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Buying An HDB Flat For Staying And Investing: Why Clementi (District 5) Is A Prime Area for High Rental Demand

Buying an HDB flat can be more than a home.


This article was contributed to us by Louis Tay, New Launch Sales Lead of Ohmyhome, Singapore’s Leading One-Stop Property Solution.

With the need for social distancing during the pandemic (especially during Circuit Breaker last year and Phase 2 (Heightened Alert), work-from-home became the default work arrangement. This re-introduced the importance of having a home or finding the right one with flexible spaces for rest, work, and play.

Buying a home has always been regarded as an important financial decision and many Singaporeans perceived it to be a safer investment option than the volatile stock market. During the prolonged period of working from home, our newfound familiarity with our homes invites several questions over the future of the real estate market.

Despite the global economic turmoil due to the pandemic’s early days, Singapore’s real estate market remained resilient. Reports show that property prices rose in the last quarter of 2020.

But Why Should You Consider Clementi For Real Estate Investing?

In 2020, more than 80 HDB resale flats were sold for over $1 million, compared with the 64 for 2019. 60% of the $1 million HDB resale deals were flats located in Boon Tiong Road (Bukit Merah) and Dawson Road (Queenstown), both at the outskirts of Clementi. These sellers who are now in the market for a new home wouldn’t need to look further than Clementi as the town remains a popular choice for home buyers and property investors, mainly because of its good location.

Clementi Is Close To Singapore’s Second CBD And Tech Hub

Located within District 5, Clementi’s relative proximity to the Core Central Region (CCR) may appeal to those who prefer living in the Central Business District (CBD) fringe.

It is located between Jurong East and Lakeside, a commercial business hub and recreational hub, respectively. URA has released its plans to make Jurong East the second CBD of Singapore. This would be served by the new Jurong Region Line, expected to launch in 2026, as well as the Cross Island Line. It can be an attractive factor for home buyers looking to live at the edge of these developments.

Clementi is also close to one-north, a tech-oriented, research and development precinct with prestigious tenants, such as Google, Grab, Shopee, and Unilever. Even Chinese tech behemoths, such as Tencent and ByteDance (the parent company of Tik Tok), Paypal, Rakuten, Amazon, Twitter, Zoom, Kajima, Johnson Controls, and DB Schenker have announced their plans to set up regional offices and data centres in Singapore.

Read Also: Neighbourhood Estate Guide: Why Tanjong Pagar Will Be Even More Desirable In The Future 

How Would Tech Firms Improve The Potential Of District 5 For Real Estate Investment?

Software engineering talents are mobile and fluid. The best and brightest will move wherever they feel will provide job satisfaction and greater access to cutting-edge research or technology. And right now, quite a few of them can be found in District 5: Shopee is located in 5 Science Park Drive at Kent Ridge, Google and Unilever in Mapletree Business City at Labrador Park, and Grab with an office at one-north.

These companies have the capital to expand and attract high-income employees who could raise the rental demand in the area. In fact, some 50,000 ICT jobs are expected to be created in Singapore; with the new work visa, Tech.Pass, which is aimed at attracting tech entrepreneurs and leaders, an influx of tech talent can be expected to flock to Singapore to work on pioneering and disruptive innovations. This could raise the appeal of living in areas like District 5 as they move closer to their offices.

Clementi As An Education Hub Can Attract Families And Ensure Longer Leases

One consideration for buyers, especially those with families or couples intending to raise their own, is whether there are schools in the vicinity of their home. Having educational institutions nearby elevates an area’s appeal as the closer a school is to a home, the higher the convenience of schooling nearby and may improve the chances children have of getting into said school (especially during their younger schooling years). When a family’s children attend a school nearby, they’re less likely to move, which means a longer lease: a definite upside for landlords.

Source: Street Directory 

Clementi is the only area you can call a ‘university town’ with the high number of educational institutions surrounding it.

Fortunately, Clementi is well-known for being an education hub, home to many top-tier schools. It includes the following:

  • National University of Singapore (NUS)
  • Singapore Polytechnic (SP)
  • Ngee Ann Polytechnic (NP)
  • Anglo-Chinese Junior College (ACJC)
  • Nan Hua High & Primary School
  • Clementi Primary School
  • Chatsworth Preschool

Private Home Prices And Sales Are On The Rise

Apart from Clementi’s strategic location and proximity to employment generators, the private residential property market is doing well. URA flash estimates reveal private home prices rose 2.1% in Q4 2020, the sharpest increase since Q2 2018 when they jumped 3.4%, followed by a slew of property cooling measures in July that year. The rising prices are despite COVID-19 impact on Singapore’s economy, which is expected to shrink 6% for 2020.

New launch projects, such as Clavon in Clementi and Ki Residences at Brookvale, received strong sales.

Clavon sold 473 units at a median price of $1,673 psf, while Ki Residences sold 172 units at a median price of $1,766 psf. Together, the two new developments accounted for 53% of new home sales in December 2020.

More than 10,000 private housing units were sold by developers last year, despite fewer launches amid the pandemic. It is 1.1% higher than the 9,912 units sold in 2019, based on URA flash estimates.

Increased Private Property Market Rental Activity

The rental volume for private properties also increased 5.3% month on month. About 4,414 units were rented in December 2020, compared with the 4,193 units in November 2020. The year-on-year rental volumes are also 0.3% higher.

Volumes are 15.4% higher than the five-year average volume for December. 35.0% of rent came from the Rest of Central Region (RCR), which comprises District 5, where Clementi is located.

That’s good news for property investors. Plus, as the government rolls out the vaccination programme, the housing demand could increase as the economy and job market improve.

To start, they can look at District 5’s new home launches, including Clavon, Normanton Park, and One-north Eden. The former two project’s success could be a sure sign of One-north Eden’s positive results when it previews early this year.

Top 10 Condos In District 5 Ranked By 5-Year Capital Gain

Property investors should also identify a property’s capital growth potential. So here are the top 10 private properties in District 5 ranked by five-year capital gain:

Project Name Tenure Completion Capital Gain (%) Historical Price ($PSF) Current Price ($PSF)
Palm Mansions Freehold 1998 23.6 884 1,093
The Parc Condominium Freehold 2010 21.9 1,098 1,339
Waterfront @ Faber 99 years 2017 16.7 1,155 1,348
Carabelle 956 years 2009 16.2 1,139 1,323
Bijou Freehold 2018 14.8 1,749 2,008
Gold Coast Condominium Freehold 1994 14.2 950 1,085
Palm Green Freehold 1999 14.2 925 1,058
Village @ Pasir Panjang Freehold 2016 13.7 1,123 1,277
Botannia 956 years 2009 12.3 1,078 1,211
Ventana Freehold 2003 11.3 1,098 1,222

Source: URA, https://www.squarefoot.com.sg

Determining the potential rental income you can receive when renting out a property is also essential. Here are the top 10 private properties with a gross rental yield of 3% and above.

Top 10 Condos With Gross Rental Yield Of 3% And Above, And More Than 50 Rental Units

Project Name Tenure Gross Rental Yield (%) Min. Price ($PSF) Avg. Price ($PSF) Max. Price ($PSF) Min. Rent ($PSF PM) Avg. Rent ($PSF PM) Max. Rent ($PSF PM) # Rental
Viva Vista Freehold 4.2 1,145 1,445 1,569 2.67 5.11 6.57 58
West Bay Condominium 956 years from 1991 3.7 794 838 907 1.86 2.60 3.29 66
One-north Residences 99 years from 2005 3.5 1,124 1,408 1,616 2.18 4.11 6.36 125
Seahill 99 years from 2011 3.4 1,187 1,350 1,430 3.13 3.87 5.11 77
Dover Parkview 99 years from 1993 3.4 823 1,406 1,208 1.96 2.95 3.68 120
Blue Horizon 99 years from 2000 3.4 955 1,039 1,131 2.43 2.93 3.68 106
The Rochester Residences 99 years from 2005 3.3 1,161 1,288 1,399 2.40 3.58 5.06 91
Heritage View 99 years from 1996 3.2 1,099 1,193 1,261 2.52 3.20 3.95 96
The Trilinq 99 years from 2012 3.2 1,042 1,427 1,643 2.52 3.77 4.73 90
Parc Riviera 99 years from 2012 3.2 1,060 1,389 1,588 2.31 3.65 5.33 138

Source: URA, https://www.squarefoot.com.sg

Plan A Real Estate Investment Strategy With A Super-Agent And Financial Advisors

If you live in Clementi and your HDB flat is reaching its minimum occupancy period (MOP) this year or the next, now is the best time to craft a real estate investment strategy with a trusted real estate advisor and mortgage specialist. Singapore’s real estate market is still relatively unpredictable, which means there could be unforeseen opportunities popping up. Having professionals in your corner can guide you in your investment journey.

Ohmyhome Super Agents are ready to visit countless private properties with you, go to show flats, provide you with detailed district analysis, and property price trend reports. Engage one now by calling +65 6886 9009.

Ohmyhome is Singapore’s leading PropTech Solution and a CEA-licensed real estate agency. It makes property transactions simple, fast and affordable through their DIY platform, agent services, mortgage advisory, conveyancing services, home staging, home renovation and more.

To help plan a real estate investment strategy, you can engage Ohmyhome Super Agents to provide you with detailed district analysis, property price trend reports and a comprehensive range of services. Visit Ohmyhome’s website, download the Ohmyhome app or reach them by calling +65 6886 9009.