Wolf Money(my property journey part 3 of 3)
In my previous blogs I talk about location characteristic in Geylang/Paya Lebar area. Below are links to
1.) Wolf Money(my property journey part 1 of 3)
2.) Wolf Money(my property journey part 2 of 3)
I will move on to part 3. There had been alot of discussion on Paya Lebar Airbase redevelopment and it’s implications to the surrounding buildings within the flight path in the newspapers. URA just launched an exhibition on redevelopment in Singapore for the next 50 years. PLAB is at the centre of that transformation. Below are commentaries given by industry expert.
I had set a list of criteria for my house hunt, beside fulfilling schooling needs for my son, limiting our budget is one of our top consideration. The rising interest rate environment is a big concern so it is prudent for us to right size our housing need to prevent ourselves from getting into some sort of financial trouble. Interest rate is not the only expense that is going up. Utilities bill, grocery and transportation are all going up. Enough complaints. The rest of the criteria are as follows.
1.) Fulfilling schooling need with decent schools within 1km.
2.) Must be near a Mrt station since I don’t drive and I cycle regularly.
3.) Be near amenities e.g shopping mall, coffeeshop, eatery and banks
4.) Reasonable pricing
5.) Freehold plot for legacy planning
6.) Potential for en bloc jackpot(good to have but don’t bank on it)
7.) Decent size apartment with minimum of 3 bedrooms with at least 1000 sqft of space.
8.) A distance away from the sleazy and red lights area.
9.) Away from the main road due to traffic noise generated.
All available option base on our criteria lead us to the upper odd Lorong of 37-41 in Geylang. Other older development like Aston Mansions and Grandlink Square Apartment at the upper even lorong are also worthy consideration. To be frank, Geylang is not everyone’s cup of tea, the stigma of Geylang is strong with usual association to the red light district. My wife and I have decide to purchase an old apartment within the Lorong. The apartment had the following attributes
1.) 1km from Kong Hwa School and Geylang Methodist Primary.
2.) About 300m or 5 mins walking distance to Paya Lebar MRT station(circle and east west line) with underground link to basement 2 of PLQ mall. Paya Lebar station is a few stops away from city. There is a Geylang PCN that take me direct to MBS and town area.
3.) Business/lifestyle hub of Paya Lebar Quarter is just across the road. Coffeeshops and eateries are aplenty.
4.) $11xx psf for a freehold property vs the recent winning Dunman Road GLS at $1350psf(land cost only) with $2200 min launched price for a 99 years leasehold project. Mori another freehold project at Guillemard Rd near Lorong 24 sell for 1950-2000psf. Most new launches around Geylang and Paya Lebar took reference of been close to PLQ as their key selling point. Y not we get one just across PLQ at lower price and nearer to the PLQ. Logical?
5.) Freehold, common area is clean. Building structure sound, well maintained. Squarish layout. Duo frontage. No facilities thus lower mcst fee. Only 20 percent of the carpark lots are occupied at a single time. There are plenty of parking for every households and visitors.
6.) The potential for en bloc is always there given URA encourages urban renewal. The apartment has only 8 floors with plot ratio of 2.8(36 maximum height) with potential removal of height restriction from 2030 as mention by MND Desmond Lee in a recent news article, Geylang undervalued properties can maybe be allow to reflect its true value when the height restriction is lifted.
7.) Corner unit at 1000 sqft and above with no adjacent neighbours. No west sun.
8.) A distance away from Red Light area.
9.) Quiet neighbourhood away from the main road.
@ gross rental yield is in upwards of more than 3.5 percent with good rentability(estimated).
Our purchase satisfied all our criteria given our conservative budget. If one can look past the age of some geylang properties, Geylang might be worth considering. The locale of the property is superb. We are sold by its location. Further more price are lower than some 99 years leasehold condo around the area. As mention Geylang property is not for everyone but that area does retain its old unique charm. I love living near a historical district with the vibrancy other places can’t offer. Food choices are aplenty. Geylang offer a cheaper entry to the east side of the country with big rejuvenation plan in years to come. The bullish bid of 1.28b for Dunman Road GLS(government land sale) can ascertained to that confidence.
Having an old apartment does come with some downside. Older apartment generally need more repairs to make good of the unit. Heat dispersement are less efficient due to smaller window and heavy use of brick facade which trap heat. Buying an apartment in Geylang for family stay does required more investigative work given the “special situation” , finding the right unit can be rewarding. Layout of the units on each floor is different, I have seen unit that literally facing straight on with neighbour’s door, with many units doing rental and a narrow walkway which make family stay less ideal. Below are some other points to note.
1.) Numbers of units on a single floor.
2.) Check if your immediate neighbour whether they are tenanted, an overly tenanted unit can reduce your family quiet enjoyment.
3.) I avoid mini penthouses due to difficulty to move on unless the price is too good to pass on and one love the lifestyle of climbing stairs. There are quite a few projects in Geylang with mini penthouses. Watch out for less usable space for eg open terrace and void area which is part of the psf you are paying for.
4.) I prefer development away from red light and its immediate vicinity to better prevent from “spill over effect”. Some banks don’t finance development within the red light area or the subsequent Lorong. Apartment within the red light does required longer time to sell. The 2015 change to land usage by URA to purely commercial use within the red light district laterally decrease any chances of en bloc for apartment within the red light area(2 to 22 Lorong) as developers can’t rebuild current apartment into new residential project, I don’t foreshadow offices been built till government decided to uproot the red light district.
5.) Most residential plot in Geylang is 2.8 plot ratio(max 36 floor) but that doesn’t mean the authority will approved future project to its max height. Other factors like plot size and URA take into consideration with LTA consultation regard to traffic congestion due to narrow roads in some Geylang Lorongs. I suspect most apartment can’t achieve the maximum height even with lifting of height restriction. 12-16 floors might be more realistic.
6.) Religious and Clan activity increase traffic noise within the street are worthy consideration. There are plenty of it in Geylang.
7.) Buy what you could afford. Interest rates are moving up fast. Always have some spare bullets, just like the Queen with her spare sandwich in her handbag.
8.) Look out for mcst fees, they can add up to be a substantial expense. Always check the condition of lift which might require replacement due to aging motor. I came across an apartment building with lift without a working 7th floor, owner need to climb or walk down one level . Lift is a very expensive item to replace that might require mcst to load the mcst fees if there are not enough sinking fund especially in some smaller projects.
9.) This maybe for potential buyer of 37-41 lorong, apartments are limited in supply given its low density. I waited quite a while for the right one to appear.
10.) For development near east west mrt train track, noise is one of the considering factor. Train passed the estate once every 5 mins from 6am to 11.30pm. The downside living under flight path, you do get occasional military jets flying passed the estate. Once every hour or two. They do have a more regular operation hours.
11.) 1 bathroom is good until you are face with the morning rush. Family should get at least a 2 bathrooms configuration unit to prevent “toilet war”. More bathrooms can fetch higher rental.
12.) 12%, 8% and 4% of assd apply for the first 3 years, to ensure there are no quick flip on the property.
Above are my personal experience on the ground, don’t take mine as gospel truth, do your own research. The lifting of the height restriction can only happen 8 years from now and there is no certainty URA is going to allow all plots in Geylang to be build up to maximum plot ratio due to substantial increase in traffic congestion. The lifting of height restriction around the PLAB area does bring very good revenue to the government coffer with all the development charges and taxes payable. 12-16 floors might be a reasonable expectation. Doubling of GFA would be good enough to bring joy to residents of Geylang Lorong 1-44. Buy an apartment which you like to stay for at least the next 5-10 years. I hope not to make a loss given how far the current property cycle had gone, I wouldn’t be surprise property market might go through a slight correction or price stagnation for the next two years. We would have waited if not for my son schooling needs. We agreed having a good education for my son outweighed the downside risk. If there is a windfall to be made years down the road, I will thank God for his blessing. Ultimately a home is a place where all the joy and happiness are shared under one roof. I wish everyone all the best in your property search if you are searching for one. Maybe Just maybe I will see you in Geylang soon. 😁
Please follow us on telegram for the latest update on Lone Wolf investor by clicking on the link below
https://t.me/joinchat/oCgkD3sQFRMzMWM1
Disclaimers
All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.
Comments
Post a Comment