On Dec 27, it will be a year since the Downtown Line 2 commenced operations. The pick-up in prices of HDB flats located near DTL2 stations underscores the elevated convenience that residents now enjoy.

At these HDB blocks, the average resale price of a four-room flat climbed from $540,089 in 2015 to $563,456 this year, based on data up to early December. For a five-room flat, the average price went up from $615,706 to $633,328. The flats are at 1-19 Toh Yi Drive and 181-185 Jelebu Road, as well as some blocks on Gangsa, Petir and Senja roads.

Overall, resale prices of four-room flats in these blocks have risen 51% since 2008, when the station locations were unveiled. Those for five-room flats gained 48%. In comparison, the island-wide resale prices for four- and five-room HDB flats were up by only 41% and 34%, respectively, over the same period. The HDB Resale Price Index, which is not segmented by flat types, rose 48% between 1Q2008 and 3Q2016.

The flats’ price premiums over the island-wide average also appeared to widen about three years ahead of the stations’ opening. The price premium for a four-room flat rose from 17% on average between 2002 and 2011, to 20% between 2012 and 2015. The average premium for a five-room flat jumped from 9% to 20%.

Stretching 16.6km from Bukit Panjang to Rochor, the DTL2 has reduced commuting time for nearly 80% of its passengers, according to a statement by the Land Transport Authority earlier this year. A commuter who lives in Bukit Panjang and works near a Downtown station would now take 35 minutes to travel to work, instead of 60 minutes previously.

 

The impact of the DTL2 appears to be more pronounced on prices of HDB flats than those of condominiums since owners of the latter are more likely to own private vehicles and would be less dependent on the public transport network. The condos with high transaction volume near DTL2 stations are Maysprings, near Bukit Panjang station; Glendale Park and Hillview Heights, near Hillview station and Maplewoods, The Blossomvale and The Sterling, near King Albert Park station. Prices at these projects have moved in tandem with the general market trend.

Relief for older condos

Rents at older condos have been bearing the brunt of the supply influx as tenants took flight to quality. However, with the DTL2, rental declines in the vicinity of its stations have screeched to a sharp slowdown.

At Maysprings, for example, two-bedroom rents dipped 7% y-o-y in 2014 and 8% in 2015. After the opening of Bukit Panjang station, the decline in monthly rents decelerated to 2%, from $2,221 on average in 2015 to $2,187 in 2016. Maysprings is a 636-unit apartment which was completed in 1998.

At Glendale Park, monthly rents for two-bedroom units inched up from $2,449 in 2015 to $2,510 this year, an improvement from the 8% y-o-y decline in 2015. Similarly, two-bedroom rents at Hillview Heights picked up slightly in 2016 from $2,309 to $2,365 a month after tumbling 7% y-o-y in 2015. Both projects are a stone’s throw from Hillview MRT station and HillV2, a 54,000 sq ft lifestyle mall housing close to 30 tenants including Cedele, Cold Stone Creamery, Dean & DeLuca, Joyden Canton Kitchen, Starbucks and Wine Connection Bistro. Glendale Park is a 448-unit condo completed in 2000, while Hillview Heights comprises 360 units completed in 1996.

 

According to the latest statistics released by the URA on Oct 28, rental decline for private, non-landed homes accelerated to 4% y-o-y in 3Q after declining 3% in 2Q. The mass market, or Outside Central Region (OCR), was the worst performer as rents declined 6.5% y-o-y in 3Q.

Separately, rents for four-room HDB flats near Bukit Panjang MRT station were unchanged from last year, averaging $1,995 a month. Rents for five-room flats, however, inched up from $2,111 a month to $2,137. The higher rents were limited to these blocks as four- and five-room rents for the entire Bukit Panjang town were down 2% and 4%, respectively, from a year ago.

Projects near future stations

Phase 3 of the DTL is due to be completed next year. Without expecting a bumper payout, properties near future stations may offer defensive-play opportunities while the property market is mired in a prolonged slump.

Several condos at Bedok Reservoir will be within 400m of the upcoming Bedok Reservoir station — Aquarius by the Park, Baywater, The Clearwater, Waterfront Key and Waterfront Waves. Among them, Baywater and Waterfront Key will be closest to the station. There were only two transactions at Baywater this year. Both involved large units of around 1,300 sq ft, with an average price of $1.17 million, or $902 psf. Baywater is a 99-year leasehold 232-unit condo completed in 2006. At Waterfront Key, nine units changed hands this year at an average price of $1,083 psf. The most affordable deal accrued to an 850 sq ft unit, which sold for $1.01 million, or $1,182 psf.

HDB blocks nearest to a DTL3 station include 661-663 Jalan Damai; 72, 74 & 93 Geylang Bahru; 451 & 452 Tampines Street 42; 226, 228 & 229 Tampines Street 23; 932 & 933 Tampines Street 91; and 620 Bedok Reservoir Road.

There could also be opportunities along the upcoming Thomson-East Coast Line which will be completed in stages from 2019. Outside the prime districts, major new condos that will be closest to TEL stations include St Patrick’s Residences, Marine Blue, Seventy Saint Patrick’s, Coralis and The Line @ Tanjong Rhu.

For HDB flats, blocks that will be closest to a TEL station include 83 & 87 Marine Parade Central; 57 Marine Terrace; 541 & 542 Woodlands Drive 16; 401-408 Sin Ming Avenue; and 105- 107 and 112-116 Ang Mo Kio Avenue 4