Property investors keen on Tiong Bahru

Area has few amenities but limited supply of new units 'preserves value'

Published on Oct 27, 2012

By Amanda Tan

TIONG Bahru may have few amenities to boast about but that has not deterred property investors and tenants from scouting for homes.

Property consultants say the city fringe area is one of the country's oldest housing estates, with about 10 private condominiums.

Conservation apartments built by the Singapore Improvement Trust (SIT) - the Housing and Development Board's (HDB) predecessor - years ago also feature prominently on the landscape, they said.

Consultant Lee Sze Teck pointed out that there are several Art Deco-style shophouses as well as pre-war housing blocks.

But since 2006, more modern additions in the form of four private projects, such as the 2010- completed Regency, have sprung up, adding more than 680 new units to the mix.

Mr Lee, Dennis Wee Group's (DWG's) senior manager of training, research and consultancy, noted that there are no more private developments in the pipeline although a few public housing flats are being built now.

There is a site on the reserve list at Kim Tian Road, a stone's throw away from Tiong Bahru Plaza and the MRT station but that has not been triggered yet.

The limited number of recently completed homes means the area is not at risk of oversupply - a draw for investors who want to preserve the value of their properties and see higher potential for capital appreciation, R'ST Research director Ong Kah Seng said.

But on the flip side, it means some investors - especially those with smaller budgets - have to settle for older condos that lack modern designs and conditions.

The area's oldest condo, Yong Siak View, was completed more than 30 years ago.

Price gains in the area have been "encouraging, though not significant", Mr Ong said. Over the past year, prices have gone up about 5per cent, in line with slow resale price recovery.

Average resale prices at Central Green Condominium were between $1,100 and $1,200 per sq ft (psf) in the first half of the year, and $1,400 to $1,550 psf at the newer Regency.

The area is a better performer in terms of yield, Mr Ong noted, giving owners an average return of 3.5 per cent to 4 per cent. This is at the higher end of residential yields, which typically range from 2.5 per cent to 4 per cent.

Mr Ong also noted that homes in Tiong Bahru are "predominantly low-rise, generally in good condition and exude nostalgia and (have) a strong historical element".

"Investors should seriously consider this area, as freehold resale condos average about $1,500 psf compared with suburban launches (which can be as high as) $1,300 psf... (There is) strong leasing demand for homes here due to its central location," he added.

The area has Tiong Bahru Plaza, several eateries at shophouses and Tiong Bahru market and its famous hawker stalls. Tiong Bahru station on the East-West MRT line is the key transport link.

DWG's Mr Lee pointed out that traffic capacity in the estate is limited, as the roads were mostly built in the pre-war years and are thus prone to congestion.

Still, Mr Ong is optimistic about the area as a property hotspot.

"The character of the place will continually anchor interest... investors who hold (their units) for at least five years should be able to expect at least mini profits," he said.

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