Tengah - Priced IN

Disclaimer

1. Readers are advised to use information available here as study guide and use it at your own risk. 

2. Please note that changes/ update based on available information will be made from time to time, readers are advised to check on this page or www.hausanalyst.com regularly.

3. Analysis was done based on available data at the time of publishing of this review. 

Tengah will be the next test-bed for new township evolution in Singapore. This new township will come with the first District Cooling approach to include residential usage in Singapore, smart transportation system which includes driverless vehicles, etc. This new township will house up to estimated 42,000 new housing units for which up to 70% will be of public housing.

Amidst all the buzz, we are more interested to know what is the price to pay to root yourself in this new township. Knowing the surrounding pricing is like knowing your competitor’s strength and weakness. This knowledge will let you hold the upper hand when you decided to sell after MOP (minimum occupancy period). Next to this new town along the eastern fringe (bounded by Bukit Batok Road), a handful of public housing has been launched as recently as 2017. Lining along Bukit Batok Road, there are West Ridges @ Bt. Batok (Nov 2013), West Edge @ Bt. Batok (Feb 2015) as well as West Scape @ Bt. Batok (Aug 2017). In the North East, Keat Hong Pride (May 2015) is the only newer BTO launches after 2010. 

For the price comparison analysis, we will be using 4-rm and 5-rm launch price data from Keat Hong Pride (Choa Chu Kang), West Ridges @ Bt. Batok as well as West Scape @ Bt. Batok to compare with the recent Nov 2018 BTO in Tengah – Plantation Grove (Phase 1 of Tengah residential development) which comprises 1,620 units in total. Since the size of the units may be different by no more than 1sqm, we have made an adjustment to match both at the same size to reflect a more accurate price comparison.

For 5-rm price comparison, we selected the most expensive 5-rm stack in Tengah Plantation Grove to compare with the most expensive 5-rm stack in West Ridges @ Bt. Batok which was launched back in 2013. The price at Tengah Plantation Grove seems to be at least S$6,656 - S$7,585 (with price adjustment to match 113sqm and price taken from level 8 and above) more expensive than that across the road at West Ridges @ Bt. Batok. After a soft take up rate when it was launched, there has been a downward adjustment in terms of pricing for West Ridges @ Bt. Batok and the price difference have increased to S$15,333 - S$16,262 (with price adjustment to match 113sqm and price taken from level 8 and above). When comparing between the most affordable 5-rm stacks for both developments, the price difference increases to S$15,956 - S$16,885 (with price adjustment to match 113sqm and price taken from level 8 and above). The small price difference can be attributed to future proximity to the new Tengah Plantation MRT station (JE1) which is at the doorstep of Plantation Grove development and within 500m to West Ridges @ Bt. Batok. With Jurong Region line only expected to be in service from 2026, residents at West Ridges @ Bt. Batok are paying at least 10 years in advance for infrastructure which they may not get to enjoy after their MOP period arrive. 

What about development which is further away from MRT station / future MRT station need to pay for? To illustrate this, we compare the most expensive 5-rm stack at Tengah Plantation Grove vs most expensive 5-rm stack at West Scape @ Bt. Batok (launched in 2017 and also located along the fridge of Tengah township) which is more than est. 1km away from either current Bt. Gombak MRT station (NS3) or future Tengah Plantation MRT station (JE1). The price difference shown a larger quantum of S$46,500 - S$54,800 (11.0% - 13.0% compared to 2.0% - 4.0% at West Ridges @ Bt. Batok). Note that we only use units from level 8 and above as sample.

A common understanding of new public housing pricing is that launch price will be pegged to recent surrounding resale transaction (as shown in the graphic). Based on the given information, a 5-rm comparable resale prices in the vicinity of Tengah is in the range of S$456,000 (115sqm) – S$598,000 (118sqm). This price range translate to S$368psf – S$470psf compared to the most expensive 5-rm unit in Tengah Plantation Grove which is at S$379psf (2.9% more expensive than the lower range of current 5-rm resale price).  The upper range of a comparable resale unit which is at S$470psf is at least 25% more than the most expensive 5-rm at Tengah Plantation Grove (Note that the unit is a 118sqm unit which is almost comparable to a 120sqm 3-gen unit at Plantation Grove). Thus, this upper range price may not truly reflect the current resale pricing for 5-rm. The good news is the 3-gen unit at Plantation Grove is cheaper in terms of psf (per square foot) price compare to the most expensive 5-rm at the same development.  

To read the full report including prices for 4-rm, please follow this link : https://www.hausanalyst.com/bto-analysis/pricing-research-2019-tengah-new-town

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