Are landed homes in Sembawang and Serangoon worth the purchase?

October 30, 2012 / By

In Singapore, where land is scarce and a significant portion of the population live in government subsidised flats, many citizens have the dream of owning landed property. However, with prices of landed property in the prime Districts of 9, 10 and 11 transacting at an average price of SGD 1,531 per sq ft or SGD 7.5 million in 9m12, the cost of owning such housing is high. During the same time period, the transaction prices of properties in Districts 15 and 16 on the eastern coast, where landed housing is predominant, have averaged SGD 1,167 per sq ft or SGD 3.5 million per sq ft.

Landed housing launches have been few and far between, but quite recently, a pair of landed housing developments with 99-year leaseholds in Sembawang and Serangoon have piqued the interest of many buyers.

The Urban Redevelopment Authority of Singapore (URA) recently put 37 sites at the northern tip of Singapore in Sembawang up for sale. Fragrance Homes Pte, Ltd secured eight of these sites at an average price of SGD 335 per sq ft per plot ratio. The developer must have considered the waterfront orientation of the properties, which places them away from the hustle and bustle of the city, and the scarcity of landed properties in the area to be the properties’ main selling points. Indeed, these qualities have drawn buyers to the location, which have caused new sale prices of homes in this cluster to double from SGD 681 per sq ft in 3Q08 to 1,423 per sq ft in 3Q12, representing a 20% annual growth rate.

In comparison, Serangoon’s newest landed housing development achieved an average new sale price of SGD 1,450 per sq ft. The development has seen strong take-up rates, with 65 of the 80 units sold since its launch in June.

How does this pair of landed housing developments compare against each other? They both offer the opportunity to have a private garage, rooftop swimming pool and the bragging rights that come with owning a landed property, but that is all they share in common. The key difference between the two neighbourhoods is in the lifestyle and experience they offer. The neighbourhood of Serangoon is somewhat an urban jungle that’s close to central Singapore, commercial hubs and a wide variety of shopping malls. Sembawang on the other hand is located at the northern tip of Singapore and further away from general amenities and offers homeowners the opportunity to take leisurely strolls at nearby Sembawang Park, candlelit dinners on rooftop verandas and quick weekend trips with the kids to the beach.

The downside to these two developments is their 99-year leases, which are uncommon for landed homes in Singapore. All other factors equal, I feel that buyers’ main decision points will be between shelling money out for a slightly cheaper but older home in the Central/East Coast District against a brand new but slightly pricier house in Sembawang or Serangoon.


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