Estates like Sengkang and Punggol gaining popularity as central resale flats' prices rise
THE surging prices of resale Housing Board flats in central districts are sending keen buyers to once-shunned outlying towns.
BESIDES THE LOWER PRICES, home buyers are also attracted by the relatively newer flats in Sengkang (above) and Punggol. They were built from the late 1990s and come with snazzier designs than flats in mature estates, which can be 20 to 40 years old. -- ST FILE PHOTOEstates like Sengkang and Punggol - no-go zones for many buyers a few years ago - have become more popular with people hoping to get a bigger bang for their buck.
The executive director of HSR Property Group, Mr Eric Cheng, estimates that demand for resale flats in Sengkang and Punggol has risen by 20 per cent to 30 per cent in the past year.
Dennis Wee Properties associate director Evan Tay, who specialises in Sengkang homes, noted that enquiries for flats there have risen by 20 per cent.
The reasons for this increase are manifold but all the property experts contacted by The Sunday Times highlighted one major factor: the rising amount in cash-over-valuation (COV) that owners of flats in central areas are demanding.
A five-room flat in Queenstown fetched a median COV amount of $110,000 in the July to September period, more than double the amount commanded in the quarter before that.
On the other hand, five-room flats in Sengkang and Punggol were going for a less heart-stopping median COV of $18,000 in the third quarter.
This COV component - the amount that is forked out over and above the valuation of a flat and cannot be paid with a home loan - tends to make or break a deal because most HDB flat buyers rely on loans to finance their purchase.
The chief executive of property agency Propnex, Mr Mohamed Ismail, said: 'In central areas like Toa Payoh, Bishan and Ang Mo Kio, if you do not have $50,000 in cash, you are outpriced.'
Home seekers like Mr David Tan, 44, are heading to the north-east after being turned off by prices in central areas.
The construction material trader spent a couple of weeks earlier this year surveying three-room flats in Rochor, which were going for between $50,000 and $60,000 over valuation.
'I wish I could (buy a flat in the central area). But the price is too high,' said Mr Tan, who eventually settled for a five- room flat in Sengkang for $320,000.
Meanwhile, 51-year-old project manager Yuen Pheng Yin, who moved from the mature estate of Toa Payoh to Sengkang three years ago, decided to stay within the newer town when he opted for a smaller flat last month to reduce his expenses.
'Singapore is too small, no area is too far away. I think I am getting more value for money by staying in outlying areas,' he said.
What also helps is that Sengkang and Punggol flats are relatively newer. They were built from the late 1990s and come with snazzier designs than flats in mature estates, which can be 20 to 40 years old.
Buyers priced out of more mature waterfront districts like Marine Parade can also take heart that some precincts within Sengkang also provide good views of the picturesque Sungei Serangoon nearby.
Earlier this month, an HDB balloting exercise for 316 flats in Hougang, Sengkang and Punggol attracted an overwhelming 5,147 applications. This is a far cry from the situation just about five years ago, when flats in these far-flung districts were given the cold shoulder as they were deemed to be too far from the action.
Still, HSR's Mr Cheng warned buyers against rushing into purchases in these new towns and overpaying for properties.
The HDB will offer more than 7,000 new flats - expected to be mainly in that region - over the next few months, so home owners looking to sell their flats will see more competition from new units coming onstream.
Key factor
A five-room HDB flat in Queenstown fetched a median cash-over-valuation amount of $110,000 in the July to September period. In contrast, five-room HDB flats in Sengkang and Punggol were going for a much lower median cash-over-valuation of $18,000.
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