The Straits Times, 31 Dec 04
Nice view can boost flat's price by 15%

A PRIVATE apartment with a good view can command a premium of 15 per cent here, according to a National University of Singapore study. The NUS real estate department found that the premium for a full sea view for private housing in the East Coast area, for example, is about $233,000 - or about 15 per cent of the average price of projects there - based on data collected between 1990 and 2002.

Real estate consultants backed up the study's findings. 'Good views are becoming more popular, particularly with the recent emphasis on city and waterfront living,' said Mr Leslie Chua, head of real estate intelligence services at Jones Lang LaSalle. 'The premium you pay is about 10 to 15 per cent.'

Mr Chua said it is only recently that Singapore has seen more residential buildings above 20 storeys. The average height of a condominium here is about 20 storeys, compared with 40 storeys in Hong Kong, he said. Chesterton International's director of research and consultancy Nicholas Mak said the premium can be around 5 to 12 per cent for a city view and 8 to 15 per cent for a sea view. At City Developments' The Sail @ Marina Bay, units facing the sea - which make up 60 per cent of the project - command a premium of 15 to 18 per cent over city-facing units, said a spokesman. The premium is higher because of the project's location, design and height, said consultants. The Sail is Singapore's tallest residential building, at 245m. A unit there now costs $940-$950 psf on average.

The NUS study found, meanwhile, that Housing Board home buyers do not have to pay as high a premium for good views. 'HDB flats with full sea view in Marine Parade have a price premium of 8.5 per cent,' said Associate Professor Yu Shi Ming.

While better views command higher prices, some buyers have discovered to their cost that a view is not always a permanent feature.

The NUS study found that a property's value falls by an average of 8 per cent when its view is blocked by a new development. The 30-storey Bayshore near East Coast Park suffered this fate when the Costa del Sol was built, blocking an unrestricted sea view. As soon as it became clear in the year 2000 that the units would lose their view, prices slumped dramatically, according to another study carried out by Mr Mak. In 2000, a Bayshore apartment cost an average $683 psf. The next year, prices fell to $603 psf, then $542 psf in 2002, $491 psf last year and $467 psf this year, he said. Mr Mak also discovered that when the sea view is lost, not only is the premium wiped out, the property's value also falls at a greater rate than the average price of other condominiums in the same area.