More making the move to suburbia

More making the move to suburbia

Property investors with a lower budget but with a longer term perspective towards property purchases may look at the choices available in suburban areas instead of prime locations.
Analysts reckon that prices in upcoming suburban areas are still within reach and units there have upside potential as well, making them good investment opportunities.
Among the new coming areas that potential buyers can consider include Serangoon, Jurong Lake District and Punggol Waterfront Town, market experts said.
Mr Colin Tan, Chesterton Suntec International research and consultancy director, said: “Investors should identify areas with future potential and enter early to secure a pricing more reasonable than some of the developed areas. In the long term, say about five years, the price may rise 20 to 30 per cent.”
Mr Tan noted that since the opening of the Integrated Resorts, property prices in suburban areas have also increased sharply from between $400 and $450 per square foot to about $800 psf.
Experts said some developments within the suburban areas have become popular mainly because of their proximity to the new and less heavily-used Circle Line.
In addition, they observed that more expatriates are settling away from the prime areas as well, creating more rental opportunities for unit owners. “Expatriates are increasingly moving into suburban areas to save on the housing allowances. Meanwhile, a greater proportion of foreign and permanent resident Chinese and Indian buyers are also doing so because of their preference,” said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.
Among the new upcoming areas that are expected to see a vibrant community when fully developed are Kallang Riverside and Jurong Lakeside District.
When completed, Kallang Riverside will see a new Sports Hub, an additional 400,000 square metres of commercial space, 3,000 hotel rooms and more.
Meanwhile, the Jurong Lakeside district will be developed into a major regional centre, featuring a commercial hub and leisure destinations for locals and tourists.
“The overall development in these areas can give an uplift to prices in the region, ” Ms Chua added.
But industry experts noted that to keep the selling price palatable, developers may build smaller units.
In addition, Mr Tan cautioned: “Because these new sites need at least three to four years to develop fully, investors should be careful about timing the market and be prepared to hold the units.”
Meanwhile, for those with deeper pockets, industry watchers still recommend the prime area properties.
“For investment, it is good to buy into prime areas with good resale and rental value. In these areas, prices have not climbed to its peak and there is more upside, therefore, there is less price resistance,” said Ms Chua.
Source : Today – 30 Jul 2010