New Reporter
17-08-23, 09:52
Homing in on hot property near good schools
Christine Sun
Aug 11, 2023
When it comes to snagging a coveted spot for your kids in the primary school of your choice, where you live matters a lot. With more spaces allocated for children without prior connections to a school (Phase 2C), balloting exercises have intensified across the island.
Living within a two to three km radius of a popular primary school no longer suffices. More Singaporeans living close to a school are subjected to a ballot, including those staying within one km. This is because families with no affiliation and who did not intend to apply to popular schools have changed their minds since they too can get a placement by moving closer to the schools.
Therefore, more families have resorted to purchasing or renting properties to gain an upper hand in the Registration Exercise.
This phenomenon has spread to non-mature housing estates where competition is stiffening at schools like Princess Elizabeth Primary School, Sengkang Green Primary School and Punggol Green Primary School, which were heavily oversubscribed.
With rising demand for homes near primary schools, rents and property prices have inevitably increased. Other buyers and tenants who wish to stay in the same areas are gradually priced out.
To provide a glimpse of how distance-based balloting has impacted the market, we studied the property prices and rental trends near 10 popular primary schools, including schools in newer housing estates.
Rental demand is resilient
Home rental is a popular option as the temporary address can be used to gain priority admission to highly sought-after schools. Ever since more spaces were allocated to Phase 2C, more schools had to hold ballots for earlier phases resulting in more families renting properties near schools.
Although families must reside at the address used for registration for at least 30 months from the start of the P1 Registration Exercise, many families still prefer to lease a property since the total rental cost is less than purchasing a new home.
Demand remains strong for rental units around popular schools despite rising rents. Based on our research study on rental transactions near 10 popular schools in Singapore, as many as 1,793 condos were leased within one km of these schools in the second quarter of 2023, data from the Urban Redevelopment Authority (URA) shows.
Although volumes have dropped 6.1 per cent from a year ago, they fared better than the overall market which contracted more sharply by 7.1 per cent from 20,226 units in the second quarter of 2022 to 18,790 units in the second quarter of 2023.
The rental volume of resale condos have instead risen from the second quarter of 2022 to the second quarter of 2023 in the vicinity of Princess Elizabeth Primary School (18.7 per cent increase), Pei Hwa Presbyterian Primary School (10.5 per cent increase), Nanyang Primary School (5.4 per cent increase) and Rosyth School (1.3 per cent increase).
Rents escalating around popular schools
Rents have risen at a faster pace for condos near certain schools. Data crunching of over 3,700 transaction records from URA showed that the median rents of condos within one km of all 10 schools increased by double digits by around 15.9 per cent to 36 per cent when we compare the second quarters of 2022 and 2023.
Condo rents within proximity to five of the 10 schools registered faster growth than their respective district median rents. For instance, condos within one km of Sengkang Green Primary School rose the most by 36 per cent from $2,500 per month in the second quarter of 2022 to $3,400 per month in the second quarter of 2023, more than the 29.6 per cent gain in District 28 (Seletar).
Condos within one km of Naval Base Primary School have similarly increased by 35.2 per cent over the same period, surpassing the 23.3 per cent increase in District 27 (Yishun and Sembawang).
For “elite” schools like Ai Tong School, condo rents within 1km of the school climbed faster by 31.3 per cent vis-a-vis 28.6 per cent in District 20 (Bishan and Ang Mo Kio), while those around Nanyang Primary School increased by 29.4 per cent vis-a-vis 23.5 per cent in District 10 (Ardmore, Bukit Timah, Holland Road and Tanglin).
Faster resale price appreciation for some locations
Fewer families bought resale properties around popular schools this year, possibly due to the new property cooling measures and rising mortgage rates. The number of resale transactions within 1km of the 10 schools fell by 30 per cent from the second quarter of 2022 to the same period in 2023.
However, resale prices of condos around the 10 schools have all risen, with five increasing faster than the resale prices in their respective districts.
For instance, the median condo resale price within 1km of Princess Elizabeth Primary School climbed the steepest by 51.5 per cent from $1,041 psf in the second quarter of 2022 (25 transactions) to $1,577 psf in the second quarter of 2023 (10 transactions), outpacing the 14.9 per cent gains for condos in District 23 (Hillview, Dairy Farm, Bukit Panjang, and Choa Chu Kang).
Prices of resale condos within 1km of Rosyth School similarly climbed by 19.2 per cent, faster than the 9.7 per cent increase in District 19 (Serangoon Garden, Hougang, and Punggol), while those around Tao Nan School rose faster by 12.8 per cent, compared with 7.4 per cent in District 15 (Katong, Joo Chiat, Amber Road).
Moving forward
We have conducted prior studies on how primary school proximity affected the property market. Although our sample sizes were not large, our on-ground observations corroborated with the data findings that distance-based Primary School Registration have a considerable impact on property prices and rents. The situation seems to have deepened in recent years.
Barring a global economic downturn or unforeseen circumstances, home prices and rents near popular schools are likely to rise since distance and nationality remain the main criterion for primary school admission. Further, families whose children have graduated from popular Primary Schools will resell or lease their properties at higher prices knowing that robust demand from future batches of applicants will prop up prices.
This sustained demand may confound the true impact of property cooling measures put in place to stabilise prices. Another area of concern is that the situation is spreading to newer housing estates and are affecting homes in the vicinity of non-top-ranking schools.
While the intent of adding more spaces to Phase 2C was to level the playing field to help more children obtain a place in a school near their homes, some Singaporeans living outside of 1km of some popular schools may still be displaced by those who can afford to buy or rent a home just beside the school.
To address this, perhaps the priority admission zone ring could be expanded to cover more homes or by allocating equal ballot chances for all children within two to three km of a school, thus negating the necessity to move right next to a popular school. This may help to slow the pace of property price growth, and moderate demand and impact on prices.
The writer is senior vice-president of OrangeTee & Tie Research & Analytics.
https://www.straitstimes.com/business/invest/homes-that-are-near-good-schools-are-hot-properties
Christine Sun
Aug 11, 2023
When it comes to snagging a coveted spot for your kids in the primary school of your choice, where you live matters a lot. With more spaces allocated for children without prior connections to a school (Phase 2C), balloting exercises have intensified across the island.
Living within a two to three km radius of a popular primary school no longer suffices. More Singaporeans living close to a school are subjected to a ballot, including those staying within one km. This is because families with no affiliation and who did not intend to apply to popular schools have changed their minds since they too can get a placement by moving closer to the schools.
Therefore, more families have resorted to purchasing or renting properties to gain an upper hand in the Registration Exercise.
This phenomenon has spread to non-mature housing estates where competition is stiffening at schools like Princess Elizabeth Primary School, Sengkang Green Primary School and Punggol Green Primary School, which were heavily oversubscribed.
With rising demand for homes near primary schools, rents and property prices have inevitably increased. Other buyers and tenants who wish to stay in the same areas are gradually priced out.
To provide a glimpse of how distance-based balloting has impacted the market, we studied the property prices and rental trends near 10 popular primary schools, including schools in newer housing estates.
Rental demand is resilient
Home rental is a popular option as the temporary address can be used to gain priority admission to highly sought-after schools. Ever since more spaces were allocated to Phase 2C, more schools had to hold ballots for earlier phases resulting in more families renting properties near schools.
Although families must reside at the address used for registration for at least 30 months from the start of the P1 Registration Exercise, many families still prefer to lease a property since the total rental cost is less than purchasing a new home.
Demand remains strong for rental units around popular schools despite rising rents. Based on our research study on rental transactions near 10 popular schools in Singapore, as many as 1,793 condos were leased within one km of these schools in the second quarter of 2023, data from the Urban Redevelopment Authority (URA) shows.
Although volumes have dropped 6.1 per cent from a year ago, they fared better than the overall market which contracted more sharply by 7.1 per cent from 20,226 units in the second quarter of 2022 to 18,790 units in the second quarter of 2023.
The rental volume of resale condos have instead risen from the second quarter of 2022 to the second quarter of 2023 in the vicinity of Princess Elizabeth Primary School (18.7 per cent increase), Pei Hwa Presbyterian Primary School (10.5 per cent increase), Nanyang Primary School (5.4 per cent increase) and Rosyth School (1.3 per cent increase).
Rents escalating around popular schools
Rents have risen at a faster pace for condos near certain schools. Data crunching of over 3,700 transaction records from URA showed that the median rents of condos within one km of all 10 schools increased by double digits by around 15.9 per cent to 36 per cent when we compare the second quarters of 2022 and 2023.
Condo rents within proximity to five of the 10 schools registered faster growth than their respective district median rents. For instance, condos within one km of Sengkang Green Primary School rose the most by 36 per cent from $2,500 per month in the second quarter of 2022 to $3,400 per month in the second quarter of 2023, more than the 29.6 per cent gain in District 28 (Seletar).
Condos within one km of Naval Base Primary School have similarly increased by 35.2 per cent over the same period, surpassing the 23.3 per cent increase in District 27 (Yishun and Sembawang).
For “elite” schools like Ai Tong School, condo rents within 1km of the school climbed faster by 31.3 per cent vis-a-vis 28.6 per cent in District 20 (Bishan and Ang Mo Kio), while those around Nanyang Primary School increased by 29.4 per cent vis-a-vis 23.5 per cent in District 10 (Ardmore, Bukit Timah, Holland Road and Tanglin).
Faster resale price appreciation for some locations
Fewer families bought resale properties around popular schools this year, possibly due to the new property cooling measures and rising mortgage rates. The number of resale transactions within 1km of the 10 schools fell by 30 per cent from the second quarter of 2022 to the same period in 2023.
However, resale prices of condos around the 10 schools have all risen, with five increasing faster than the resale prices in their respective districts.
For instance, the median condo resale price within 1km of Princess Elizabeth Primary School climbed the steepest by 51.5 per cent from $1,041 psf in the second quarter of 2022 (25 transactions) to $1,577 psf in the second quarter of 2023 (10 transactions), outpacing the 14.9 per cent gains for condos in District 23 (Hillview, Dairy Farm, Bukit Panjang, and Choa Chu Kang).
Prices of resale condos within 1km of Rosyth School similarly climbed by 19.2 per cent, faster than the 9.7 per cent increase in District 19 (Serangoon Garden, Hougang, and Punggol), while those around Tao Nan School rose faster by 12.8 per cent, compared with 7.4 per cent in District 15 (Katong, Joo Chiat, Amber Road).
Moving forward
We have conducted prior studies on how primary school proximity affected the property market. Although our sample sizes were not large, our on-ground observations corroborated with the data findings that distance-based Primary School Registration have a considerable impact on property prices and rents. The situation seems to have deepened in recent years.
Barring a global economic downturn or unforeseen circumstances, home prices and rents near popular schools are likely to rise since distance and nationality remain the main criterion for primary school admission. Further, families whose children have graduated from popular Primary Schools will resell or lease their properties at higher prices knowing that robust demand from future batches of applicants will prop up prices.
This sustained demand may confound the true impact of property cooling measures put in place to stabilise prices. Another area of concern is that the situation is spreading to newer housing estates and are affecting homes in the vicinity of non-top-ranking schools.
While the intent of adding more spaces to Phase 2C was to level the playing field to help more children obtain a place in a school near their homes, some Singaporeans living outside of 1km of some popular schools may still be displaced by those who can afford to buy or rent a home just beside the school.
To address this, perhaps the priority admission zone ring could be expanded to cover more homes or by allocating equal ballot chances for all children within two to three km of a school, thus negating the necessity to move right next to a popular school. This may help to slow the pace of property price growth, and moderate demand and impact on prices.
The writer is senior vice-president of OrangeTee & Tie Research & Analytics.
https://www.straitstimes.com/business/invest/homes-that-are-near-good-schools-are-hot-properties