Hidden Gems: Older HDB flats in Marine Parade
By Elizabeth Choong
/ EdgeProp Singapore |
The Marine Terrace MRT Station is one of the four MRT stations that opened recently in the Marine Parade Planning Area. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) – Stage 4 of the Thomson-East Coast Line (TEL) opened in June, connecting residents along East Coast Park to the MRT network. Katong Park, Tanjong Katong, Marine Parade, and Marine Terrace MRT Stations on the TEL are located in the Marine Parade Planning Area. Stage 4 of the TEL also includes three other stations, namely Tanjong Rhu, Siglap, and Bayshore MRT Stations. The improved connectivity has sparked increased interest and transformative developments in the neighbourhood.
The Marine Parade Planning Area is expected to benefit significantly, as the neighbourhood has long been underserved by the MRT network. Connectivity is expected to improve further when Stage 1 of the Cross Island Line (CRL) opens in 2030. Bright Hill MRT Station will serve as an interchange station for TEL and CRL.
A seaside neighbourhood
The Marine Parade Planning Area is bounded by the Geylang River and Dunman Road to the north, and by East Coast Park to the south. The western and eastern boundaries of the planning area are anchored by Katong Park and Marine Terrace MRT Stations, respectively (see Map 1).
Source: EdgeProp LandLens
While most people associate Marine Parade with the East Region, the planning area is actually part of the Central Region, although its eastern boundaries abuts the East Region (see Map 2).
Source: EdgeProp LandLens
The Marine Parade Planning Area has a number of reputable schools, including Tao Nan School, CHIJ Katong Convent, Chung Cheng High School (Main), and Tanjong Katong Girls’ School. Other amenities in the area include Parkway Parade, Katong Plaza, The Flow Mall, Katong V, Marine Parade Central Market & Food Centre, 50A Marine Terrace Market & Hawker Centre, the Chinese Swimming Club, Katong Swimming Complex, East Coast Park, and East Coast Parkway.
The Marine Parade Planning Area also has more condos than HDB flats. At the time of writing, the area has 82 HDB blocks and 161 condo developments, representing 7,980 flats and 12,970 units, respectively. Interestingly, all completed condos in Marine Parade are freehold developments, except for Cote D’Azur, Silversea, The Red House, The Shore Residences, Marine Mansion, and Roxy Square, which was put up for collective sale with an asking price of $1.25 billion. The en-bloc tender for Roxy Square will close on September 26. Additionally, three 99-year leasehold condos are still under construction, namely Grand Dunman, Tembusu Grand, and LIV @ MB.
Cote D’Azur (612 units) is currently the largest completed condo in Marine Parade but will be overtaken by Grand Dunman (1,008 units) and Tembusu Grand (638 units) when they are completed. It is also notable that the majority of completed condos are boutique developments with fewer than 100 units.
Age and limited number of HDB flats could have affected demand
From 2014 to last year, the resale volume for Marine Parade HDB flats remained below 200 flats, except in 2021, when 204 flats were sold. So far this year, 82 flats have changed hands (see Chart 1). In comparison, 25,990 HDB flats were sold in the resale market and 18,129 HDB flats have been sold thus far this year. This limited number of resale transactions for HDB flats in Marine Parade could be due to the limited number of flats in the area.
The age of the HDB flats in the Marine Parade Planning Area may have deterred some prospective buyers who are concerned about lease decay. The average age of the HDB flats in the area is 48 years, compared to 20 years for condos in the same area.
There is also greater diversity in the age of condos in Marine Parade, offering prospective buyers more options. The age of condos in Marine Parade ranges from developments that are still under construction to 56 years old, while HDB flats in the same neighbourhood range from 46 to 54 years old.
The limited supply of HDB flats in Marine Parade could be another contributing factor to the area’s low resale volume. According to the latest annual report from HDB, there are 6,532 HDB flats in Marine Parade at the end of March 2023, which represents 3% of the 217,560 flats in the Central Region and 0.6% of the 1.053 million HDB flats in Singapore.
It is not surprising that the average resale price of 99-year leasehold condos in Marine Parade ($2,031 psf) is higher than their HDB counterparts ($645 psf). However, it is noteworthy that the average resale price for leasehold condos in Marine Parade has surged by 64.9% since 2014, compared to the 10.4% price growth achieved by HDB flats during the same timeframe (see Chart 2).
Source: EdgeProp Market Trends (as at 19 August 2024)
We removed age from the equation by comparing developments of a similar age. The average resale prices for HDB flats over 40 years old in Marine Parade have grown at a slower pace than their counterparts in the Central Region and islandwide. Since 2014, the average price for older HDB flats in Marine Parade has grown by 10.4%, compared to the 14.5% increase for similar flats in the Central Region and the 17.2% growth for similar flats islandwide (see Chart 3).
However, the older flats in Marine Parade ($645 psf) command a higher average resale price compared to similar flats in the Central Region ($600 psf) and islandwide ($560 psf), which indicates that aging flats in Marine Parade are still valued by buyers. This could be due to the improved connectivity after the TEL opened, its proximity to the sea, as well as the numerous reputable schools and amenities in the neighbourhood. The limited number of HDB flats in Marine Parade could have also given a boost to resale prices.
Source: EdgeProp Market Trends (as at 19 August 2024)
Only four million-dollar HDB transactions in Marine Parade this year
At the time of writing, only 13 HDB flats in Marine Parade have been sold for more than $1 million. The first million-dollar transaction took place in 2022, with three such transactions occurring that year, followed by six such transactions last year. To date, four million-dollar transactions have taken place for HDB flats in Marine Parade this year (see Chart 4). These transactions represent less than 1.5% of the total number of million-dollar transactions in Singapore each year.
The four flats in Marine Parade that sold for at least $1 million this year are all five-room flats, each fetching at least $800 psf, which is higher than the average resale price of $710 psf for five-room flats in Marine Parade (see Table 1). It is notable that the flats fetched such high prices despite having remaining leases of only 50 or 51 years, as the leases for all four flats began in either 1975 or 1976.
Source: EdgeProp Buddy (as at 19 August 2024)
One of the four million-dollar flats is located at 64 Marine Drive. This flat is larger than the usual five-room flat because it is an adjoined unit, which could explain its eye-watering price.
Two of the flats are located along Marine Terrace, with their transactions occurring just one month apart. The high prices fetched by both flats could be attributed to their close proximity to Marine Terrace MRT Station, 50A Marine Terrace Market & Hawker Centre, CHIJ Katong Convent, Ngee Ann Primary School, and Victoria Junior College (see Map 2). Additionally, 14 Marine Terrace faces East Coast Park, likely providing residents with unblocked views of the sea.
Source: EdgeProp LandLens
The limited number of million-dollar transactions for HDB flats in Marine Parade indicates that buyers could potentially acquire an HDB flat in Marine Parade and live in the Central Region at an affordable price. However, the short remaining lease on these flats would make them more ideal only for older buyers.
Majority of three-room flats transacted for less than $500,000
The five-room flats ($710 psf) in Marine Parade achieved the highest average resale price compared to their three-room ($623 psf) and four-room ($625 psf) counterparts (see Chart 5). However, the five-room flats also experienced the highest price growth of 15.8%, while the four-room flats had the lowest price growth at 6.7%. The average price for three-room flats increased by 9.7% over the same timeframe.
Source: EdgeProp Market Trends (as at 19 August 2024)
At the time of writing, 41 three-room flats in Marine Parade have been sold this year, with the transaction prices for 34 of them being below $500,000. Furthermore, 24 of these flats sold for prices below the average resale price of $623 psf for three-room flats in Marine Parade.
The three lowest transacted prices this year for HDB flats in Marine Parade are all for three-room flats whose leases began in 1975. A three-room flat at 6 Marine Terrace fetched the lowest price of $350,000.However, it is a short distance from the five-room flats at 12 and 14 Marine Terrace (see Map 3), which transacted for more than $1 million. The low transaction price for the three-room flat at 6 Marine Terrace could be due to the flat being located on a lower floor (see Table 2).
Source: EdgeProp Buddy (as at 19 August 2024)
At the same time, the three-room flats at 33 and 34 Marine Terrace are a short walk from each other (see Map 4). Their low transaction prices could be due to the lack of a MRT station within walking distance. Marine Terrace MRT Station is the nearest station but is more than 500 meters away. However, the two blocks are located adjacent to the reputable Tao Nan School and within walking distance of CHIJ Katong Convent. St. Patrick’s School and Victoria Junior College are also within a 1km radius. Furthermore, both blocks are a short walk from East Coast Park.
Source: EdgeProp LandLens
Only three completed leasehold condos in Marine Parade
The average resale price for 99-year leasehold condos in Marine Parade ($2,031 psf) has surpassed that for leasehold condos in the Central Region ($1,983 psf) this year. However, the average resale prices for leasehold condos in both areas have consistently trended above the average price for their counterparts islandwide ($1,635 psf) (see Chart 6).
Since 2014, the average resale price for leasehold condos in Marine Parade has grown at a faster pace of 64.9% compared to the Central Region (39.1%) and islandwide (53.7%).
Source: EdgeProp Market Trends (as at 19 August 2024)
There are only three completed 99-year leasehold condos in Marine Parade, namely Cote D'Azur, Silversea, and The Red House. Additionally, there are three 99-year leasehold condos still under construction, namely Grand Dunman, Tembusu Grand, and LIV @ MB.
The average resale price for Silversea ($2,095 psf) is trending above that of Cote D'Azur ($1,817 psf) and The Red House ($1,664 psf) (see Chart 7). Furthermore, Silversea is the only development among the three with an average price above the Marine Parade average ($2,031 psf). However, the strongest price growth since 2019 was achieved by Cote D'Azur (50.4%), followed by Silversea (28.8%) and The Red House (13.8%).
Source: EdgeProp Market Trends (as at 19 August 2024)
Cote D'Azur and Silversea are located adjacent to each other along Marine Parade Road (see Map 5). However, Cote D'Azur is a larger development with 612 units, compared to the 383 units in Silversea. Cote D'Azur obtained its temporary occupation permit (TOP) in 2004, making it 10 years older than Silversea, which received its TOP in 2014. The Red House is located along East Coast Road. It is the newest (TOP in 2016) and smallest development (42 units) among the three condos.
Cote D'Azur and Silversea are also located adjacent to Parkway Parade and are a short walk from Marine Parade MRT Station. Other nearby amenities include The Flow Mall, Katong Plaza, and Marine Parade Central Market & Food Centre.
Source: EdgeProp LandLens (as at 19 August 2024)
Additionally, Cote D'Azur has 636 profitable transactions, significantly more than the 149 profitable transactions achieved by Silversea (see Table 3). Both condos have a similar number of unprofitable transactions. Cote D'Azur has 37 unprofitable transactions, while Silversea has 36. The losses for Cote D'Azur are lower, with the highest loss being $450,000, compared to the highest loss for Silversea ($2.5 million). There are a total of five unprofitable transactions in Silversea that resulted in losses of over $1 million.
Cote D'Azur seems to offer buyers the most bang for their buck because it has an average resale price that is lower than that of Marine Parade. It has also achieved a stronger resale price compared to other completed leasehold condos in the same planning area. Furthermore, Cote D'Azur has had more profitable transactions than Silversea, which is its immediate neighbour.
The main drawback of Cote D'Azur is the age of the development. Having obtained its TOP in 2004, the leasehold development is 20 years old. Silversea is 10 years younger, having obtained its TOP in 2014. The age difference could explain why Silversea has an average resale price that is $278 psf higher.
Future developments in nearby Bayshore
The government plans to build approximately 10,000 new homes in the nearby Bayshore area, with about 70% expected to be public housing. The upcoming Build-To-Order (BTO) exercise in October features two projects in Bayshore that will have a combined total of 1,440 flats. The larger project will have 730 flats (see Map 6), while the second project will have 710 flats.
The two projects will feature the first new HDB flats built along East Coast Park since the completion of the flats in Marine Parade. However, both Bayshore BTO projects fall within the Bedok Planning Area and is hence in the East Region. This is unlike the Marine Parade Planning Area, which is part of the Central Region. However, the proximity of both projects to Bayshore MRT Station means that they are expected to be launched under the new plus category for public housing.
There is also a site along Bayshore Road on the government land sales (GLS) programme for 2H2024. The site was moved from the Reserved List for 1H2024 to the current Confirmed List, and is expected to be launched for tender in November. The site is located adjacent to Bayshore MRT Station and Costa Del Sol (see Map 7). URA estimates that 515 housing units can be built on this leasehold site. Its convenient location near an MRT station and the lack of new nearby condos are expected to appeal to developers and prospective buyers.
Source: EdgeProp LandLens (as at 15 August 2024)
Conclusion
The HDB flats in Marine Parade are over 40 years old. However, there is still demand for these flats because it is a desirable neighbourhood with a wide variety of amenities, numerous reputable schools, and close proximity to East Coast Park. Furthermore, connectivity has greatly improved with the opening of the TEL.
However, it cannot be said that the age of the HDB flats has had no impact on prices. There have been only four million-dollar transactions for HDB flats in Marine Parade this year, which represents only 0.7% of the total number of million-dollar transactions thus far this year.
As such, the HDB flats in Marine Parade would be ideal for buyers seeking an affordable flat in the Central Region and are not concerned about lease decay. Ideal prospective buyers could include older couples who do not need a flat with a long remaining lease or retirees looking to downsize and monetise their larger existing home. Younger couples, who would need a longer remaining lease, may want to consider one of the Bayshore projects in the upcoming BTO exercise in October.
For buyers seeking affordable private housing in Marine Parade, Cote D'Azur may be able to meet all their needs. The condo has an average resale price that is lower than that for the planning area and has achieved more profitable transactions than its immediate neighbour. The main drawback of the development would be its age and leasehold tenure.
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