effect when it comes to owning a property in Orchard Road. A condominium or landed property in Sentosa Cove takes second place. Waking up to an open sea on a daily basis would be awesome.

 

Near Prime Areas

I would say that these areas are around the prime areas that I just mentioned. They are perhaps one or two MRT stations away from where we just discussed. Traditionally when people think of the most prime areas, they immediately think of Orchard Road and Sentosa. However, these areas are holding strong in their own right. There are growth stories in these areas and if you are looking for good price appreciation and rental yield, some of these areas may do better than the prime areas we just discussed. This is because the premium for the prime areas has most probably been factored in.

 

Newton and Novena

If you drive it would take barely five minutes to get to Orchard MRT from Newton and Novena. I place the two together because they are very close to each other and they are very small areas. There is the famous Newton Hawker Centre along Newton Circus which is walking distance to Newton MRT Station. There is this extremely high-end development, Reignwood Hamilton Scotts and Sheraton Towers Hotel just next to Newton MRT Station as well. Novena is growing to become a medical hub. There are many specialist medical centres in Novena Specialist Centre. There is even an Oasia Hotel next to the Specialist Centre to support medical tourists. Mount Elizabeth Novena Specialist Centre and Mount Elizabeth Novena Hospital is also around the corner. The Novena area is also a very family-centric neighbourhood. There are many enrichment centres in the area. One of the malls in the area, United Square, is catered to children and families. There is a good primary school in the area, Saint Joseph’s Institution (SJI) Junior. Many ministers and Singapore’s previous president were alumni members of this school. The closest condominium to Novena MRT Station is Soleil @ Sinaran.

 

The Marina Bay, Tanjong Pagar and Bugis area

This is pretty much Singapore’s CBD. Properties in this area are not cheap and The Wallich Residence’s asking price of SGD$100 million is the highest ever in Singapore. This is for a three-storey penthouse complete with a private pool on the 64th floor of the tallest building in Singapore. The Singapore government has also seen the potential in this area and has co-developed Marina One Residences and Duo Residences with the Malaysian government through a joint venture between Singapore’s state-owned Temasek Holdings with Malaysia’s state-owned Khazanah Nasional Berhad.

 

Somerset, Cairnhill, Dhoby Ghaut and River Valley

For some particular reason, the properties here are slightly less premium as compared to Ardmore and Nassim. This is despite the fact that Somerset and Dhoby Ghaut are located along the Orchard Shopping Belt. However, demand for these properties is relatively strong from tenants. If you are looking buy to rent, properties around the Cairnhill area do attract good corporate tenants. The properties around Somerset and River Valley area are a little more residential. There is growth potential in the area around Killiney and Oxley Road. Singapore’s founding prime minister, Lee Kuan Yew, used to live in a detached house along Oxley Road. Since his passing, there is a possibility that there may be a revision of the high restrictions in the area.

 

Keppel Bay

This is the area just before you enter into Sentosa. These developments are fronting the coastline facing Sentosa. Many expatriates and wealthy locals live in these developments. They are also extremely easy to rent out as they are very centrally located. Harbourfront MRT and Telok Blangah MRT Stations make connectivity a breeze for people living in these developments. There are also a large number of offices located in Harbourfront. Large multinational corporations like Bank of America are situated here. It takes about five to ten minutes to get to the CBD. Vivocity Shopping Mall, one of the largest shopping malls in Singapore, is just around the corner. Projects like Corals at Keppel Bay and Reflections at Keppel Bay have very impressive views and architecture. You will get nice views of the docks and the sea and occasionally you can see large cruise ships pass by from a distance.

 

The area around Great World City Shopping Centre

This is still along River Valley Road. However, I feel compelled to isolate this area on its own because I truly believe in the growth potential here. There is a Thomson-East Coast MRT Line coming up and there will be a station next to Great World City Shopping Centre. This train station is just one stop away from Orchard MRT Station. The Thomson-East Coast MRT Line will intersect with the existing North-South MRT Line at Orchard MRT Station. This essentially will make Orchard MRT Station an interchange. The Thomson-East Coast Line links the east of Singapore to Orchard Road and runs all the way up north to Woodlands. This line will dramatically cut travelling times for people in the north and east of Singapore who are travelling to Orchard Road. This compels me to say that if you are looking for growth potential, you need to see past the current inconveniences like major road diversions and heavy construction in the area. Come 2024, when the Thomson-East Coast MRT Line is fully operational, this will add significant value to the properties around this area. You may start to see growth very soon already as the line will open in phases and the first phase is slated to be opened in 2019. Interest in properties in the area has spiked recently. There are some new launch developments which have revised their prices upwards significantly. One example is m5 @ Jalan Mutiara. The developer took the units off the market and increased the price significantly a month later.

 

My personal choice: A landed property or a condominium in Novena. A serene environment with adequate amenities and excellent connectivity. I am perplexed as to how underrated Novena is as a prime district. A 5-minute drive is all it takes to get from Novena to Orchard Road or Bugis. Coming in second would be the area around Great World City. The growth potential is very compelling.

 

 

Premium Residential Areas

These areas are extremely desirable among the wealthy Singaporeans as well as the expatriate community. There are many wealthy individuals who are living in these areas. They choose to live in these areas due to its excellent connectivity to the city as well as the pleasant environment.

 

East Coast

This area includes places like Katong, Marine Parade and the area near Fort Road and Tanjong Rhu. This is a very large area but then the community tends to be the same across this area. Katong is famous for its chic bars and restaurants. There is perhaps the widest array of food choices and bars in this area. There are two good community malls in i12 Katong and Parkway Parade which is along the next parallel street, Marine Parade. Walking to East Coast Park takes about 5 to 10 minutes and involves going through an underpass to get to the park. You can jog or cycle further east and the park will connect you to Pasir Ris and Changi or you can go towards the south which will take you to the Marina Bay area. There is the East Coast Expressway (ECP) and it all it takes is a 10-minute drive to get to the city. During non-peak hours I have driven from Suntec City to Katong in under 10 minutes. Majority of the properties around Katong are freehold. There are some new developments in the Marine Parade area which are selling well. One of the more recent condominiums to come up is Seaside Residences. As the properties facing the sea are built on reclaimed land issued by the government, these are usually 99-year leasehold properties. Demand in this area is picking up significantly. Demand for this area has traditionally been strong but because of the upcoming Thomson-East Coast MRT Line, demand in this area has recently gone up a couple of notches. The Fort Road and Tanjong Rhu area is also a very good area to buy a property. It is very close to Singapore’s National Stadium and Sports Hub and is a very serene environment to live in. You can take walks along the Kallang River and recently, the Singapore government announced plans to rejuvenate the area.

 

Bukit Timah and Holland Road

Bukit Timah is perhaps the area in Singapore with the highest concentration of good schools. This is also a place with a huge concentration of landed properties. It is also home to many good class bungalows. Travelling to the city centre is extremely convenient now that the Downtown MRT Line has opened. It takes about 10 minutes by train to get to the Chinatown area. The condominiums are usually lined along the main Bukit Timah Road with the landed properties further inside. Holland Road is one major street away from Bukit Timah Road and has a very strong expatriate vibe to the area. Holland Village is a very popular area to have a good meal and some drinks in the evening. Now that there is a train station in Holland Village itself the connectivity of the area is much better. It is also close to Singapore Polytechnic and the National University of Singapore. The people who stay in the Bukit Timah area are usually the upper-class Singaporeans since there is a large number of landed properties in the area. There is strong demand from expatriate tenants when it comes to renting the condominiums along Bukit Timah Road and Holland Village but you will still see more locals than foreigners in this area as compared to Orchard and Ardmore.

 

Tiong Bahru, Queenstown and Redhill

Recently there has been a lot of developments coming up in this area. I personally think that it is going to be some oversupply in the area. Connectivity to the city centre is excellent. The East-West MRT Line connects these areas to Tanjong Pagar, Raffles Place City Hall and Bugis by MRT. Thus if you are working in Singapore’s CBD, living in these areas will make your life extremely convenient. Also, these areas are very close to housing estates and with that come amenities like supermarkets and food centres. I do think that properties in this area will remain extremely easy to rent out. I personally like a development in the area called Queens Peak. It will have direct access to Queenstown MRT. This is literally MRT at your doorstep.

 

My personal choice: A landed property in Katong or a condominium facing the sea in East Coast. In terms of connectivity, it is perhaps rather inconvenient if you are not driving but the Thomson-East Coast MRT Line will be a major game changer. The number of good food outlets is staggering and the expatriate demand is extremely strong even though current connectivity to the city via public transport is not the strongest. The upcoming train line should boost connectivity and fuel demand to an already popular area.

 

 

Growth Areas

These areas are up and coming. There are government-led initiatives to develop these areas. The Singapore government takes urban planning very seriously and when it announces the development of a new town, it goes through extensive efforts to ensure that there are adequate infrastructure and population growth to sustain these areas.

 

Jurong

I would say that this area is already fulfilling its potential. The plan to make Jurong Singapore’s second CBD is already bearing fruit. Moreover, the station for the high-speed rail linking Singapore to Kuala Lumpur will be located in Jurong. Many multinational corporations have already set up their offices in Jurong. Jurong has developed into a self-contained town. Amenities wise it has major malls like Jem, J Gateway and Big Box. It has a community hospital, an international business park and hotels in the area.

 

Paya Lebar

This area has been getting a lot of interest in the past year. The Singapore government announced that they will close down the 800 hectare Paya Lebar Airbase in 2030. In its place will be the development of a new township. The area around Paya Lebar MRT is also developing very quickly. Office buildings have sprung up and developers like Australian-listed Lendlease have come in to develop commercial and residential buildings. Their recent residential development, Park Place Residences, sold out its first phase within a day. Paya Lebar is extremely accessible. It is about 10 minutes away from the CBD. The URA has included the development of Paya Lebar Central into its Master Plan. They have outlined plans to make this area a vibrant commercial hub.

 

Woodlands

Due to its close proximity to Johor Bahru, Malaysia, Woodlands has always been seen as a gateway to Malaysia. Come 2024, there will be an MRT station in Johor Bahru, further connecting Singapore to Johor Bahru. Home prices and rents have been steadily increasing. There is a regional hub in Woodlands Central as well. The bulk of the tenants are usually Malaysians who come across the border into Singapore to work. They rent in this area due to its proximity to Malaysia as well as the fact that rents in Woodlands are much cheaper than in the city centre.

 

My personal choice: A condominium in Paya Lebar. Jurong has already developed and the demand for properties in Woodlands, be it for sale or rent, is usually driven by the fact that prices are more affordable in Woodlands. The Paya Lebar area is developing into a very chic area. Office rents in Paya Lebar Square are, in most cases, higher than those in CBD. Among the three, Paya Lebar is the closest to the city centre.

 

These areas should provide good value if you are looking for long-term capital gains or good rental yield. That being said, it is always prudent to purchase a property at the right price. You have to do your homework before you commit to a property as this is a large financial commitment. If you are a foreigner looking to invest in Singapore properties, this is perhaps one of the most transparent property markets in the world. Past transaction prices are readily available on the URA’s website and contracts are drafted in English. You would perhaps just need to engage a licensed property agent to assist you in your search.

 

Yours Sincerely,
Daryl Lum

 

Other articles which you may find useful:

A guide to purchasing a resale private property in Singapore

Guide to costs when buying a resale private property in Singapore

Guide to landed property in Singapore

How to make an offer on a private property

Buying a property near an MRT station

The good locations for property investment in Bangkok

Property Stamp Duties in Singapore

Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR)