No longer 'ulu': Why resale prices in Sembawang have risen faster than any other neighbourhood in Singapore
HDB resale prices have gone up across Singapore. But one neighbourhood stands out – Sembawang.
SINGAPORE: A rising tide lifts all boats, regardless of whether they are in Bukit Batok or Sembawang, and that has been the case with Housing Board (HDB) resale prices in recent years.
Singapore saw the housing market take off in recent years, with resale prices rising to record highs during the pandemic, amid increasing demand and low supply.
While HDB resale prices have hit new highs in nearly all towns, one stands out – Sembawang.
Once considered “ulu” – a Malay term referring to a remote place – resale prices there for four- and five-room flats have risen the most in percentage terms among HDB towns.
The median resale price for four-room flats in Sembawang has jumped from S$338,000 (US$251,000) to S$551,000 in less than five years – a 63 per cent increase.
That is much higher than the 37.7 per cent increase in the HDB resale price index (RPI) in the same period. The RPI reflects the general price movements in the resale market.
Five-room flats in Sembawang have seen the median resale price leap from S$392,000 to S$602,900 in the same time frame, a 53.8 per cent hike.
Other towns have have seen bigger increases in that period too – with four-room flats in Bukit Batok going for 62.5 per cent more, and those in Kallang/Whampoa for 59.6 per cent more. In Woodlands, the increase was 59.4 per cent, while Yishun saw a 52 per cent rise.
When it comes to five-room flats, the towns that saw the biggest price bumps were similar: Sembawang, Woodlands, Choa Chu Kang, Bukit Batok and Yishun. The increases in prices were between 44.5 and 53.8 per cent.
WHY SEMBAWANG?
Over the past year, a substantial number of flats in Sembawang were sold at above S$700,000. A maisonette at Canberra Road sold for S$810,000 in October 2023 and a five-room flat at Canberra Street transacted at S$750,000 in January this year.
Why have flats in places like Sembawang outperformed?
Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI), said that better connectivity and more lifestyle offerings have enhanced the desirability of homes in the area.
The opening of Canberra MRT station has improved access to public transport in the town, he said.
Upcoming developments such as the North-South Corridor are expected to further boost connectivity from the northern region to the city.
“Better transportation options not only add convenience but also tend to positively impact property values as they significantly reduce travel time for residents,” said Mr Sandrasegeran.
Professor Qian Wenlan, director of the Institute of Real Estate and Urban Studies at the National University of Singapore, said that when urban planning was still organised around a “hub-and-spoke” model with a core central area surrounded by satellite towns, the mature vs non-mature distinction gave rise to pricing differences.
Prices were dependent on location and other attributes, such as connectivity and amenities.
“However, as urbanisation becomes more uniform islandwide in tandem with the decentralisation of employment hubs, we anticipate prices to (be distributed) more evenly. In this regard, it would not be unexpected to find Sembawang flats closing the gap with their counterparts in mature estates,” she said.
Singapore is set to do away with mature and non-mature classification from the second half of this year. Build-to-Order (BTO) flats will instead fall under three categories – Standard, Plus and Prime.
Besides Sembawang and Canberra MRT stations that serve residents in the area, another boost to connectivity is the Thomson-East Coast Line, which interlinks with the North-South line at Woodlands station.
New amenities in the area include the Canberra Plaza shopping centre and Bukit Canberra, a sports and community hub that has a hawker centre, indoor sports hall, swimming complex and a polyclinic.
“These enhancements in Sembawang have not only improved the quality of life for its residents but have also contributed to the positive perception of the area, making it an attractive option for property buyers,” said Mr Sandrasegeran.
“These developments have likely played a pivotal role in the observed increase in resale prices of flats in the area.”
He attributes the spike in resale prices to buyers’ interest in newer flats.
Based on data.gov.sg, 1,011 resale flats were sold in Sembawang in 2023. About 42 per cent were flats that had just passed their minimum occupation period (MOP).
With longer remaining leases and minimal wear and tear, these flats are often more attractive to home buyers.
“The entry of these flats into the market post-MOP introduced more options for potential home buyers, likely driving demand and contributing to the overall volume of resale transactions in Sembawang,” he said.
He added that over the past few years, a significant number of residential estates across Singapore have seen million-dollar transactions, apart from Choa Chu Kang, Jurong West, Sembawang and Sengkang.
More than 2,000 flats in Sengkang and Sembawang are expected to reach their MOP in 2024 and unit resales have gradually increased to above S$745,000.
“It is likely we may see a first million-dollar transaction in these estates in the near future,” he added.
Mr Sandrasegeran said that in recent years, non-mature estates such as Punggol and Sengkang have witnessed urban transformations, enhancing their attractiveness to home buyers.
These developments have started to “blur the traditional distinctions between mature and non-mature estates in terms of appeal”.
According to HDB data, a four-room flat in Punggol – a non-mature estate – commanded a median resale price of S$605,000.
In contrast, the median resale price of a four-room flat in nearby Pasir Ris – a mature estate – was S$555,000.