Geylang Properties - a growing hot spot for investors.
Geylang Properties - a growing hot spot for investors
MENTION Geylang properties and an unappetising image of shabby shophouses, street girls and sleazy budget hotels springs to mind.
But the much-maligned area is a growing hot spot for savvy property investors chasing high capital gains and rental yields. Property consultant Lee Sze Teck said that since the second quarter of 2009, median prices of newly launched units there have shot up from $545 per sq ft (psf) in the second quarter of 2009 to $1,255 psf this quarter. Ness in Lorong 32, for example, launched early this year, drew average prices of $1,302 psf in June.
Mr Lee, Dennis Wee Group's senior manager of training, research and consultancy, said the interest in the area is growing partly because of the slew of new launches. There are at least 40 projects, comprising 2,190 units, that will be launched or completed in the next five years or so. This will bring the total number of homes in the area to more than 5,500.
There have been 22 launches since 2010 - putting a total of 1,438 units on the market - with 18 to come. About 93 per cent of the flats already launched have been sold, Mr Lee noted.
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"The absolute purchase price is low, yet the rent is high and stable," for Geylang condo
For Geylang condo, The 78-unit Casa Aerata at Lorong 26 and the 62-unit Centra Suites at Lorong 25A are the latest projects to be completed. Knight Frank research head Png Poh Soon noted that most new projects in the area are small, with fewer than 100 units of 818 sq ft on average. The small size and the lower capital outlay make them investor-friendly, he said. Resale flats are also thriving, with prices rising from $410 psf in the second quarter of 2009 to $888 psf this quarter, Mr Lee said.
But Mr Png pointed out that the rate of increase over the last three years has slowed, partly due to new launches in nearby estates like Mountbatten and Telok Kurau. The buoyant market seems to fly in the face of conventional real estate wisdom, which demands good transport links and other key facilities to attract buyers.
Geylang Properties, which is infamous for its red-light district and registered brothels, does not have an MRT station, although it is a short drive or bus ride from the city centre. But bad traffic conditions often plague drivers, a situation worsened by the quick pace of development in recent years. Traffic has increased markedly, leading to parking space shortages along the narrow lanes, also known as "lorongs". There are no big malls in the area and at night, it is a common to see prostitutes plying their trade along some of the evennumbered lanes.
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