Straits Times: Sat, Nov 19
THE days of bargain buys in Tiong Bahru are long gone - the 1,000 sq ft pre-war flat that cost about $680,000 three years ago would set buyers back about $1 million now.
The astonishing price hikes are being driven by the transformation of the once-sleepy neighbourhood into a popular enclave with the kind of amenities younger buyers seek.
While the area contains a mix of private and public housing, there are 27 blocks of private pre-war homes with conservation status that are especially popular.
Unlike the neighbouring public flats built by the Singapore Improvement Trust, owners of these pre-war conservation apartments are not subject to HDB eligibility rules.
The appeal is not immediately obvious, despite the proximity to the Central Business District and a well-established network of amenities.
Most of the pre-war homes have less than 60 years left on their 99-year leases and are contained in low-lying blocks that range between two and five storeys high.
There are no lifts or modern facilities like rubbish chutes, and like other older developments, these blocks do not come with facilities like pools, gyms or security guards.
But this has not deterred prospective owners and tenants.
Ms Tan Kar Woei, a procurement engineer who has been living in a four-bedroom apartment in Guan Chuan Street since 2009, told The Straits Times: 'My husband and I have lived here for a long time and we're familiar with the Tiong Bahru estate.
'Other than being near our families, it reminds us of a different place and time when housing estates in Singapore weren't so built up.'
Young professionals and expatriates who have also seen the appeal now make up a size- able portion of the neighbourhood's demographic and the area has seen an infusion of businesses, with bookstores, art galleries and coffee joints sprouting up over the past year.
Anecdotal accounts suggest that despite the shorter leases, some owners are able to secure longer-term financing for these pre-war flats, a sign of the area becoming more established.
The buzz has also proved irresistible to investors.
'Around 90 per cent of the calls I get about properties in the area are from investors. But two to three years ago, it was a 50-50 split between investors and buyers looking to live there,' said Mr Alvin Yeo, a property agent who deals primarily in Tiong Bahru homes.
Accurate figures on prices and rents of the pre-war apartments are difficult to piece together, but agents say they have seen an increase in sales activity and listings.
Between 2005 and 2007, there were no more than three transactions a month, but now there can be up to 10.
Recent transactions have shown the staggering jump in prices.
Urban Redevelopment Authority (URA) data shows a 1,141 sq ft flat in Yong Siak Street sold for $668,000 last September, which translates to $585 per sq ft (psf).
It is unclear if the apartment was then renovated but it changed hands again in September this year for $1.27 million or $1,113 psf, almost double the initial sale price.
Rents for a typical 1,000 sq ft unit can hit $3,500, or $3.50 psf per month (psf pm), Mr Yeo said, up from the average $3 psf pm from three years ago while shop spaces are going for more than $7 psf pm, up from around $4 psf a year ago.
Prices of newer private homes nearby have benefited a great deal from the demand for the pre-war homes.
URA figures indicate that the median price of flats at The Regency at Tiong Bahru, a condominium in Chay Yan Street, was $997 psf in the second quarter of 2008. Fast forward to the second quarter of this year and it was $1,486 psf.
While some real estate agents have described homes in this area as slightly more resilient to recession, property experts beg to differ, saying that like the rest of the market, the growth trend is dependent on how Singapore's economy fares within the next year.