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Geylang's Transformation: Financing Your Investment in a Revitalized Area

Geylang's Transformation: Financing Your Investment in a Revitalized Area.

What comes to mind when you hear the word Geylang?

For many, it’s the fruit stalls (Durians), great food and for others, it’s more about the traditional side of what Geylang is famously known for, especially at night.

In the run-up of the property prices and population explosion from 2006 to 2013, we have seen a run-up of property prices and rental cost that led to Geylang becoming an alternative residential location for expatriates working near town.

Geylang is only about 2.5km from Bugis junction and it is also near to Suntec City and Marina Square.

Silently though, Geylang is also gradually known as the second china town where new Chinese citizens and PR congregate to Sze Chuan Food, North Eastern food, Hunan food and so on.

Fruit stalls, great food, and Geylang, with its proximity to the town center, is coming to the fore. In recent years, there have also been many new developments springing up in Geylang.

Changing Face of Red light district

Geylang used to be known for its sex industry. Legal brothels litter across Lorong 4 till Lorong 40. There are also many KTVs and pubs. And many activities spill over to odd number Lorong as many working girls from around the region that came in on tourist visa ends up working the streets or in pubs, illegally. These girls also rent hotel rooms where they also ply their trade.

Many Hotels sprang up between the year 2000 and now as they provided hourly rentals. Hourly rentals of hotel rooms meant that the hotels were able to reap high yields for each room. This led to the tear down of low rise landed shops/houses to make way for hotels.

Where there are women, there are men who would spend. Many good food places can be found in Geylang. Fights are common after people get drunk. Geylang also has one of the highest concentration of religious establishments. Maybe where there is sin, there is redemption?

Map 1: URA Masterplan 2014 with 10 July 2015 Update, iCompareLoan.com

Darker Orange = Residential/Institution.

Lighter Orange = Residential

Dark Blue = Commercial

Light Blue = Commercial/Institution (Previously Residential/Institution, Updated on 10 July 2015, URA, Appendix A)


Geylang Lorong 4 to Lorong 22 has been rezoned from residential/institutional to Commercial/Institutional on 10th July 2015 (URA).

“Institution” excludes funeral parlors and Dormitories in general, all other uses are subject to approval, hence it is not surprising to find many clan associations, religious organization and places of worship being located in Odd number Lorong and Lorong 22, 24, 24a has many religious buildings.

What changes were made to Geylang?

There were many little “Enbloc” developments which were formed by amalgamating typically 3 to 10 house/commercial lots and built into small hotels. You will probably not hear of these enbloc developments in the news. The bigger developments such as those gated apartments could perhaps be made up from 10 to 30 landed lots.

The biggest condominium would be Waterina along with Lorong 40, and it has full condominium facilities and has 398 units.

The bigger condominiums such as Atrium residences along Lorong 28 which was complete in 2008 has 142 units.

Many brothels are retreating from Lorong 28 and beyond Lorong 30 plus. Now many are concentrated in Lorong 6 to Lorong 20. Very few brothels spill over beyond Lorong 24 onwards. Brothels are becoming endangered.

Financing a Property in Geylang

Around 2009

Banks tend to shy away from Geylang in general. Before 2009, many banks shy away from Geylang even number Lorong. That means not many banks would deal in Lorong 4 till Lorong 40. Except for on a case-by-case basis, such as for The Waterina, a 398 units development, completed in 2005, located on Geylang Lorong 40. Even so, the choice of banks was still limited.

The entire market was mostly left to Hong Leong Finance and Singapura finance.

Around after 2010-2011

More banks are able to finance properties from Geylang Lorong 30 or 32 onwards to Lorong 40. However lesser than Lorong 30 is still a challenge.


OCBC and Maybank can finance properties from Lorong 30 upwards. Hong Leong Finance and Singapura Finance continue to be able to finance across all the even number Lorong subject to the customer profile.

OCBC and Maybank can finance Lorong 26, 28 subjects to the project as well as a customer profile.

Some of the lenders impose a loading of 0.25% on top of their usual lending rates for Geylang with even number Lorong.

Generally though, as long as it is for owner-occupied use, 80% loan is possible, subject to TDSR and credit profile for properties above Lorong 30.

Many residential developments sprang up from Lorong 24, 26, 28. The entire area is starting to look and feel more residential as opposed to being a red light district. As such, 1 to 2 banks are able to finance properties in Lorong 26, 28, subject to it being owner occupied and loan-to-value being around 70% and if the credit profile is strong, 80% and good credit profile.

In private conversations with banks, 1 bank (on top of Hong Leong Finance and Singapura Finance) may be able to finance properties in Lorong 6 up to Lorong 24, with loan-to-value capped at around 50 to 60% for clients with good profile. However, many people who opt for 70% to 80% loan will still stick to Singapura Finance or Hong Leong Finance who has loyally supported Geylang properties for many years.

Many banks are viewing Geylang as a risk and impose Lorong restrictions, Loan-to-value restrictions as well as a cap on the quota in terms of the amount of loan lent to this area.

Sometimes you will hear comments such as, “normally we can finance this project, but we have no more quota this month”. This is an example of a cap in the quota to limit their concentration risks. Many banks internally will require Level 2 approval for Geylang properties, this means that any such property financing will be escalated to the next higher management level for their decision.

These restrictions also spill over to odd number Lorong that is near to or around those between Lorong 6 to Lorong 24, but are generally not as restrictive as those in even number Lorong.

Banks still judge that in the scenario of a forced sale, it would take much longer to offload the properties to recover their loan.

Overall, we see Geylang changing in character and flavor. With a tinge of regret, it is perhaps becoming too neat and tidy compared to previously. In orderly Singapore, surely some chaos should be welcomed with open arms, right?

Without the brothels, there will be fewer men, without the men, there will be less nice food and eateries to bring the ladies to, this also means the ordinary Singaporean will also not get to enjoy this good food. This is the same as saying, without flowers, there will be no bees, without bees there will be no honey. What good is it for Geylang to become just another residential estate dotted with terrible food courts?

If you are unsure, you can call a Mortgage Broker for a discussion or do your own Singapore Property market research.

Many outstanding projects at Geylang area are waiting for you to discover. See more details and have the opportunity to receive attractive offers from us.

Adapted from icompareloan.com