We usually have this common understanding that properties near MRT stations will call for a higher price, but is that really true? If it is, to what extent?
In this article, we are going to discuss the accurateness of this assumption and the different factors affecting the price of properties, in specific, non-landed private properties, near MRT stations. Moreover, as the Thomson East Coast MRT Line is gradually completing in the next few years, what impact does it have on the property market then?
Generally, properties within a certain distance from an MRT station may enjoy a premium price. According to a research by Diao Mi, Delon Leonard and Sing Tien Foo, researchers from School of Design and Environment at the National University of Singapore revealed that the opening of Circle Line increases the value of non landed private houses within 600 metres by an estimated of 8.6%.
In recent years, the transport infrastructures in Singapore have been improved and upgraded, for instance, the introduction of new MRT Lines, like the latest anticipated Thomson-East Coast MRT that will gradually open between 2020 to 2040. Meanwhile, the Singapore government aims to have 8 in 10 households to live within a 10-minute walk to an MRT station by 2030.
Thereupon, many households have improved accessibility to the other parts of Singapore. However, properties near MRT stations may lose their distinct advantage in pricing they commanded in the past.
In the light of the prevalence of MRT stations, properties near an MRT interchange will hold a higher value as they enjoy a more efficient network with lesser train transfers between lines. Based on the aforementioned studies, properties near interchange stations have an additional increment of around 4%.
However, this may not be the only factor influencing the prices of properties near an MRT station. Connectivity in the area prior to the opening of the station is one of the key factors to take into consideration too. If the area had no MRT stations beforehand, meaning residents had to depend either on public buses or private transportation, the value of the MRT station will be reflected on the price jump in the condominiums nearby.
Distance to City Centre is another important factor. The closer it is to the central area like Orchard, City Hall, the higher the property prices. The price between central and non-central can differ by up to 2.5 times. However, other than the city, there is a rising number of business clusters in Singapore like Paya Lebar, Buona Vista and in particular, Jurong East, the 2nd CBD in Singapore. The properties in these areas may probably call for a higher price in the near future when infrastructures are completed and connectivity further improved.
Besides, there may not be any real increase in property prices until construction is complete. In the meantime, prices of home value may even decline due to the uncomfortable living environment resulted from noise pollution and air pollution. Nonetheless, after the completion of the line, property prices are most likely going to rise.
The following pictures are the per square feet prices of 5 year new non landed private properties within 500 metres to MRT interchanges. (Data updated by August 2020)
From the data, we can see that private properties near MRT interchange usually command at least $1500 psf to $1600 psf. Unsurprisingly, the priciest property is in Orchard and City Hall, at $3,907 psf and $3,273 psf respectively. Whereas neighbourhoods further away from the central areas usually have their prices ranging from around $1500 psf to $1600 psf onwards.
In a nutshell, having an MRT station nearby does affect the home value to a certain extent. However, the value of having only one MRT line around may dampen in the near future. Being near an interchange will be more sought after and the price premium may be higher. Other than this, distance to city centre, amenities and when construction will be completed, will play a part in influencing the price fluctuation.
* Do note that data is collected from only one condominium in below stations. (Only these condominiums fit the criteria of 5 year new and 500m close to an interchange.)
- Cityhall – South Beach
- Orchard Road – 3 Cuscaden
- Dhoby Gharu – Haus on Handy
- Marina Bay – Marina One Residences
- Chinatown and Outram Park – One Pearl bank