SMRT and price increase in MRT.
Singapore is building more and more MRT stations.
Property Buyer Singapore Home loan consultants investigates the effects of MRT on Singapore property prices.
According to wikipedia, there are 78 stations in operation in Singapore’s MRT system
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Is being within MRT is priced attribute ?
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Will property prices go up due to MRT?
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Is having the MRT convenient? Do you feel convenient or it is really convenient?
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Being close to MRT is no big deal, we can show you
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Before you get excited about being close to MRT, have you thought of the Over-crowding in MRT trains?
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will MRT re-write the property investment statement of “location location location?”
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Will prices rise because of a MRT station or prices rise because of sub-urban developments?
ANALYSIS OF PROPERTIES WITHIN 1KM OF MRT STATIONS
SMRT stands for Singapore Mass Rapid Transit. A public train system.
Based on a report by Wikipedia, there are currently 78 stations. Based on these, we calculate the square areas
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3.1416 x 1km x 1km= 3.1416 square kilometers
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Based on 78 MRTs, area coverage = 78 x 3.14 sq km = 245 sq km.
Singapore’s total size is 710.3sq km.(Singstat, http://www.singstat.gov.sg/stats/keyind.html)
Singapore’s water catchment area could be easily 50sq km and Singapore’s Lim Chu Kang restricted military area and other areas could easily be another 50sq km.
WHAT IS THE SIZE OF SINGAPORE’S ACCESSIBLE AREAS?
So Singapore’s accessible areas are 710.3 – 50 – 50 = 610.3 square kilometres.
So 78 MRT stations will cover 245 sq km out of 610.3sq km. If we assume that all accessible areas are populated evenly, the 78 MRT stations already cover 40.14% of the accessible land area in Singapore.
Therefore , if we draw a 1km circle (Radius) around each MRT station, we will find that 40.14% of Singapore’s accessible land is covered by 1km of these MRT stations.
For simplicity, let’s assume that properties are evenly distributed since the sample size is huge.
If we make the above statement, therefore roughly 40.14% of all properties in Singapore are within 1km of an MRT station.
How many number of units of Private housing is 40.14%?
Wow, that is a lot of properties that are near to an MRT station.
So there are some 250,334 (URA Q2, 2010) units of Private property units and hundreds of thousands more HDB housing units.
40.14% of that is some > 100,494 of choices of private property on the market that is potentially near to MRT stations.
Technically you have some100,000 units of private property to choose from. Even if these properties are not put up for sale all at once. Each year, there would be a turn-over of 3 to 6% which amounts to 3,000 to 6,000 of buy and sell activities on these private properties.
ARE YOU EMOTIONALLY ATTACHED TO BEING NEAR TO AN MRT STATION?
Let’s look at the travelling time and the number of train one must get off and get back on in order to get from one place to the other.
Are you really saving time if it is near to MRT?
Is distance to your children’s school no longer important if you have MRT?
In many cases, I would assume that those are still very important criteria.
MRT IS OVERCROWDED – IT’S A PROFIT SEEKING ENTERPRISE
So many far away places are now covered by MRT. Does it mean that it is more valuation property? Yes to an extent, but that still does not address the distance issue.
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Are the developers maximizing emotions?
What are the effects of MRT on prices of Singapore properties ?
If people start to realise that being near to a MRT station is no magic pill and neither is it a paradise, they will not bid as much.
For those properties which are far away from town, being near to an MRT will command a good premium, while those farther away will have likely lesser value.
For those properties which are near to city centres or near town, being near to MRT should have a smaller premium as access becomes more varied and not singularly dependent on the MRT.
To Summarise The Effects of MRT on Properties
For Far away locations
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Near to MRT means easy access. Alternative modes of access not great.
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Not near to amenities
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Not near to working place
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Not near to business centres
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Not near to schools, etc.
So perhaps access to MRT gives a greater premium compared to those in the same area without MRT within easy reach.
For Central and Prime locations
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Access to amenities – Good
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Near to many places
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Near to shopping areas
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Near to schools
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Near to business centres
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Modes of transport varied and plentiful (such as Bus, train, taxis, etc) and distances near.
Such locations do not significantly (perhaps should not) be affected by whether there is MRT or not.
With Properties near to MRT command a smaller premium?
The premiums one pays to properties which are near to MRTs will shrink over-time. Singapore Property Buyer may need to focus on your own lifestyle core needs, rather than what is good to have in order not to overpay.
Those very far locations touting MRT as a feature should generally not be valued higher than those that are nearer to city centres or with good locations (but without MRT) except when there is HYPE. (people who buy into Hype may lose out)
At some stage developers want you to think that distances doesn’t matter as long as there are MRTs. Now If you will only imagine how you will squeeze with all the people on the super crowded and not very regular frequency MRT train . Getting to town is no mean feat, then the choice will always be LOCATION and smooth connectivity as a priority, be it railway, MRT, bus, boat, car or whatever transport.
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