Proposed MRT lines unlikely to impact home prices immediately

According to property analysts, home prices near the proposed new MRT lines are unlikely to increase in near future.

Market watchers say the announcement of a new MRT line could generally prop up prices of homes in the area by 3 to 5 percent. But the response to the announcement of the expanded rail network on Thursday may be more muted.

News of the new MRT lines would have generated more excitement among developers, buyers and sellers alike in normal circumstances, say analysts. But they are probably still thinking about the impact of the cooling measures introduced recently.

Without further details on the exact locations of the train stations, analysts added that it will not be easy to justify any significant increase in home prices.

Chia Siew Chuin, director of research and advisory at Colliers International said: “When the stations are announced, probably you will see another increase in prices for those located near MRT stations, probably to the tune of 10 to 15 per cent. Nearing completion of the stations, then we will see probably a 20 to 30 per cent increase in prices.”

The expanded rail network and new lines and are expected to be ready in 2025 and 2030.

According to analysts, the flip side is that future construction work could undermine the value of homes in the area.

“Typically, no one will want to buy a property to live next to a construction site, that is why buyers will only be willing to pay a premium when they are able to enjoy the benefits, when the lines are completed,” said Eugene Lim, key executive officer at ERA.

Market watchers also do not expect the announcement of the new train lines to reduce the impact of cooling measures to keep rising home prices in Singapore in check.

Source : Channel NewsAsia – 17 Jan 2013

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