Save more while you enjoy the sunrise

As you sit on your balcony, would you rather enjoy the sunrise or the sunset over the water?

When it comes to property prices, it makes a difference. As measured along the East-West MRT line, you pay less for private housing in the east than you do in the west. Using Raffles Place’s median price per square foot (psf) as the basis for comparison, as you move east or west along the MRT line, prices drop, which means your “savings” on your home increase.

That is rather obvious — what’s interesting is that prices drop more quickly in the eastern direction from Raffles Place than in the western one.

In the case of Pasir Ris, it pays to watch the sunrise. The median psf for a private condominium within 1km of Pasir Ris MRT station is S$973. This translates to a 60 per cent savings with respect to the median price of condos within 1km of Raffles Place MRT.

In contrast, at Lakeside, which requires about the same MRT commuting time as Pasir Ris to the central business district, prices are only 48 per cent cheaper than those at Raffles Place. In direct comparison, Lakeside’s psf price of S$1,281 is a premium of 32 per cent over the Pasir Ris price.

This relationship holds true for the entire East-West MRT line. Bugis and Outram Park are both four minutes from Raffles Place. Yet, apartment dwellers in Bugis save 29 per cent, whereas their counterparts in Outram Park save 25 per cent.

In head-to-head comparisons of locations with equivalent commuting times to Raffles Place, the east wins every time in terms of savings: Lavender beats Tiong Bahru; Eunos vanquishes Commonwealth; Kembangan tops Buona Vista and Dover; and Tanah Merah topples Clementi.

On both the east and west sides of the East-West Line, there are some opportunities to save more even with a shorter commute to the CBD. For example, on the west side, you can save 41 per cent on a Redhill home while enjoying an eight-minute commute to Raffles Place, whereas Commonwealth is a longer commute at 13 minutes but offers a lower 39 per cent in savings.

On the east side, you can see a similar dynamic between Aljunied, with 50 per cent savings, and Eunos, with 46 per cent.

If you subscribe to the theory that real estate is all about location and convenience in travelling to the CBD, then these areas along the East-West Line with relatively more price savings and less commuting time than their peers suggest arbitrage opportunities worthy of further investigation.

By Sam Baker – co-founder of SRX, an information exchange formed by leading real estate agencies in Singapore to disseminate market pricing information and facilitate property transactions. For more details on the statistics used in creating this article, visit srx.com.sg/research.

Source : Today – 13 Jun 2014

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