More willing to pay for connectivity and convenience: Survey
By Elizabeth Choong
/ EdgeProp Singapore |
Lentor Modern, the next eagerly anticipated integrated mixed-use development. (Picture: GuocoLand)
Key findings from the survey
The majority of people surveyed are willing to increase their housing budget for a home with good connectivity and convenience. This was one of the main findings from the recently concluded EdgeProp survey on this increasingly relevant subject. The result is not surprising, given the rising cost of car ownership with recent COE (Certificate of Entitlement) exceeding $100,000. As a result, many are revisiting the tradeoffs between car ownership and living in a place with easy transportation access as a more sustainable and affordable option.
One in four survey respondents also indicated their willingness to increase their housing budget by more than 10% for a residential property with direct access to MRT. Respondents also highly value the convenience of having nearby amenities such as supermarkets and affordable food choices. Notably, convenience and connectivity were deemed to be more important than a central location.
Methodology of survey and respondents’ profile
The online survey on connectivity and convenience was carried out by EdgeProp Singapore from June 17 to 30 and 1,247 valid responses were received. The majority of the respondents are between 41 to 65 years old (68%), with 45% living in HDB, followed by Condo/Apartments (38%) and Landed Property (16%). (Find HDB flats for rent or sale with our Singapore HDB directory)
Readiness to purchase
Three hundred and sixty-one respondents indicated they were looking to purchase a residential property within the next 12 months. Of these, 57.9% of respondents plan to purchase as owner-occupiers and had an average budget of $1.9 million. A large majority (77.8%) will consider buying a unit in an integrated development with easy access to connectivity and convenience.
Supermarkets, affordable food and MRT deemed most important amenities
Supermarkets were deemed the most important amenity to have in an integrated development; with 87% surveyed indicating it as important. Affordable food choices (69%) and walking distance to an MRT station (66%) round up the top three most important amenities.
On the flip side, a major gym, walking distance to the workplace and beauty services were deemed the least important amenities.
Willing to pay for convenience and connectivity
The increasing cost of car ownership will see more people relying on public transport, therefore easy and direct access to MRT is critical. Direct access to a supermarket will also cut down on travelling time and distance when buying groceries and other daily necessities.
Nearby public transport nodes bring homeowners much-appreciated connectivity so it is not surprising that 85% to 92% of the respondents indicated a willingness to pay more for residential properties near such amenities. Respondents are also willing to increase their housing budget to live near supermarkets (83%) and affordable food choices (78%). Likewise, tenants are willing to pay higher rents for a home near the above-mentioned amenities, which bodes well for investors looking to invest in such properties.
Our survey findings also indicate that direct, sheltered access to an MRT station brings significant value enhancement to a property with 27% of the respondents willing to increase their housing budget by at least 10% for such property. Additionally, 19% of them are willing to increase their housing budget by 10% to live within walking distance of an MRT station.
Many respondents identified supermarkets and affordable food as important amenities but relatively fewer of them (compared to MRT access) are willing to pay more for a home near these amenities. This is a good indicator that connectivity is also valued more highly than convenience.
Additionally, more owner-occupiers are willing to pay for proximity to an MRT station compared to investors. This is understandable as owner-occupiers will directly benefit from the easy access to connectivity.
Time is money
Sixty-eight percent of the respondents either agree or strongly agree that they can draw on future savings from transport to increase their housing budget for a unit in an integrated development. This is even more apparent if their daily commute is shortened.
To save five minutes on their daily commute, 4% of respondents are willing to increase their housing budget by more than 10%; increasing to 12% and 36% of respondents for savings of 30 minutes and an hour respectively. In fact, the majority of respondents are willing to spend more than 5%–10% higher on the housing budget if it saves them 30 minutes on commute time. In this case, time is truly money.
Connectivity and convenience trump central location
The central area of Singapore is often seen as a desirable area to live in because it is located near the CBD and Orchard Road. However, four in five of the people surveyed indicated that they would prefer a non-central but well-connected property with nearby amenities as compared to a centrally located property with low connectivity and convenience.
Preference for convenience and connectivity over a central location is understandable. This is also reflected in the rising prices of properties Outside Central Region (OCR), as seen by the recent success of AMO Residence (where 98% of its units flew off the shelves on the first day of sales) and the recent en blocs of Chuan Park and Euro-Asia, in which the expected prices of these redevelopments will cost in excess of $2,200 psf.
Integrated developments are rare and in hot demand
Newly-launched integrated developments are generally well received by buyers. For example, the 407-unit Piccadilly Grand, integrated with Farrer Park MRT Station, saw 77% of its units sold during the launch weekend in May. The take-up rate increased to 80% a month later.
Sixty-one percent of units in Midtown Modern were sold during launch weekend last March. Due to its excellent location in the heart of Bugis, the take-up for the 558-unit development reached 76% in June.
What our survey found was that convenience and connectivity trump having a central location. A good example is Sengkang Grand Residences which sold 32% of 680 units when it was launched in November 2019. The project has two remaining units.
Last but not least, Pasir Ris 8 was launched last July and promptly sold over 85% of 487 units in its first weekend. Take-up has increased to 90.3% in June. Overwhelming success for the integrated development spurred other developers to reprice their projects.
All eyes will now be on Lentor Modern, which is targeted to be launched by GuocoLand this September. The 605-unit integrated development is directly connected to Lentor MRT station on the Thomson-East Coast Line and is just nine stops away from Orchard. The development comes equipped with 96,000 sq ft of commercial spaces, including a 12,000 sq ft supermarket and a 10,000 sq ft childcare centre. When completed, it will be part of the new Lentor Hills neighbourhood under the North-East Region Master Plan. Nearby schools include Anderson Primary School, Presbyterian High School, Mayflower Primary School and CHIJ St Nicholas Girls’ School. (Find Singapore commercial properties with our commercial directory)
Check out the latest listings near Piccadilly Grand, Midtown Modern, Sengkang Grand Residences, Pasir Ris 8, Lentor Modern, Lentor MRT station, Anderson Primary School, Presbyterian High School, Mayflower Primary School, CHIJ St Nicholas Girls’ School
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