Wednesday, October 03, 2012

Geylang is red hot with property investors

Geylang is becoming an attractive haven for property investors looking for high rental yields and capital gain, despite having a seedy reputation for prostitution and sleazy budget hotels.


Median prices of newly launched properties soared to S$1,255 psf in Q2 2012 from S$545 psf in Q2 2009. For instance, units in the recently launched Ness in Lorong 32 were going for an average price of S$1,302 psf in June, according to Lee Sze Teck, Senior Manager for Training, Research and Consultancy at Dennis Wee Group.


Lee noted that interest in the area is rising thanks to a number of new property launches. At least 40 projects comprising 2,190 units are set to be launched or completed in the next five years, bringing the overall number of homes in the area to over 5,500.


Meanwhile, Png Poh Soon, Research Head at Knight Frank, said that most of the new projects in Geylang are small, adding that there are less than 100 units with an average size of 818 sq ft. The small size and lower capital outlay makes the units more investor-friendly.


Resale flats are also doing well with prices rising to S$888 psf in Q2 2012 from S$410 psf in Q2 2009, noted Lee.


The healthy market seems to go against the trend that properties near key amenities and public transport links are the ones that attract buyers. In fact, Geylang does not have its own MRT station or big malls and suffers from traffic woes.


But rental demand is strong, with yields five percent higher than in suburban condos. For example, a two-bedder at Casa Aerata (S$600,000 price) was rented out at S$2,800 a month or a yield of 5.6 percent.


 


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