More Excitement for Geylang Properties?

With the news for lifting of the Paya Lebar Airbase site, its no doubt that Geylang will be one of the areas with added value to look into in today’s market. Thou this will only happen nearer to 2030, it does add in the future potential of properties in this area.20130825-Paya-Lebar-Airbase

Potential for Geylang Properties once Airbase is relocated

Investing in Geylang Properties – What to look out for???

It has always been a myth on buying a property in Geylang, whether its the Red light district concern or the myth that banks do not LOAN to buyers buying geylang properties. This post serves to address some of the myths and issues that are always dangling on investors mind when purchasing in this area.

Geylang properties generally has been categorized into a few areas. its easy to differentiate the areas looking at the Map attached below

MAP Picture, Courtesy from OneMap.sg

If you were to take a quick glance at the map, you will notice 4 distinct areas there.

Namely the ODD and EVEN Lanes,
EVEN lanes has 2 zones, 
Lorong 4 till Lorong 22 and 
Lorong 24 till Lorong 42

ODD lanes also has 2 zones, 
Lorong 3 till Lorong 21 and 
Lorong 23 till Lorong 41

Banks favour the ODD lanes, especially lanes starting from Lorong 23 onwards till Lorong 39, its safe to invest in. As mostly its residential properties area. All local banks support up to 80% financing.

For EVEN lanes, properties located from Lorong 24 onwards is generally safe. Lorong 4 to Lorong 22 is classified as the RED LIGHT DISTRICT. 
Financing in this area(Lor 4-22) will be difficult in a sense that only Maybank and Hong Leong Finance can loan depending on case by case basis. The percentage of the loan amount will differ as well. (Mostly up to 50% to 70% financing here by Maybank and Hong Leong)

Lorong 24 onwards will be slightly less stringent. However, local banks like UOB, DBS and OCBC are quite conservative about this lanes as well. Thus loans also is on a case by case basis.
As for Lorong 40 and Lorong 42 thou on EVEN lanes, its a all clear zone, all banks support financing for this lane. (3 Popular major developments lies here, Waterina, Sunny Spring and Aston Mansion)
However, with the recent new launches(Mickey Mouse units) banks are opening up to loans in even lanes.

End of the day, its important to double check with your banker on the financing before committing in EVEN lanes. 

4 Major Factors to look out for!

1. Tenants Pool and Demographics

What are the type of tenants residing in Geylang?
Mainly expats from UK, America, France, Australia, New Zealand.
Another class of expats are from China, mainly students and some working professionals
You will be surprise to know that a lot of the properties bought over these 3 years were by expats and they mainly bought the properties here for own stay due to the proximity to town. Some bought for investments due to the large pool of tenants available here.


2. Location!!! – Near MRT

Is it near MRT? Aljunied MRT or Paya Lebar Circle Line interchange MRT
Very importantly, choose properties that have a close proximity to MRT stations here, most of the tenants like Geylang is because its only 4 MRT stations from Aljunied MRT till City Hall Interchange. From Paya Lebar Circle Line interchange, its merely a few stations away as well. Expats here seldom drive, thus the mentality is that they would rather pay a lower rental to stay here, which is so convenient, than paying so much higher to stay in Orchard or River Valley. The properties here mainly caters to expats with a budget of $3k to $4k budget range for a 2 bedder or 3 bedder apartment or condo. 
Thus choose a project near to MRT for easy rentability and to avoid any lag time while searching for new tenants when u bought over the property.


3. Does the project has facilities?

To cater for faster speed of rentability after you bought the apartment, its important to choose a development with facilities like Gym, Pool and Security. a Balcony will be a plus point (Alcove, Sims Green, Waterina, Atrium Residences have balcony layouts)


4. What is the “Right Price?” and Rental Yield in the development?

Do some homework on the past transactions preferably at least past 3 to 6 months. And also the median rentals going rates at the area. However, when some buyers are out looking for properties in the market, they tend to offer prices based on the past transactions which end up not being to purchase one as the psf price range in Geylang is still inching up month by month. Thus Sellers tend to price their properties here slightly higher than the last transacted prices of their neighbours. 

A better approach to make a decision on making an offer for a property will be using the comparative approach, which is to compare the price according to the other similar properties in the same development that are currently for sale to give you a gauge if the price you are offering is too high. 
However this is not all to it in making your decision, it depends on a couple of other different factors as well namely;

a. Level of the unit; High flr, low flr?
b. Facing of the unit: Facing MRT track? or unblock or pool view?
c. Condition of the unit? Do u need to spend a lot to touch up the unit before putting up the unit for rental after buying it?
d. Is the unit rarely available? Eg. 2 bedrooms are more rare than 3 bedrooms unit in this area.
e. What is the indicative bank valuation of the property?

Are you getting a reasonable amount of Rental Yield, it is advisable to check the ongoing asking rental rates in the development as well to work out the rental yield that u might be receiving.

Geylang Properties – a Hot spot for investors

Small 1 Bedroom and Studio units gaining popularity in Geylang. Many investors are drawn to the lower quantum properties and seemingly low downpayment and also good potential rental yields.

From what we seen with the few projects which has obtained TOP Status like Casa Aerata and Centra Studios, both rental transactions in the projects are fairing pretty well with transactions between 2200 to 2500 for the 1 bedroom units. Compared to the initial purchase price of $450K to $550K, the 1st hand investors are fetching very good rental yields of between 4% to 5% yields.
Geylang a Growing Hot Spot for Investors

The Alcove 3 Beds, 1292sqft, Only $786psf!!! Great Rental Yield!!

Unit Information

Project: The Alcove
District: 14
Tenure: 99years, TOP: 31st Dec 2004, Total 102 units
Location: Lorong 27 Geylang, 5 mins walk to Aljunied MRT
Unit: High Level
Carpark: Basement, Ample Lots
Facilities: Full except Tennis Court
Maintenance: $300 inclusive of Sinking Fund
Size: 3 Bedrooms, 1292sqft
Sell with Tenancy: JAN 2013 
Asking price: $1.02M Negotiable
Feature Points– Best investment in Geylang, as Odd lanes lorongs starting from Lorong 23 onwards is residential zone and local banks award Full 80% mortgage loan(For buyers without existing mortgage, subjected to own credit status)
– Last Gold Mine in Singapore, cheapest PSF are found here with 2 URA Masterplans in this area. 10 mins drive to Marina Bay Sands & CBD. 4 stations by MRT to City Hall.- Once masterplan is completed for Kallang Riverwalk and Paya lebar Biz Hub, this area will potentially boom over $1000psf.- Latest launch at Lorong 25 and 25A are sold out at $1200psf for mickey mouse freehold units. This is only $786psf. What is the risk?

– Unit is selling with tenancy till JAN 2012, whats the benefit? They can safe the loss of rental time to search for tenant as well as save on agent fees to help rent out the property after completion. Rental yield is at 4.3X%.

– Very very easy to rent out. Units here rent out through grapevine without the need for advertising!- Awarded Top 10 interior Condo Versage Award by interior design magazine in 2007.- Good size of 1292sqft, with balcony in Living room and Master bedroom, the Expats here loves the balconies, easier to rent to expats.

– Still the cheapest buy in town, $786psf only. The number 3 cheapest location in Singapore compared to Woodlands and Choa Chu Kang. Safe price to enter at for a 1292unit, rather than spending the same amount to invest in high psf priced 1 bedders or Studios. Even if market goes the other way round, how cheap do you think it will go?
Comparisons made-
——– Investors are starting to look at this area due to the low psf and huge potential. based on Masterplan 2008.
——– Why spend $1400psf to $1600psf to invest in a tiny Studio unit with only 5xxsqft also at in other areas where Risk is much higher, For The Alcove, even if price drops if it were to happen, the safety nett price is much contained.
——–HDB across the street at Geylang East and Old Airport road are going at $600K to $750K for a 5 room flat already
——–Dakota Residences and Waterbank going at $1300psf to $1500psf, also 99 years lease hold.
 Pictures
Pls refer to my Link at
Alternatively, you may visit my Listings Website at

End of Mickey Mouse Units in Geylang???

Recent News Article on new URA measures on the minimum plot size for all new flat developments in Singapore to be minimum 1000sqm and there is a limit to the number of units that can be built in low density estates. Would it have an impact on the recent hype of “mickey mouse” or shoebox developments that are flooding the geylang area in the Lorongs?

Recently for the past 6-12 months, there has been an increasing amount of new launches in geylang, especially in the Lorongs, where couple of adjacent old landed properties has been enbloc by developers and redeveloped into 20-40 shoebox units developments.

With the introduction of this measure by URA, partly to prevent overcrowding, developers might have to rethink their marketing strategy now. Will these kind of enbloc activities still continue or the new launches might come to a stand still here in geylang? Lets wait and see….

Below is the link to URA website on the new measures

http://www.ura.gov.sg/circulars/text/dc11-14.pdf

Sims Green 3+Patio, Ground Floor Unit for Sale

New Listing for Sale!

Unit Details
3 Bedroom Unit
Patio – Front and Back Patio Space
Built in Area – 1238sqft
Patio – 387sqft
Total Size – 1625sqft
Asking Price – $1.1M Negotiable
Viewing arrangement – Flexible

Property Info

Description

Rare, Beautiful 3 bedder Ground Floor unit, Front and Back Patio.
Very Well Maintained. Huge SPace for Kids and Family
Call for viewing now. Vacant Possession!

Details

Property Name: Sims Green
Property Type: Apartment
Price: S$ 1,150,000    Negotiable  
Price (psf): S$ 707.69 psf (built-in)
Floor Area: 1,625 sqft / 150.97 sqm (built-in)
Condition: N.A.
Developer: Hoi Hup Development Pte Ltd
Tenure: 99-year Leasehold
TOP Year: 2004

FaceLift for Paya Lebar and Geylang Serai

Latest Updates to the Area

1. Ministry of Manpower opens a Continuing Education and Training campus in Paya Lebar Central in 2013. The eight-storey campus will focus on tourism, hospitality, food and beverage, retail, security and aerospace.

2. A 2ha plot at the corner of Sims Avenue and Tanjong Katong Road was recently released for sale as part of the Government Land Sales Programme. It is zoned for office, hotel and commercial use. Another big field of developers could line up for this site, say market watchers, with an expected top bid of as much as $960 psf ppr. The tender closes on Oct 18 2011.

3.  The old Lion City Hotel site and the former Hollywood Theatre next door will become a learning and enrichment hub, with a residential component. The UOL group emerged tops in a six-cornered fight earlier this year, with its bid of $313 million for the site.

4. Malay Village Redeveloping and new civic centre called Wisma Geylang Serai added.

5. Hotels, shops, parks and other facilities are on the drawing board for the area, as part of the Urban Redevelopment Authority’s 2008 Masterplan. There is about 12ha of land available for development and a potential commercial floor space of more than 5 million sqft.

Freehold Good Bargains in Geylang Properties

On the recently published news on Straits Times, on good bargains for Freehold properties on Singapore. We can see that a good deal of the transacted properties that they are mentioning are majority in Geylang. I have placed the attachment below for your reference.

Of course, some of the properties mentioned are in the heart of the Red Light District, thus it has to depend on your preference and risk appetite as well as financing as not too many banks will support the even lanes from Lorong 6 till Lorong 22.