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Are landed properties in District 15 coming down in Q4 2023?

Previously, we’ve waxed lyrical about the potential of landed properties in District 19. However, while District 19 is an upcoming star, we haven't forgotten about the A-lister that has already proven itself time and again: District 15 (East Coast, Marine Parade).


Easily one of the top three favourite locations among Singaporean buyers, District 15 is home to approximately 9,400 landed properties in total – the second-largest inventory of landed properties in Singapore (the first being in District 19). That works out to around 1,600 detached homes, 2,500 semi-detached homes, and 5,300 terraces, eagerly anticipating what Singaporeans fondly call the East Coast Plan.


In this episode, my colleagues and I analyse District 15 and predict its future performance:

But why is District 15 so popular?

Familiarity


The first reason is familiarity. Now, I've made my stance on the perennial east versus west debate clear in our previous articles. In my view, the former is certainly superior because it was developed long before the West Coast and even Marina Bay came to life. ECP, PIE, and CTE have been our key expressways since time immemorial, significantly reducing the island's size since its early days. Facts and figures aside, buying a house is an emotional decision at the end of the day, and it's hard to deny the grip that nostalgia has in a country that is constantly evolving.


Schools and amenities


Nostalgia aside, the usual suspects apply. Living in District 15 easily places one within a kilometre of excellent schools, of which there are plenty. Think Tao Nan School, Temasek Primary School, Tanjong Katong Girls' School, Chung Cheng High School, and Victoria Junior College.


Even if one has no children to think about, Parkway Parade and the plethora of cafes and restaurants in Joo Chiat are a huge draw. Of course, the list of amenities isn't complete without mentioning East Coast Park, which appeals to many expatriate tenants who love to live near the beach.



Transportation


District 15 is already wildly popular even without considering the upcoming Thomson East Coast Line (TEL), scheduled to commence in the first quarter of 2024. Given that many Singaporeans are accustomed to considering proximity to train stations as a significant checkbox, this may very well be what seals the deal. Let's be honest - the ability to soon take the train from Woodlands all the way to East Coast Park is impressive.


URA's Master Plan


In addition to the TEL, residential developments are in store for the Bayshore area under URA's master plan, as announced by PM Lee during the National Day Rally in 2023. As you would expect, new townships come with commercial establishments.


You may wonder: What does the increase in public housing have to do with the demand for landed properties? Well, stories of growth and transformation can influence buying decisions in the landed segment for one simple reason: buyers and owners tend to hold onto their properties for a long time. Potential, therefore, translates into a guaranteed increase and appreciation of value down the line.



What about its deal breakers?


Like most neighborhoods, there are a couple of things about District 15 that leave much to be desired. Joo Chiat, for instance, has been dubbed an unofficial red-light district, which doesn't faze young buyers as much as it would young families. Meanwhile, residents in and visitors to areas like Telok Kurau are familiar with parking woes.


Another deterrent to purchasing a landed property in District 15 is its high pricing. At the time of filming, the median price point hovers around S$1,900 per square foot (psf) for land alone, a whopping S$400 psf more than most districts in Singapore. Why hasn't it stopped buyers from flocking to District 15, then? There are two reasons.


New launch prices


With new launches starting at S$2,600 per square foot (psf), it's safe to say that condominiums in District 15 don't come cheap either. When families – our main clientele for landed properties in Singapore – are choosing between a three- to four-bedroom condominium or a landed home with a S$5,000,000 budget, the answer is a no-brainer.


In fact, one of our viewers recently approached us with an interest in buying a 99-year leasehold condominium at a new launch in District 15. After doing the math, he discovered that it would be wiser to buy a landed property by increasing his budget and sprucing it up.


He isn't wrong. If the market believes that developers will not acquire land too aggressively in this interest rate environment, and land prices continue to escalate as a result, buyers who can afford to make the leap will do so. And given District 15's legacy in Singapore, we're seeing many retirees with "old money" lending their children a hand in buying a landed property in Singapore.


Will the price tag of S$1,900 psf prevail?


Previously, we discussed the decrease in the landed property price index and its implications. Would it have any impact on the prevailing S$1,900 psf? Our answer, to the delight of sellers and disappointment of buyers, is no. For starters, many buyers shopping for a landed property in District 15 are families looking to move there for the schools. As a result, they not only have a strong commitment to purchase but are also sensitive to timelines and likely to act swiftly, increasing activity in the location.


Plus, while District 15 has the second-largest inventory of landed properties in Singapore, a search for listings under S$4,000,000 on PropertyGuru is unlikely to return many results. This is because many owners of landed properties in District 15 are "land banking," which simply means buying a property, holding it, and flipping it much later, even if that means shelving plans for rebuilding altogether.


The limited number of listings, especially those within 1 kilometer of the aforementioned schools, will therefore be highly contested. The district's popularity also increases buyers' confidence that they do not have to sell now to turn a profit; they can afford to wait until the macroenvironment looks up.


In short, prices are unlikely to be negotiable, and sellers will stick to their prices as long as they are reasonable.



Attention, sellers!

The government has spared no expense in cementing District 15 as a top location for multi-generational living in its landed enclaves. Unsurprisingly, prices here have rarely ever decreased before.


Among the buyers who have contacted us, many individuals are solely interested in District 15. While we receive numerous inquiries, we can't fulfil everyone's dreams due to the limited inventory. This is why we're reaching out to sellers in this location.


Traditionally, the last quarter of the year is a slow one for listings. This year, this phenomenon is exacerbated by the decrease in the landed property price index. If you're a seller, this could be your window of opportunity to sell at your ideal price. We have prospects who are eager to make a move, especially if your home is fully upgraded.

Intrigued? Reach out to me (Harvey Chia) at 9199 9141 to explore your options.


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