Impact of IRs on home prices limited: DTZ Research

Singapore’s two integrated resorts (IRs) have had limited impact on home prices, according to a report by property consultancy firm DTZ.

The report noted that between the first quarter of 2009 and the second quarter of 2010, capital values of private of non-landed homes rose by 65.3 per cent in Marina Bay and 38.5 per cent in Sentosa (prior to the IR’s opening).

After the IRs opened, prices between second quarter of 2010 and first quarter of 2011in Marina Bay increased only 3.7 per cent while in Sentosa, prices increased by 1.5 per cent.

During the same period, prices in the Core Central Region (CCR) increased by 8 per cent.

“After the opening of the two IRs in H1 2010, the euphoria dissipated as there was no tangible advantage of living close to the IRs and there was additional traffic going to the IRs to contend with,” the DTZ report said.

Similarly, rents, which picked up by 35 per cent at Marina Bay between the first quarter of 2009 and second quarter of 2010 were higher compared to the 15 per cent growth in median rents at the Core Central Region (CCR) during that time.

But by end of last year, rent differentials between Marina Bay and the CCR did not see any significant increase.

In particular, rents in Sentosa – which rose temporarily after the opening of Resorts World Sentosa – have been falling and are now on par with rents in the prime district.

DTZ also cites the lack of public transport links to the island as a contributing factor to the rent decline.

DTZ said it anticipates housing prices and rents in Marina Bay and Sentosa Cove, “to move more in tandem with the rest of the CCR in future after the initial volatility”.

For Sentosa, DTZ said its main draw will be the limited supply of waterfront homes in a gated community while for the Marina Bay area, its easy accessibility and upcoming residential and commercial developments will continue to attract home buyers and investors.

Source : Channel NewsAsia – 8 Mar 2012

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