Source : Straits Times - 25 Oct 2008
More foreign students are renting flats, while PRs are buying them
A FEW years ago, the HDB estate of Sunset Way in Clementi Street 12 was a sleepy village of old-school shops selling joss sticks and simple grocery items.
It has since morphed into a bustling mini-Holland Village lined with alfresco eateries and upmarket specialist shops, boasting a cosmopolitan clientele.
It is but one example of how some HDB heartland areas have changed over the years.
At the heart of this change is the influx of foreigners from all walks of life who now live in public housing all over the island.
Property agency bosses told The Straits Times they have seen a surge in the number of permanent residents (PRs) buying HDB homes.
PropNex chief executive Mohamed Ismail said PR purchases now make up one out of every five HDB flats sold by his firm. This is an increase of 50 per cent from two years ago, he said.
At C&H Realty, ERA Asia Pacific and HSR Property Group, all three firms also report a surge in the number of PR buyers - up to 25 per cent of their HDB transactions. The four firms corner most of the HDB resale market.
ERA’s assistant vice-president Eugene Lim said that if the trend continued, PR transactions could make up 35 per cent of all HDB sales within two years.
With rentals going up islandwide for the last couple of years due to the property bull run, PRs are finding that buying - not renting - is the wiser option.
HSR’s executive director Eric Cheng notes that these PRs, many from India and China, with some from Europe or Australia, prefer to buy into new estates such as Punggol and Sengkang, or those located near the city.
Some even congregate where ethnic enclaves have formed, such as Americans in Woodlands, Indians in Little India - along with shops and services which cater to a particular ethnic group, he added.
Then there are the singles, who come out in droves when they reach 35 to snap up flats with good locations like Tanjong Pagar, Queenstown and Bukit Merah.
These ’single income, no kids’ individuals often do not think twice about splashing out big bucks to spruce up their designer-styled flats, lending a more trendy vibe to these heartland locations.
One other social group that’s changing the heartland mix: foreign students.
Mr Cheng said HDB flats are popular with foreign students, especially those who cannot afford private apartments or do not qualify for school hostels.
Some popular areas for this group are Clementi, Dover, Jurong East, Commonwealth, Queenstown and even Tampines, he added.
Retail consultant Tan Puay Hoon of Bole Business Services, who worked on the rejuvenation of Sunset Way, said that as the demographics of HDB estates change, so does the retail mix.
‘Mamak’ shops have been replaced by trendy convenience stores, old-style bakeries have gone upmarket and wine shops have sprouted in estates to cater to a more diverse, ‘globe-trotting’ crowd, she observed.
Well-known Japanese fashion label Comme des Garcons, whose clothes are known to cost up to thousands of dollars, even set up shop in the HDB enclave of Bukit Merah View a year ago. It has sinced moved to Mount Sophia Road.
To help heartland shops meet the pace of change and renewal, the HDB launched a new Revitalisation of Shops scheme last year. The scheme has set aside $6 million to help older HDB shops compete with malls.
Ms Tan also noted that new services in the beauty and wellness sector such as spas, massages and manicures have also sprouted in the heartland to meet demand from a more well-heeled population.
Following the spate of en bloc deals done last year, many cash-rich home-owners turned to the HDB market and paid record prices for flats in good locations. The highest so far: $890,000 for an executive flat in Mei Ling Street.
One PropNex agent, Ms Celeste Phua, said home buyers have broken a psychological barrier to high flat prices.
In recent months, she has sold about four or more HDB flats monthly in the Bukit Merah area for above $600,000.
Meanwhile, the HDB also launched a new rejuvenation plan last year called ‘Remaking Our Heartland’ to enhance the value of homes and neighbourhoods through upgrading and estate renewal projects.
Plans for areas such as Dawson, Yishun and Punggol have been announced, and the towns will be updated with new commercial and recreational facilities such as parks and waterways offering water sports.
Unlike prices of private property which have started falling, HDB flat prices increased 4.2 per cent in the third quarter, according to the board’s latest data released yesterday.
Mr Ismail said public housing remains popular as private property prices are still beyond the reach of most residents.
He added that HDB prices would continue to hold despite the economic downturn as supply was limited.
‘HDB flats also give owners very good rental yields - around 10 per cent - because there’s no lack of demand in the HDB rental market,’ he said.
Meanwhile, Ms Tan said heartland retailers have to ‘change their mindset and upgrade their business model to meet today’s lifestyle’.
Although heartland shops might lose out on the glamour front when compared to shopping hubs like Orchard Road, their trump card is their affordability.
‘If the HDB estates continue to provide residents with the right products and services at the right price, it will always remain popular among citizens and foreigners alike.’
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