There has always been a considerable difference between properties sold in mature estates and properties sold in non-mature estates since homebuyers preferred the mature estates more. This is due to the fact that mature estates provided a wider range of facilities and an increased living quality. However, it seems that this difference began to shrink a while ago, and the trend continues in the set direction. Plus, according to specialists, the differences between these two types of properties may continue to decrease in the near future as well.
How come the tide is turning regarding properties located in mature locations? It seems like homebuyers started preferring non-mature estates for their recent transformational efforts, stirring away from mature locations in their last part of the lease period, despite the multitude of benefits provided by such locations. As Mr. Lee Sze Teck stated, who is Hutton Asia’s director of research, it is possible to see the price of properties in non-mature estate reach the $1 million thresholds soon, if the trend keeps its ascension.
The month of May stood as a witness for this phenomenon when HDB recorded more significant price increases for properties located on non-mature estates. The month-on-month increase was 1.4%, while the year-on-year growth reached 12.4%, compared to properties located in mature estates, which recorded less significant growths, of only 0.9% month-on-month and 11.6% year-on-year. In Singapore, non-mature estates include Punggol, Bukit Batok, Jurong East, Sengkang, Choa Chu Kang, and Woodlands.
Regarding properties in mature locations, it is known that a premium is expected, in terms of price, among sellers, since they had to pay this premium as well upon the purchasing of the property. The premium is determined by the location of the property in a central area, together with all the benefits of living in such a location, such as the proximity of numerous amenities. Not so long ago, the location was crucial when it came to the value of a property. However, this aspect faded gradually, pushing the price for properties in non-mature locations to ramp up faster.
Still, the premium shrinking of flats in mature areas can also be due to the aging of some properties, which advance toward the end of the lease period. Such detail can make a property undesirable in the eyes of homebuyers, who may prefer properties in a younger area where the lease recently began. Thus, even if a property located on a mature estate should bring in a bigger profit and value, it is impossible to come against the termination of a lease, which seems to have a significant impact on the selling process.
During the last 10 years, the most consistent narrowing of the gap happened for flats with three and five bedrooms. Most probably, this happened because the availability of such properties increased considerably in non-mature estates, opening new opportunities for homebuyers. Thus, younger properties may soon have similar prices to central properties in mature estates, despite the lack of facilities and amenities in most younger estates.
Learn more from the webpage below,
https://www.straitstimes.com/business/property/price-premium-of-hdb-resale-flats-in-mature-estates-may-shrink-further-report
