How do MRT stations affect house prices? Are house prices much lower further out you go from the city than when you are nearer?
I chanced upon the following few charts produced by SRX and found that some insights could be gained when location data combined with house prices was visualized in a manner that facilitiates a certain way of thinking.
In summary, prices further out from the city (Raffles Place, City Hall, Bayfront areas) get progressively lower, which is to be expected, until they are about 40-50% of that in the city. While people intuitively know prices further out are lower, I’ve not seen an average figure or anything graphical put out.
This post will seek to show that.
As an example, if per sq ft prices in the central areas were S$2000 psf for example, those in far out areas like Pasir Ris, Bukit Batok, Woodlands will cost approximately S$800 to S$1000 psf.
The prices in the MRT line photos are averaged from 3 July to 1 Oct.
This post will go in the order of the following MRT lines
- Green/Blue East-West MRT line
- Red/Yellow North-South MRT line
- Purple North-East MRT line
- Orange Circle MRT Line
- Brown Thomson-East-Coast MRT Line
- Blue Downtown MRT Line
Green/Blue East-West MRT line
To be expected, average house prices are highest around the central area of Raffles Place (S$1,985), Tanjong Pagar (S$2,153) and Outram Park (S$2,153).
There aren’t many transactions in City Hall (S$1,471) so the prices may not be entirely reflective due to the fewer number of deals.
So with the data above, I decided to see how much cheaper prices were further out from Raffles.
Raffles is assumed to be the central point with prices of S$1,985, therefore it’s pegged at 100%.
The further out one goes to Pioneer in the west and Pasir Ris in the East, prices fall to S$983 and S$880 respectively, about 50% of that found in Raffles Place.
What’s interesting is the fact that prices are highest further west of City Hall, in places like Tanjong Pagar and Outram Park. Why is this so? Like mentioned earlier, it could be the dearth of transactions in City Hall given it’s character as a business CBD, or that higher prices are in Tanjong Pagar and Outram Park are indeed reflecting its enhanced liveableness.
The Green East West line illustrates the distribution in pricing well because of its span from East to West, while going through central Singapore.
This can’t be said for the other lines which do not span the whole of Singapore.
Nevertheless, let’s look at how prices are distributed along the other lines.
Red/Yellow North South MRT line
Same story, except that because the line ends around the Raffles place area, the chart doesn’t appear like that for the Green/Blue East-West line.
Prices are pegged to Orchard (S$2,222) therefore it’s 100% there. Prices further out at places like Woodlands (S$804), Yew Tee (S$681) and Bukit Batok (S$765) are about 40% of Orchard.
The right side of the chart is elevated because the stations there such as City Hall (S$1,471) and Raffles Place (S$1,985) are in central Singapore.
Purple North-East MRT line
The chart is similar in sloping upwards like the Red/Yellow North-South line because it starts/ends in the Punggol/City or vice versa.
Prices at Punggol (S$1,007), Sengkang (S$1,050) and Hougang (S$874) at one end of the line are about 45% that of Outram Park (S$2,153), the station where average property prices are highest.
I would have expected Harbourfront (S$1,602) to have relatively high prices given it’s gradual transformation into a business hub (with Mapletree Business City, Vivocity etc nearby). However the prices are lower than Outram possibly because the location is not as central as Outram Park (S$2,153), Chinatown (S$1,718) and Dhoby Ghaut (S$1,754) area. Another reason could be that prices are averaged over 3 July to 1 Oct. A longer time period may have shown different results.
Nevertheless, the charts bear the finding that the further out you go from Outram Park on the Purple North East Line, prices gradually fall to about 40-50% of that in the City Centre.
Orange Circle MRT Line
For the Orange Circle line, the intuitive thought would be that the price chart is U-shaped and that is partly true. That is, higher at the ends than in the middle because the stations near both ends are the Harbourfront and Marina Bay area.
The fork at Promenade (S$1,235) to Dhoby Ghaut (S$1,754) and Marina Bay (S$2,024) is quite short so that won’t affect the findings significantly.
Even though Bayfront and Harboufront are at both ends of the Orange Circle MRT line, Bayfront is nearer the city centre than Harbourfront is, so prices are pegged at 100% there.
The chart bears out the finding that prices near both ends of Harbourfront and Bayfront at S$1,602 and S$2,024 respectively are higher than in the middle which is the Lorong Chuan (S$1,051) area.
In the middle is Lorong Chuan where prices are the lowest, at S$1,051 or about 50% lower than Bayfront.
Brown Thomson-East-Coast MRT Line
For the Brown Thomson-East-Coast line which goes from North to Central to East, the chart bears out a distribution similar to that of the Green/Blue East-West line with prices highest in the middle (Orchard area) and lowest at both ends of Woodlands and Sungei Bedok.
Going through Orchard where prices are highest at S$2,222, prices at both ends of Woodlands (S$804) and Sungei Bedok (S$798) are about 40% that in Orchard.
These locations have prices roughly similar around the S$800 psf region.
Besides Orchard where prices are at 100% of S$2,222, Outram Park (S$2,153), Maxwell (S$2,141) and Shenton Way (S$2,172) register fairly high prices given their central location.
Blue Downtown MRT Line
Finally, the Blue Downtown MRT line which goes from North West, through the city centre in a cirle and ends up at Expo shows a similar distribution with higher prices at the end like the Green/Blue East-West line and Brown Thomson-East-Coast line.
Going through Bayfront where prices are highest at S$2,024, it slowly tapers off to about 50% of city centre prices at Expo where prices are S$955 and Bukit Panjang at S$998.
Upper Changi, one stop before Expo has the lowest prices of S$762 along the Blue Downtown MRT line.
So what can one deduce from these few charts? What are your thoughts?
I myself am actually surprised with the results.
I’ve never looked at property prices in Singapore in a line chart before.
All thanks to SRX’s big data crunching which calculates prices around MRT lines, it’s now possible to visualize prices this way.
As to what it means for house buyers, sellers and investors, it could suggest that the Singapore property market is quite efficient, in the sense that you are unlikely to find really cheap properties in the city centre, neither will you find sellers asking for sky high prices further out.
This would also mean that investors seeking to make a fortune in the market would have to rely on off-market deals where sellers have to dispose of a property quickly, or buy a less well-furnished property and renovate it before selling.
SRX mentions that
In general, similar homes increase in value the closer they are to an MRT station. Furthermore, as you move away from the Central Business District (CBD) along MRT lines, the PSF of homes within one kilometer of a station tend to decline. When this is not the case, there might be an arbitrage opportunity.
Regarding the arbitrage opportunity SRX is talking about, I would see one which is to find out the average discount between non city centre homes and city centre homes over time, then observe when there may be deviations.
Actually, this can already be done by comparing the price difference between URA’s Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) prices based on their quarterly release. However, the findings is more general than what these charts show which allow one to zoom down directly into an MRT locality.
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