THE REAL DEALS - Ins & Outs of Singapore Real Estate

The Downtown Line (DTL) is the fifth Mass Rapid Transit (MRT) line in Singapore. It facilitates direct travel
from the northwestern and eastern parts of the island to the Central Business District and Marina Bay. The
DTL will be built in three stages. Stage 1 enhances accessibility within central Singapore and will be
completed in 2013. Stage 2 connects central Singapore with the Bukit Panjang‐Bukit Timah corridor in the
northwest and is targeted for completion by 2015. Stage 3 is the Eastern Region Section and final stretch of
the DTL and completion is expected by 2017. When fully operational, the Land Transport Authority projects
a daily ridership of more than 500,000 people.
Market watchers are predicting a price hike for properties near the upcoming MRT stations along the DTL,
given the enhanced accessibility and possible sprouting of new amenities, such as shopping malls, around
the area. In this issue, we uncover the upside opportunities from the opening of a new MRT station and
examine the property picks in estates near the locations of the DTL Stage 2 stations. To determine the
impact of improved accessibility on the price of a property, we study the trend for Boonview, a project
near the Circle Line’s Marymount MRT station which opened in May last year.
Boonview (Freehold)
This seven‐year‐old freehold project is just a five‐minute walk away from the Marymount
MRT station. Transaction prices were closely tracking the broad condo price index until
about three months before the station opened, when a divergence started to develop
before prices stabilised at approximately 15% above the index. We reckon that this 15%
increase in property value is the result of the new transport infrastructure, and we will
subsequently use this 15% as the estimated gain by buyers of properties near the upcoming
DTL stations.


Blossomvale (999‐year)
Less than 300m away from the King Albert Park MRT station, this 12‐year‐old, 999‐
year leasehold project comprises 220 units ranging in size from 840 sq ft to 1,950
sq ft. Transaction prices are currently tracking the broad index closely, a sign that
they have yet to factor in the future station. Buyers of this property can expect an
additional 15% increase in price nearer the completion of the MRT station.



Glendale Park (Freehold)
This freehold project is a mere 200m from the Hillview MRT station. Completed in
2000, it has 448 two‐ to three‐bedroom units. Transaction prices are slightly below
the broad index, though moving parallel to it, suggesting that the future
improvement in transport infrastructure has not yet been priced in. Investors can
expect an additional 15% upside nearer to the opening of the MRT station.


Hazel Park Condominium (999‐year)
This 999‐year leasehold project is slightly more than 300m away from the future
Cashew MRT station. It has 696 units ranging in size from 980 sq ft to 1,950 sq ft.
Prices are trending along with the broad index with a consistent gap and
therefore do not appear to have priced in the MRT station. Buyers of this
property can potentially reap an additional 15% return on their investment.


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