Thursday, January 8, 2009

Punggol the next big thing?

PM Lee’s vision of water town has made once-sleepy town hot

WHEN business development manager Roy Lim moved into Punggol five years ago, he wondered if he had made a big mistake.

The infrastructure was lacking and the amenities were inadequate.

As a result, Punggol was often viewed as the poorer cousin to the up-and-coming, bustling Sengkang, which was just a street away.

Mr Lim, 34, who wondered then if he should have bought in Sengkang instead, may have the last laugh after all.

Like many Punggol flat-owners, he is now eligible to sell his five-room flat after fulfilling the minimum five-year occupation period.

To his delight, he found out that resale flat prices in his estate are higher than similar flats in Sengkang.

For example, the median resale prices for five-room flats in Punggol was about $391,500 in the third-quarter of last year, compared to $374,000 in Sengkang, according to figures from the HDB website.

A check on HDB’s resale transaction records showed that 20 out of the 58 five-room flats sold in Punggol last month fetched at least $400,000.

In contrast, only 12 out of the 57 five-room flats sold in Sengkang fetched $400,000 or more.
For Mr Lim, all those years of enduring the ‘ulu’ (Malay for remote) estate and its lack of facilities are finally paying off.

He and his wife put their place up for sale recently. Its current valuation is about $410,000.
They are looking at a tidy profit of about $160,000, as they had bought it for about $247,000 in 2003.

Said Mr Lim: ‘I was quite surprised but happy to find out that the valuation is so high. The money will come in useful because it’ll be a tough year. We’ll also be able to free up some cash to keep aside for a rainy day.’

The couple are planning to upgrade to a condo in the east.

He initially regretted buying a place in Punggol.

Mr Lim said: ‘It was frustrating when we first moved in. The LRT station was not opened, there were no coffee shops or provision shops nearby and my block wasn’t even cable-ready.

‘I couldn’t watch soccer and had to go to my friend’s place every weekend to catch the matches.’

To make matters worse, his handphone signal was so weak in the flat that it constantly switched to an Indonesian service provider.

Nights were depressing because many of the blocks seemed deserted, with few lights coming from the units. Many owners didn’t move in because of the lack of amenities.

But the situation has improved with the opening of the LRT stations, a mall, more bus services and schools over the couple of years.

So, what’s the appeal about Punggol?

Its prices received a boost when Prime Minister Lee Hsien Loong unveiled the Punggol 21-plus vision during his 2007 National Day Rally speech, said property watchers.

The coastal town will boast features such as a freshwater lake and a waterway running through the estate.

Also, Punggol’s condo-like and newer units add to their desirability.

HSR Property Group executive director Eric Cheng said that the Punggol 21-plus endorsement stirred up valuation prices in that area.

He said: ‘The estate is certainly more bustling now, with more amenities than before. I remember when I was in that estate many years ago and I couldn’t get a taxi. The situation is much better now.

‘If it’s going to be the only water town in Singapore, buyers will pay some premium for it. It will be the next big thing to come.’

Mr Cheng said that Punggol flat-owners typically enjoy higher profits from the sale of their units compared to Sengkang residents.

This is because the first batch of Punggol flats were eligible for sale at the end of 2006, when the property market was already on the mend.

In comparison, the first batch of Sengkang flats were available for sale in 2003, when the property market was still in the doldrums.

ERA Asia Pacific associate director Eugene Lim added that Punggol buyers are also looking at their purchases as a form of investment.

He said: ‘With the concrete plans to do up Punggol estate, flats there will command a higher premium compared to Sengkang.

‘If you go to Punggol, it’s not so congested. Some people are willing to pay more for a less built-up area, even though amenities are still quite lacking.’

Source : New Paper - 8 Jan 2009

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