Investing in a landed property is a big deal and the high price which is attached to it will make buyers winch in pain.
Other than having complete privacy and enjoying life staying in one, it is equally important that the land appreciates for generations to come.
I’ll compare some known landed areas in regards to capital appreciation. I will base our results on a 10-year time frame. Comparing less than 10 years will not reflect the buy-to-hold mentality that many landed property owners hold.
Besides, analyzing a period of greater than 10 years will not be accurate due to the Additional Buyers Stamp Duty (ABSD), which I’ll elaborate on later, and it also does not make a compelling argument.
I say this because of this statement; “landed properties will always appreciate due to its limited, decreasing supply”. As this famous adage, comparing a period of more than 10 years will make this article moot.
Before we proceed further into the article, are you interested in finding your dream landed property, or need a second opinion on a property that you have been eyeing on? I’m an agent with a keen interest in landed properties, and I believe that I am the right person to advice as such.
Contact me (Joshua) at +65 96329840 or send your queries to estatemagnates@gmail.com! I love to connect with like-minded individuals!
This comparison will be strictly a % vs % analysis, followed by my interpretation of the numbers.
However, here are some pointers which will not be emphasized, but do take note on them.
Some landed estates have a larger supply/landmass, and might represent higher volume. But this should not affect average PSF too much.
Land tenure. some landed estates might have more land with leasehold than freehold/999-year tenure, so PSF might be suppressed.
Some landed estates have a higher concentration of detached plots rather than its smaller counterparts (i.e., terrace houses). In this instance, the average PSF will be lower as price quantum will take precedence.
Broad Overview of The Landed Estates
For this case study, our reference point will be from Watten Estate. The reason why I chose this location as a reference point is that Watten Estate has a strong background as a residential enclave for the rich, and will most likely be owner-occupied.
Owner-occupied properties present the best reflection of Singapore‘s real estate market in terms of stable growth as these properties tend not to be speculative. Watten Estate should provide the most accurate analysis in terms of residential landed property supply/demand, and good capital appreciation should “technically” be justified by stable growth in robust conditions.
Watten Estate has the highest PSF out of all the other landed estates. This will mean that these homeowners do have financially deep pockets, and to put it succinctly, make wiser investments than the average joes.
However, there are some negatives on choosing Watten Estate as a reference point. Some level of speculation is required by real estate investors to create a dynamic market. Also, as Watten Estate property owners are extremely wealthy, they might be willing to pay above valuation/indicative price for a property that they like.
As the ABSD was first introduced by the Singapore Government on 8 December 2011, we feel that comparing data from 2012 up till present day will reflect the most accurate sentiments, which will remove a large portion of speculative purchases before ABSD implementation.
These comparisons were done on 13th January 2021 and will be accurate up till date.
The above two-line charts represent some of the most interesting landed estates. These estates will be compared with Watten estate.
Braddell Heights Estate
Avg. PSF Appreciation from 2012: 5.67% (Braddell Heights Estate) vs 10.40% (Watten Estate)
Comments: Nothing much that is noteworthy here, Braddell Heights Estate price growth might not be as aggressive as the other landed estate. Braddell Heights Estate’s road networks are not as well connected with multiple exit routes, which might be hindersome.
Kembangan Estate
Avg. PSF Appreciation from 2012: 14.88 % (Kembangan Estate) vs 10.40 % (Watten Estate)
Comments: Speak to all my clients and most of them will know that I always speak favourably about Kembangan Estate. Some of the houses are located close to Kembangan MRT and that makes it very convenient for its owners.
In comparison to Frankel Estate, more on that later, average PSF for Kembangan Estate is far below Frankel Estate. Kembangan Estate also shows strong price appreciation as compared to Watten Estate, which makes it a worthy contender.
A minor gripe will be that there are numerous temples located within Kembangan Estate, which might influence some purchases.
Sennett Estate
Avg. PSF Appreciation from 2012: 13.24% (Sennett Estate) vs 10.40 % (Watten Estate)
Comments: Not much is heard about Sennett Estate, but the area is prone to flooding as it is located in previous swampy areas. Since it is continuously inhabited by its residents, drainage improvements are heavily limited.
Similarly, Watten Estate does experience flash floods too, but drainage improvements have been consistently made to mitigate this risk.
Frankel Estate
Avg. PSF Appreciation from 2012: 21.14% (Frankel Estate) vs 10.40% (Watten Estate)
Comments: Frankel Estate have always been very popular with landed home buyers and the data have proven so. Its strong capital appreciation of almost 21.14% is equally backed with a high transaction volume, with no signs of it slowing down. To it can be almost compared to the ~24% price growth of what most new launch condominiums will experience in 3 years!
However, Frankel Estate can be considered a huge estate as it overlaps with Opera Estate, and the combination of both transactions might falsely misrepresent strong demand.
Also, boutique developers traditionally have a strong presence in Frankel Avenue, which can be promising if you have a property within the area. Properties prices will be supported due to strong redevelopment of the area. However, the opposite can occur too when bargain hunters are unfairly justifying a low purchase price of your property due to its “unmaintained” condition.
Hillview Garden Estate
Avg. PSF Appreciation from 2012: 12.60% (Hillview Garden Estate) vs 10.40% (Watten Estate)
Comments: The price spike in 2015 was contributed by a single sale in March 2015 from a detached home in Jalan Remaja at $1,448 PSF. This makes me wonder if there is a strong hidden demand for new homes in Hillview Garden Estate?
The launch of Hillview MRT on 27 Dec 2015 may have contributed to price growth, as previously the estate was highly inaccessible by public transportation.
Teacher’s Housing Estate
Avg. PSF Appreciation from 2012: 8.72% (Teacher’s Housing Estate) vs 10.40% (Watten Estate)
Comments: It does not fair highly among the other landed estates mentioned in this review but still deserves a mention due to its affordability. However, it seems that there is little demand for the area.
Thomson Garden Estate
Avg. PSF Appreciation from 2012: -0.13% (Thomson Garden Estate) vs 10.40% (Watten Estate)
Comments: Thomson Garden Estate is the only landed estate with negative growth, and really, it comes with no surprise due to the lack of amenities. The Hillview Garden Estate similarly has this problem previously and only with Hillview MRT opening in late 2015, did we see price growth.
This should be rectified in due course with the release of the Upper Thomson MRT, and savvy investors might be interested to look into this opportunity.
Serangoon Gardens Estate
Avg. PSF Appreciation from 2012: 15.75% (Serangoon Garden Estate) vs 10.40% (Watten Estate)
Comments: Serangoon Gardens have always been widely popular by landed property buyers and this is easily reflected within the transaction volume data. However, it is unusual that the % growth does not accurately reflect this data. In my opinion, % growth should be around ~18%.
Serangoon Gardens Estate also has strong support from real estate developers, which makes it all the more puzzling. This is verifiable with a quick search on Property Guru, where there is strong marketing for these new units by real estate salespersons.
I don’t have an answer for this, but my hunch is that new supply within the estate might be above what buyers are willing to pay for and most will rather opt for resale units.
Conclusion
Investing in landed properties are generally a very safe investment if you are able to find a good entry price. However, there might be other financial instruments if you are intending to make fast gains. Purchasing a piece of landed real estate, however, will give you a peace of mind (i.e., you can see it!) and enjoyment of the land, which not all instruments can provide.
A good way to observe if a landed estate is worth investing in is to monitor the activity of real estate developers. Their activities within the area will act as a stimulus in breaking new price barriers, so that your real estate investment can come along for the ride.
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Interested in finding your dream landed property, or need a second opinion on a property that you have been eyeing on? I’m an agent with a keen interest in landed properties, and I believe that I am the right person to advice as such. Contact me (Joshua) at +65 96329840 or send your queries to estatemagnates@gmail.com! I love to connect with like-minded individuals!
The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee, or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.