They can save 20 per cent on home prices and area is fairly central
The Straits Times - July 7, 2012
By: Amanda Tan
SAVVY home buyers, including expatriates on tight budgets and unable to afford the expensive city centre, are looking to nearby Balestier as a handy substitute.
Balestier homes can be 20 per cent cheaper than some nearby prime areas, yet are still fairly central, experts said. The area is also starting to shed its messy, occasionally seedy, image.
Various new condominiums like Nova 88 have sprung up in the past year, adding more than 400 new homes to the eclectic tenant mix of shophouse eateries, hardware shops and contractors.
A further 1,400 new homes will be ready by 2015, said Colliers International director of research and advisory Chia Siew Chuin.
Project sales are healthy. For example, Far East Organization's Vista Residences at Jalan Datoh has only eight units left. These are four-bedroom penthouses priced at about $1,800 per sq ft (psf), which works out to about $4.3 million for a 2,390 sq ft unit.
EL Development's Skysuites 17, launched last year, has one penthouse left. Units sold at an average $1,400 psf; a three-bedder cost $1.4 million - in line with the $1,200 to $1,500 psf median selling price of launches in the area, experts said.
But this is lower than launches in nearby Novena, in prime district 11, which are fetching some $2,000 psf.
Rental yields in the two areas are on par at 3.3 to 4 per cent said DWG senior manager of research and consultancy Lee Sze Teck.
Rents in Balestier have edged up this year, Ms Chia noted.
Median monthly rents stood at $3.35 psf in April and May, up from $2.98 psf in December.
Freehold condo resale prices are 15 to 20 per cent lower than in Novena and 7 to 10 per cent lower than in Toa Payoh, said R'ST Research director Ong Kah Seng.
One factor attracting investors and expats is the plethora of shoebox units, especially at small to mid-sized condos like Okio.
At Skysuites 17, about half of its buyers are investors. About 40 per cent of units there are under 500 sq ft, said EL's managing director Lim Yew Soon.
Consultants said Balestier's old world charm, good food and attractions like Zhongshan Park, make it appealing to buyers and tourists, boosting its vibrancy.
The park opened last year and is near two hotels - Days Hotel Singapore and Ramada Singapore.
Mr Lee said the area 'has shed most of its undesirable image'.
In 2002, the Urban Redevelopment Authority recognised Balestier Road as rich in cultural and built heritage.
However, experts said the lack of an MRT station and a tenant mix that includes budget hotels could put some people off.
'The old though increasingly rejuvenated feel may not be readily favoured by all occupants so owners have to adopt fairly realistic rental pricing to be attractive,' Mr Ong said.
A 44-year-old American who rents a two-bedroom unit at Casa Fortuna for $3,600 a month said he expects his landlord to increase the rent after his lease runs out.
The IT manager said: 'I would've liked to live closer to the city, but this was already considerably more than what I had hoped to pay, which is about $2,000.'
Indonesian investor Bernard Chow, 33, recently bought three units at Cradels for about $1.8 million in total. 'It is less than five minutes to the city area, where prices are at a peak,' said the businessman, a permanent resident.
He feels rental demand will hold up as more foreigners come here to work. They are also less likely to buy, given the 10 per cent additional buyer's stamp duty.
'The price is reasonable... When you invest you want to choose an area where there are fewer developments so there's room for growth,' he said.
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