Thursday, June 07, 2012

MRT stations help narrow suburban-urban price gap

The MRT network, along with a sluggish high-end market, has resulted in a narrowing price gap between residential units in suburban areas near MRT stations and those in the prime districts / CBD area.

“The MRT transport network is so good that what is important now is not how far a property is from the centre or CBD; it (the price) is now more defined by how close you are to the MRT station,” said Cheng Wai Keung, Chairman of Wing Tai Holdings.

He noted that MRT stations across the country have also helped reduce price differentiation between various suburban locations.

Cheng also feels the government has provided sufficient amenities.

“Today, living in a place like Sengkang is not so unbearable. There's an MRT station, a mall, library, everything,” he said, noting that there are also office buildings in some residential locations, so residents “don't have to come to town to work.”

Overall, amenities such as shopping malls, which were previously available only in urban locations, are now common in suburban areas.

“This convenience has narrowed the price difference between urban and suburban areas, and also between the different suburban centres,” said Cheng.

However, Cheng said the price gap between the two types of locations will not continue to narrow due to snob value and perceived prestige. “High-end locations still have a certain brand value,” he noted.

While Cheng acknowledges that the government’s motivation for releasing more plots near MRT stations is to maximise land use near major transportation nodes, he also pointed out some of the advantages of selling plots further away from MRT stations.

“You bring down the price,” he said, adding, “ (what) you don't see at every tender, prices continuing to move up, with 15 developers going in to fight for a choice site.”

“This will reduce the anxiety of people. It helps to moderate the urge to quickly want to buy before price goes up.”

By selling land sites located further away from MRT stations, “you allow people a choice to have cheaper housing.”
View the original article here

Source From Property Guru

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