As the old adage goes, there are three things that matter in real estate: Location, location and location.
This saying is spot on, as any real estate agent, developer, property investor or urban planner will tell you.
Location, not the physical home, is the most important factor in determining the value of a home. A dilapidated home in a desirable neighbourhood is worth more than a pristine one of comparable size in a run-down or tired neighbourhood.
When it comes to Singapore property, there is a proven formula that makes a location desirable: One good primary school plus one convenient MRT station as well as a park (or other recreation area).
For good measure, throw in a shopping centre and other commercial retail outlets that provide one-stop shopping and dining.
Presto! We now have a sustainable neighbourhood where property prices should appreciate at a reasonable rate and create wealth as well as nest eggs for its residents, as long as they maintain it well.
Shopping is a national pastime in Singapore. As such, it should come as no surprise that developers, real estate agents and urban planners are quick to highlight a nearby shopping mall when promoting a property or an area.
A well-managed shopping mall brings people from all over to its shops and restaurants. This creates a virtuous circle for the neighbourhood. The more people come to shop and eat, the more retailers want to be there. The more prosperous the area becomes, the more people want to live there, and the more commercial and home prices appreciate.
If you are a shopaholic, you may find that you have to pay a premium to live near your favourite shopping mall. The table lists some of these premiums for private homes and Housing and Development Board flats within 1km of shopping malls.
Homes near The Shoppes at Marina Bay Sands are the highest priced. The median price per square foot (psf) is S$2,249, which translates to about S$2.25 million for a 1,000 sqf unit. To rent that same unit would cost about S$5.75 psf, or S$5,750 per month.
Eighteen shopping malls, such as Far East Plaza and Wisma Atria, have nearby homes with prices above S$2 million for 1,000 sqf. You would have to shell out at least S$1 million to live in a 1,000 sqf unit near another 50 shopping malls.
For HDB flats, those near Marina Square are the most expensive, at a median price of about S$819 psf.
Since shopping malls are major drivers of value for an area and they seem to be sprouting up all over the island, we have to pay more to live near one.
So for those who are allergic to shopping, the next time your spouse drags you to the mall, think of it is as an addition to your home and enjoy it — because you are definitely paying for your shopping experience, in more ways than one.
To find the median price for private homes and HDB flats within 1km of 113 shopping malls, visit http://srx.com.sg/singapore-shopping-malls
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.
Source : Today – 26 Sep 2014