In February 2014, we’ve witnessed one of the rare head-on battles between 2 new condominiums in the Fernvale, Sengkang vicinity - Riverbank and RiverTrees Residences. Both developments are just located next to each other, yet both have their individual uniqueness which sets them different from their rival. One being attractive in pricing with barely any view, while the other offers a beautiful riverfront view with a slightly higher asking price. Let’s look at how each development performed on their first day of sale:
Riverbank sold more than 200 units out of 555 units available, at an average PSF price of S$1,011.
RiverTrees Residences sold an estimated 220 units out of 495 units, at an average PSF price of S$1,100.
I would say sales were pretty healthy and the price is indeed attractive for either development…BUT ONLY if you are planning for own consumption or own stay.
This morning, I read an article on Straits Times (headline on MONEY section) and there was this statement made by an “investor” which really caught me by surprise. As stated in the article, she visited two showflats in Sengkang earlier this month and said, “We’re looking at buying a new unit for investment…”. What shocked me was her interest to buy a new unit for INVESTMENT in Sengkang.
Personally, I feel that “investor” was likely drawn by advertisements to even make a trip down to look at what are her options in Sengkang. Clearly she hasn’t done any homework and clearly she is just hoping that someone influence her decision to invest in that area. Now, here’s the sad truth - Many “investors” are the same. They get drawn by hype and massive advertisements, thus ending up making irrational decisions. As I have always advised my clients and investors, you will better off investing elsewhere other than Sengkang/Punggol region. Because here’s one major factor that you have to consider:
Tremendously high “competition”
When it’s comes to investment, rental is one of the main attributes which an investor will consider. Lets look at the number of residential units that we currently have and are expected to have in the next couple of years in Sengkang/Punggol region:
| Project Name | Type | No. of units | TOP | Address | Average PSF |
|---|---|---|---|---|---|
| Rivervale Crest | Apartment | 490 | 2003 | 5-9 Rivervale Crescent, Singapore 545084 | $810 |
| Compass Heights | Apartment | 536 | 2003 | 9, Sengkang Square | $894 |
| Watertown | Apartment | 992 | 2017 | Punggol Central | $1410 |
| The Quartz | Condominium | 625 | 2010 | 51 Compassvale Bow Singapore 544984 | $1047 |
| Riversound Residence | Condominium | 590 | 2015 | 1 Sengkang East Avenue, Singapore 544811 | $874 |
| The Luxurie | Condominium | 622 | 2015 | 21 Sengkang Square, Singapore 545000 | $1086 |
| A Treasure Trove | Condominium | 882 | 2015 | 70 Punggol Walk, Singapore 824000 | $756 |
| H2O Residences | Condominium | 521 | 2015 | 20 Sengkang West Avenue, Singapore 797000 | $992 |
| River Isles | Condominium | 610 | 2016 | Punggol Central | $851 |
| Parc Centros | Condominium | 618 | 2016 | Punggol Central | $1043 |
| FLO Residence | Condominium | 530 | 2016 | Punggol Field Walk | $843 |
| Jewel @ Buangkok | Condominium | 616 | 2017 | Buangkok Drive | $1212 |
| La Fiesta | Condominium | 810 | 2017 | Sengkang Square | $1180 |
| Riverbank at Fernvale | Condominium | 555 | 2017 | Fernvale Close | $1011 |
| RiverTrees Residences | Condominium | 495 | 2018 | Fernvale Close | $1100 |
| The Rivervale | Executive Condominium | 671 | 2000 | 1 Rivervale Link, Singapore 545118 | $757 |
| Park Green | Executive Condominium | 391 | 2004 | 2 - 12, Rivervale Link, Singapore 545040 | $842 |
| Esparina Residences | Executive Condominium | 573 | 2014 | 113 Compassvale Bow, Singapore 544814 | $957 |
| Austville Residences | Executive Condominium | 540 | 2014 | 11 Sengkang East Avenue, Singapore 544804 | $728 |
| Riverparc Residence | Executive Condominium | 504 | 2014 | 90, Punggol Drive, Singapore 828794 | $665 |
| Prive | Executive Condominium | 680 | 2014 | 1 Punggol Central, Singapore 828844 | $693 |
| Twin Waterfalls | Executive Condominium | 728 | 2015 | 108 Punggol Walk, Singapore 828764 | $712 |
| Waterbay | Executive Condominium | 383 | 2016 | 45, Edgefield Plains Singapore 828710 | $724 |
| Ecopolitan | Executive Condominium | 512 | 2016 | Punggol Walk | $792 |
| Lush Acres | Executive Condominium | 380 | 2016 | Fernvale Close | $794 |
| Waterwoods | Executive Condominium | 373 | 2016 | Punggol Field Walk | $801 |
And here’s an overview on the numbers:
TOTAL NUMBER OF UNITS | 15,227 | AVERAGE TOTAL PSF | $907 | ||
NO. OF UNITS WHICH ARE WITHIN 500 METRES TO MRT STATION | 6,274 | AVERAGE PSF WHICH ARE WITHIN 500 METRES TO MRT STATION | $1,171 | ||
**Above information are consolidated from PropertyGuru and SquareFoot Research (as of 31 March 2014)
As you can see, the supply is huge (of which 9,492 are private residential units). So if you were to get a unit at Riverbank or RiverTrees Residences, what makes your unit or development so different that a tenant or future buyer will choose yours instead of the other? I am not referring to just choosing among various neighboring condominiums, but also within the condominium itself. Is the pool of tenants or rental demand greater than the supply?
In my opinion, you will be in a great risk of not being able to find a tenant, and end up asking for lower rental just to make ends meet. When it comes to real estate investment, it’s always about the Location and Accessibility. You have to get both, or at least 1 of them. I just feel that most condominiums in the Sengkang/Punggol doesn’t really fulfill the fundamentals of an investment property. Always try to put yourself in the tenants’ shoes and think rationally.
It’s not that you shouldn’t buy or invest in Sengkang/Punggol
When compared to other districts or regions in Singapore, properties prices in Sengkang/Punggol are still relatively low in today’s market. If you are having financial constraints or for some other reason that you want to get a property in this region, I have only two suggestions.
Buy one which is near a MRT Station
Of course, such property is definitely priced a little higher, at least a 15 to 20% premium as compared to those which are not even near to a MRT Station. However, do note that out of the 26 listed properties in Sengkang/Punggol, only 9 properties are situated within 500 metres from a MRT Station. At least you have an “upper hand” in terms of market value and demand, which is only shared among 9 out of 26 residential developments. Your risk will be much lower as your property has “accessibility”, especially when it is situated in a region which is not near to the City centre. You or your tenant will definitely want public transport right at their doorstep if they don’t own a car.
Even better, near a mall
On top of “accessibility”, you may want to add “convenience” to it, which refers to your location as well. Being located next to mall certainly is a big plus point as this is where your daily necessities are met. I am sure when you are loaded with heavy groceries, you will want to get home as soon as possible and start relaxing on your comfortable sofa.
Final word…
I am not saying that you can’t invest or buy a property in Sengkang/Punggol. But like any property advice I would offer to my clients or investors, you will have to calculate your risk, especially in today’s market. Do your homework and evaluate wisely. Never let your emotions take over (unless you are planning for own stay). Even when a property offers great accessibility and convenience, you will need to be cautious and determine a fair entry price. On the contrary, when a property is selling at a low price or some would say “cheap”, you may be in for a tough time growing your wealth in future. Anyway It’s just how I feel and assess this region of properties. If you have your view, please do share with me.
Lastly, I would like to share an inspiring investment advice which I have received from a mentor in my life.
“Cheap is never the reason to buy. Value is.”
