How the Thomson Line Affects Your Property Prices

The new Thomson MRT line is set to move more than passengers. It’s going to move housing prices in the more ulu areas, like Woodlands and Springleaf. The residents there can celebrate. When they’re not digging wells and fending off tigers, that is (Do they have electric lights over there?) But residents aside, property investors might also sense opportunity. Let’s see what the potential pay-offs are:

 

MRT train going past flats

Uncle, turn left, turn left! You missed my house!

 

The Thomson Line

The Thomson MRT line stretches 27 kilometres, and consists of 22 train stations from Woodlands to Marina Bay. It’s got a three-part completion schedule, with end phases in 2019, 2020, and 2021. The Thomson line connects some of the less accessible neighbourhoods to the central region.

As a side benefit, the extended line will ease the crush of passengers, reduce our reliance on cars, and supply Stomp with enough content for another decade.

But our attention is on how the line impacts property. Some general changes will be:

  • Momentary decrease in rental income
  • Eventual rise in capital gains

 

Construction site

Don’t drill in the morning when I’m sleeping, in the afternoon when I’m reading, in the evening when I’m eating, in the night when…

 

We also see three main areas that deserve attention:

  • Upper Thomson Road – Great for Retailers
  • Lentor – A Rent Issue
  • Woodlands – An Investment Opportunity

 

Momentary Decrease in Rental Income

Ever lived next to a construction site? It’s like hosting an amateur rock festival in your living room. Don’t expect tenants to be overjoyed.

Properties located close to construction sites (around 300 metres) might see a drop in rental income. How steep this is depends on the tenants: Those who are rarely home during construction hours might not care, whereas those with families will start looking for alternatives.

 

Man sleeping on the boardwalk

Landlord? Is that you?!

 

If you’re one of the affected property owners, you’d best prepare to re-negotiate the lease.

The good news is, rental income will jump substantially once work is complete. But with the first phase ending in 2019, that’s a long time to wait. If you’re heavily dependent on rental income, you’d best consider refinancing the property loan.

Try looking on comparison sites like SmartLoans.sg, to get a lower interest rate.

 

Eventual Rise in Capital Gains

Property investors are already exploring the relevant areas. It’s expected that properties within 500 metres of the new train stations will appreciate by 20 – 30%. Property investor Charlie Sng says:

In some areas, like Upper Thomson, I think the MRT station will cause prices to go even higher. Because it’s a very inaccessible area, and there is more necessity for public transport. 

I am sure prices will rise in general, but I think it’s in the more ulu places that the station will really affect gains. I am not certain if the prices will rise immediately, or when the line is complete in 2021. We will see over the next few months.

 

MRT train map

Where do these $25k a month property analysts get their ideas from? I guess we’ll never know.

 

Speaking of which, here are three interesting areas to watch:

 

1. Upper Thomson Road – Great for Retailers

A common complaint about this area is that it’s hard to get to. The business outlets (shop houses, restaurants, etc.) are just plodding along; they’re stuck servicing the immediate residents.

In particular, Thomson Plaza has long had a lukewarm reception from businesses. Rent is very affordable, but the stores there don’t bank on passing trade. I spoke to one of the store proprietors, who only wanted to be known as Liew:

Most customers are regulars. This area is not like in town, where thousands of people will walk by every day. And even among our regulars, some complain that they don’t like to drive so far to come here. I think when the MRT is up, business will definitely improve. The question is whether my rent will also go up.”

 

Crowded MRT train

So exciting! It’s our first time seeing this foreign country called “Thomson”!

 

Slim chance, Mr Liew. Once the MRT station is built, businesses in the area can expect a lot more foot traffic…and consequently, higher rent. Thomson Plaza might see an invasion of higher paying (and more upmarket) tenants.

Still, the increased revenue might more than cover the higher rent.

 

2. Lentor – A Rent Issue

Lentor consists mainly of private apartments, and a lot of them are rented. The construction of the train station might drive out a few tenants.

I spoke to a landlord, who owns some properties along Lentor Green. He refused to give his name:

I think it will be good in the long run, to have the station here. But I don’t think my tenants will be happy with the noise and the dust from construction. If they have to take care of a baby, or they are studying, it’s bad for them.

I am already prepared to lower the rent if I need to. I’m not happy, but once the station is complete, I hope I can recover my losses.”

 

Seletar reservoir scene

I said, THERE’S PEACE AND SERENITY IN THE AREA. Can you hear me over the construction?!

 

So if you’re renting in Lentor, there’s at least one landlord prepared to lower the rent. In general, tenants there might want to negotiate aggressively, once construction starts. But you can fully expect your rent to sky rocket after completion.

 

3. Woodlands – An Investment Opportunity

Woodlands is still underdeveloped, which makes it ideal for property investors. Woodlands North, in particular, is earmarked for residential development.

Once the Thomson line is complete, it will run from Woodlands North, through Woodlands and Woodlands South, and right to the heart of Marina Bay. This eases Woodland’s accessibility problem, which has been the area’s bugbear for years. Yes, it’s still a long ride to town; but at least now it’s a direct route.

 

woodlands mrt station

Ah, it’s nice to see we’re bringing civilization to the fringes. Where are the rubber tappers?

 

The Thomson line might be the winning complement to URA’s plan for a Woodlands Regional Centre (WRC), which aims to bring office and retail space to Woodlands.

This upcoming combination of factors (the WRC and the Thomson line) makes Woodlands an attractive investment option. You can also follow us on Facebook, and we’ll update you as the news develops.

Image Credits:
Richard Chai, modery, kodomut, DearEdward, DemRomero, _Yuki_K_

How do you think the Thomson line will affect property prices? Comment and let us know!

Get more Personal Finance tips and tricks on www.MoneySmart.sg

Click to Compare Singapore Home Loans, Car Insurance and Credit Cards on our other sites.



More From MoneySmart
Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Billionaire finds wreck of WWII ship in Phl
    Billionaire finds wreck of WWII ship in Phl

    Microsoft co-founder Paul Allen says he has found the Japanese Navy’s biggest warship at the bottom of the sea in the Philippines, 70 years after US forces sank it. Allen posted a photo on Twitter on Tuesday of the World War II battleship Musashi’s rusty bow, which bore the Japanese empire’s Chrysanthemum seal. The American billionaire, who has also pursued space exploration, said his luxury yacht and exploration ship, the M/Y Octopus, found the Musashi one kilometer (1.6 miles) deep on the …

  • US ambassador recovers from knife attack praised by N. Korea
    US ambassador recovers from knife attack praised by N. Korea

    The US ambassador to South Korea, Mark Lippert, was recovering from surgery Thursday after having his face and arm slashed by a knife-wielding activist in an attack applauded by North Korean state media. The United States condemned the "act of violence" which saw the ambassador rushed to hospital where his condition was described as stable after two-and-a-half hours of surgery that included 80 stitches to a deep gash on his right cheek. During the assault, Kim screamed a slogan in favour of …

  • New Moro rebel group emerges
    New Moro rebel group emerges

    A radical Muslim cleric trained in the Middle East and considered one of the leaders of the Bangsamoro Islamic Freedom Fighters (BIFF) has broken away from the terror group to form his own band of jihadists who are now reportedly providing sanctuary to bomb expert Basit Usman and at least five foreign militants, the military said yesterday. Armed Forces of the Philippines (AFP) spokesman Col. Restituto Padilla, citing reports from the field, said the Justice for Islamic Movement (JIM) was …

  • Miriam bucks house arrest for Enrile
    Miriam bucks house arrest for Enrile

    Sen. Miriam Defensor-Santiago believes granting Senate Minority Leader Juan Ponce Enrile house arrest, while former President Gloria Macapagal-Arroyo remains under hospital detention, will violate the equal protection clause of the Constitution. “That’s already a violation of the equal protection of the law,” she said. …

  • World's oldest person wonders about secret to longevity too
    World's oldest person wonders about secret to longevity too

    TOKYO (AP) — The world's oldest person says 117 years doesn't seem like such a long time. …

  • Ohio mom, boyfriend guilty; child emailed teacher for help

    PORTSMOUTH, Ohio (AP) — A woman and her boyfriend pleaded guilty to raping her young children and were sentenced to prison on Wednesday, a year after one of her daughters emailed a teacher for help and said she and her siblings were being chained to their beds, deprived of food and sexually assaulted. …

  • 8 of 10 cities most at risk from natural disasters located in Phl – study
    8 of 10 cities most at risk from natural disasters located in Phl – study

    Eight of 10 world cities most exposed to natural hazards are in the Philippines and more than half of the 100 cities most exposed to earthquakes, storms and other disasters are in four Asian nations, according to a research. The study, published on Wednesday by risk analysis firm Verisk Maplecroft, analyzed the threat posed by storms, floods, earthquakes, tsunamis, fires, volcanoes and landslides in more than 1,300 cities. The study found that the 10 cities most at risk are Port Vila in …

  • Ex-crew recognizes photos of sunken Japanese battleship
    Ex-crew recognizes photos of sunken Japanese battleship

    TOKYO (AP) — A former crewmember on a Japanese battleship that sank during World War II said Thursday he recognized photos of wreckage discovered this week off the Philippines by a team led by Microsoft co-founder Paul Allen. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options