IF A small and quiet retreat close to nature sounds like home, then the Chestnut and Dairy Farm areas might be the place to be.
The Chestnut Avenue enclave comprises a low-density area with landed houses, including good-class bungalows, and a high-density zone, with mature and upcoming condominium developments. Both sections are near leafy spots such as the Dairy Farm Nature Park, Bukit Timah Nature Reserve and the Central Catchment Nature Reserve.
Recent new launches such as SP Setia’s 483-unit Eco Sanctuary – where buyers have snapped up more than 160 units at a median price of $1,050 per sq ft (psf) – have created even more buzz in the sleepy estate.
More than 1,800 new homes in five projects are expected to be completed by 2018, Dennis Wee Group (DWG) noted.
Experts say the flurry of activity began with the launch of City Developments’ 429-unit Tree House in April 2010 – a time when the market was still untested.
The success of the project – it has sold out – set the stage for others to take flight, such as Eco Sanctuary, the 496-unit Foresque Residences, and the 40-unit landed project Michaels’ Residences.
A Dairy Farm Road site that can yield about 390 homes was sold in September this year.
Prices of new flats have risen from the $800 psf to $900 psf range in early 2010, to between $1,150 and $1,300 psf now for similar-sized apartments, according to Savills Singapore research head Alan Cheong.
That is a 44 per cent increase in just under three years.
Selling prices at the recently transacted Dairy Farm Road site are also expected to top $1,400 psf when launched, he said.
Similarly, resale prices for freehold properties have risen in tandem, jumping by up to 10 per cent in the past year, R’ST Research director Ong Kah Seng added.
Prices are generally on the uptrend, as both buyers and sellers anticipate improved accessibility once the Downtown MRT line is completed, he said.
“Cashew Heights condo resale prices average $920 to $950 psf, while prices at The Dairy Farm were about $1,000 psf recently,” Mr Ong noted.
However, rental demand is more subdued, as Cashew MRT station, which will increase accessibility to the city centre, will not be completed until 2015.
Mr Lee Sze Teck, senior manager of training, research and consultancy at DWG, said non-landed housing rents range from $2.20 to $2.50 psf a month, giving a gross yield of 2.4 to 2.7 per cent.
“But then the existing developments are almost 20 years old and are larger in size. The newer developments with smaller units should be able to fetch higher rentals,” he added.
“The area tends to attract more owner occupiers than investors because of the living environment and distance from major employment centres. The lack of an MRT station at the moment also affects the draw of the area to tenants.”
Shoppers have Rail Mall and Bukit Panjang Plaza, while the area’s schools include CHIJ Our Lady Queen of Peace, Chestnut Drive Secondary School and Bukit Panjang Primary School.
Although the area is a quiet estate, Savills’ Mr Cheong points out that it could get congested once all the residential sites are sold and completed.
There are also two parcels zoned for education that could add to the congestion.
But the completion of the Downtown MRT line and the rejuvenation of the western part of Singapore bode well for the area’s potential.
“Not only will the Upper Bukit Timah, Cashew, Chestnut and Hillview areas benefit from new MRT stations, they can finally be positioned as mid-tier private homes which are conveniently located,” R’ST’s Mr Ong added.
While supply will increase with the new completions, investors can expect a broader, stronger tenant demand base, as the gradual development of Jurong Gateway will prompt major firms to relocate.
“While there are private homes in Lakeside and Jurong East to cater to them, (some) may consider the Upper Bukit Timah area since it will be better connected to the West with the completion of Downtown Line 2,” Mr Ong said.
(Source: The Straits Times)