Saturday, August 11, 2012

Tampines holds its own with attractive amenities

Straits Times: Sat, Aug 11

TAMPINES has stayed on the radar of home buyers despite stiff competition from a bumper supply of launches in other suburban estates.

The area - designated a secondary commercial zone after the central business district - has continued to attract buying interest largely due to its wide array of amenities and easy accessibility.

The presence of international schools such as the United World College of South East Asia and its proximity to the Changi Business Park and Seletar Aerospace Park have also caught the eye of investors looking for healthy rental yields.

Experts say home prices in Tampines have outpaced the national average due to pent-up demand from Housing Board upgraders and the relatively lower supply in the pipeline.

Developments in the area have enjoyed price gains of between 23 per cent and 53 per cent over the past two years, said Mr Lee Sze Teck, Dennis Wee Group's senior manager of research and consultancy.

Prices at The Tropica at Tampines Avenue 1, for example, have surged 30 per cent and those at former HUDC estate Tampines Court have rocketed 53 per cent.

That is a healthy premium over the nationwide average price increase of 21 per cent for private suburban apartments, according to the Urban Redevelopment Authority.

Tampines rental yields are between 4 per cent and 4.5 per cent, at the higher end of the typical 2 per cent to 4.5 per cent range found across the country, Mr Lee added.

Ms Chua Chor Hoon, DTZ head of Asia-Pacific research, noted that the area is well-served by three major shopping malls and transport links, including the East-West MRT line and the Downtown line, due to be completed by 2017.

Tampines Finance Park, which houses the backroom functions of some banks and insurance companies, is another economic driver.

Ms Chua expects demand for new launches to be supported by upgraders who want to stay within the area.

About 75 per cent of Tampines residents live in HDB four-room and five-room flats - a potential pool of buyers for new launches.

There have not been many new projects in the area so demand is likely building up.

Private condominium Waterview and executive condo projects The Tampines Trilliant and Arc at Tampines are among the projects launched in the past couple of years. All three are at least 70 per cent sold.

Two sites that can yield an estimated 1,200 units in total were sold earlier this year while three plots are on the reserve list of the government land sales programme for this half of the year. Confirmed list sites go on sale regardless of interest, while those on the reserve list are put up for tender only if developers make an acceptable initial offer.

While these supply numbers might seem significant, DTZ's Ms Chua said they are well under the number of units launched in other suburban estates.

For instance, 3,870 units can be launched from confirmed list sites in Punggol and Sengkang this year while Pasir Ris could see a further 1,430 units built. The Tampines confirmed list sites can yield only about 1,180 units. This relatively lower supply in the pipeline is likely to keep home prices stable, Ms Chua noted.

PropNex chief executive Mohamed Ismail added: "Being a mature estate, unlike newer townships, land parcels are limited in supply and do not come easy. As such, properties in Tampines are in greater demand."

Home buyers are then likely to pay slightly more compared with nearby estates, Mr Ismail said.

For instance, the median price of recent transactions at The Tropica in Tampines was $829 per sq ft (psf) and that of Whitewater in Pasir Ris was $766 psf.

This price premium over other suburban estates is likely to hold, he said.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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