Residents of Singapore have long entertained the East Side – West Side battle for superiority. From food blogs, locations of interest, tourist attractions, to sports venues, the battle for the top spot on the small island of Singapore has yet to have conclusive results. Has the West Side got an edge on the topic of the growth of property prices?
PLB’s Quarter 2 report has found that District 22 (Lakeside, Boon Lay, Jurong, Tuas) had a 6.9% Compounded Annual Growth Rate (CAGR) from 2019 to Q2 2022. This places the west, more specifically, District 22, as the second highest growth district in the OCR.
This is nothing short of remarkable. Most would expect districts which are closer to town to do better. However, in light of skyrocketing real estate prices, the OCR seems to be catching up. Affordable options will get more and more popular as demand cools with new regulations, restricting the purchasing power of some participants in the market.
In this article, we will cover the Top 5 Growth Condos in District 22 (Lakeside, Boon Lay, Jurong, Tuas). We will analyse them using the MOAT Analysis to see if we can find what these top growth condos have in common. Do note that this is not a buy or sell recommendation, it is just an article rating the top 5 condos by growth.
Fifth Place: Lakeville
Lakeville comes in at fifth place when we look at the top growth condos in District 22. It is a 99-year leasehold condominium with its lease starting in 2013. It was completed in 2017, with a total of 696 units. It is located approximately 550m east of Lakeside MRT, which is less than a 10 minute walk away.
Lakeville is also surrounded by multiple schools. Shuqun Primary, Yuhua Secondary, Fuhua Secondary, and Canadian International School are all located within walking distance from Lakeville. This makes it a convenient location for families whose children are attending these institutions.
Looking more broadly at the location, Lakeville is located between Lakeside and Chinese Garden MRT. It is also located above Jurong Lake. While this location might seem foreign and “ulu” to residents of other areas in Singapore at the moment, the years moving forward might see tremendous change and growth in this area.
The URA Master Plan of the Western Region shows multiple developments on the fronts of Transportation, Commerce, and Residence. Tengah Town will be a massive residential estate with a mix of public and private housing. Jurong Lake District and Jurong Innovation District will develop the west in terms of its spaces for work, play, and commerce. Jurong Region Line would make travelling throughout and into the region much easier and faster.
Looking at the future development of the Western Region, it is no surprise that the growth prospects are good. The fundamentals for growth are in place for this district and it would be a matter of time to see these new additions materialise.
That being said, the specific project Lakeville scored an average of $1,537 psf from 2019 to 2022Q2. The transaction volume in this same period totalled 71 transactions. Lakeville had a CAGR of 3.7% and an Absolute growth of 11.5%. This is modest growth for this relatively new condo.
Part of the reason for this modest growth may be the interesting unit size distribution. A large proportion of units are sized around 601-800 sqft. These smaller apartments mostly have rental transactions rather than sales. On the other hand, the larger units sized above 1,100 sqft have been the majority of the sale transactions.
In addition to the reason above, Lakeville is already priced slightly higher than the condos in its immediate vicinity. The modest growth in this condo may also be partially offset by the higher average psf. Nonetheless, the positive future prospects of this region might still push prices up across the board.
The MOAT Analysis gives Lakeville a high score of 70%. It has a 5 on Rental Demand and Exit Audience and 4 on Parents’ Attraction Effect, Quantum Effect, and Bala’s Curve Effect. Overall, due to the lower price points in District 22 and the Western Region, the average price of Lakeville is slightly elevated. This brought down the disparity scores. Nonetheless, Lakeville comes in as a solid fifth in the top growth condos in District 22.
Fourth Place: The Mayfair
The Mayfair is a 99-year leasehold condominium with its lease starting in 1996. The condo was completed in 2000, with a total of 452 units. This puts it as a more affordable but older option to Lakeville earlier.
It comes in 35% cheaper than Lakeville by sitting at an average of $1,003 psf from 2019 to 2022Q2. It did a total volume of 62 transactions. It grew slightly more in growth with a CAGR of 3.8% and 11.8% in Absolute growth.
The Mayfair sits comfortably as part of the residential cluster north of Chinese Garden MRT. It has some food options in Yuhua Market & 347 Hawker Centre nearby. It is also flanked by private and public housing estates.
The Mayfair will be located close to the Jurong Canal Drive Extension, which focuses on car-lite, bus only lanes with lanes for cyclists and pedestrians. The Mayfair is also marginally closer to the Jurong East Interchange which will be a major hub for the Western region.
Moving on to the MOAT Analysis, The Mayfair has a high score of 72%. Scoring 5 on Rental Demand, Quantum Effect, and Exit Audience. It scores a decent 4 on the Parents’ Attraction Effect. The Mayfair is slightly more well-rounded than Lakeville but with a slightly shorter lease.
Despite a slightly lower lease (around 73 years left), the prices are affordable and the growth prospects are still there due to the strong fundamentals of the area. The lease decay effect on price may not be enough to beat the push factor of inflation and appreciation of properties in the Western region.
Third Place: Caspian
Coming in at third place of the Top 5 Growth Condos in D22 is Caspian. It is around 300m away from Lakeside MRT, which is less than a 5 minute walk. This puts Caspian as an attractive option to homebuyers due to the added accessibility, which homebuyers love.
Caspian is a 99-year leasehold condominium with its lease starting in 2008. It was completed in 2012 with a total of 712 units. This is still a relatively young resale condo with a great location premium. Despite being located away from the city centre, Caspian close distance to Lakeside MRT will put it near the heart of the future CBD of the west (Jurong Lake District & Jurong Innovation District).
Compared to elevated residential prices in Singapore’s real estate market at the moment, Caspian still hovers around a relatively affordable price of $1,228 psf from 2019 to 2022Q2. In this same period, Caspian has a total of 98 transactions. It has a CAGR of 4.5% and Absolute growth of 14.1% in the same period. Importantly, this mid-large sized development would benefit from the high volume of transactions and decent growth moving forward as the Western region continues to develop.
Caspian scores a whopping 82% on the MOAT Analysis. It is a strong, well-rounded performer in the 10 aspects of MOAT. It excels and scores a 5 for Exit Audience, Parents’ Attraction Effect and Rental Demand. It scores a decent 4 for Region and District Disparity, MRT Effect, Quantum Effect, and Bala’s Curve Effect.
The MOAT Analysis signals that Caspian is still a valuable option. It is not common to see a high MRT Effect score along with District and Region Disparity score. Over a long span of time, we expect the disparity gap for highly connected and accessible locations to close up and get more expensive gradually.
Seeing the strong fundamentals of future developments promised by URA, we are optimistic about the performance of stars such as Caspian, which performed exceptionally well in MOAT.
Second Place: Lakeside Towers
Lakeside Towers takes the second place among the Top 5 Growth Condos of District 22. It is a 99-year leasehold condominium with its lease starting from 1975. It was completed in 1981 with a total of 144 units. While there is only a small amount of units in Lakeside Towers, the units available are of very large sizes (1,900-2,000 sqft and 3,875 sqft).
What is even more rare about the large sizes for the condo is the price point of $644 psf on average. Even though there is only approximately 52 years of lease left, the large size and price point make this place valuable. For instance, there was a 3,875 sqft unit which sold for around $2.15M earlier this year. If you are adverse to low lease projects, this might make for an attractive rental option for a large home.
From 2019 to 2022Q2, Lakeside Towers had a total volume of 16 transactions. It sported a CAGR of 4.9% and an Absolute growth of 15.4%. Despite the arguably severe lease decay, we still see that Lakeside Towers have continued to appreciate into the Post-Pandemic era. The power of inflation is frightening for sure.
Its Lakeside orientation is its namesake and one of its selling points. The location is around 1.3km away from Lakeside MRT, which is around a 15 minute walk. This part of Lakeside is home to the older condominiums in the district.
Given the age of the properties in this area, en bloc risk (for new buyers) and en bloc opportunities (for current owners) is a very real prospect. Given that Lakeside Apartments nearby recently sold en bloc for 14% above its reserve price, the valuation for this locale is decent and Lakeside Towers likely stands to gain for a potential en bloc. Future buyers will need to pay attention to the en bloc risk of Seller’s Stamp Duty payments if the en bloc happens in the first three years of purchasing.
The MOAT Score for Lakeside Towers sits comfortably at 72%. Despite a lower score on Bala’s Curve Effect, Volume Effect, MRT Effect, and Parents’ Attraction Effect, it performs very well on Rental Demand, Quantum Effect, Exit Audience and Landsize Density Effect. This tells us that the pillars that support the value of Lakeside Towers.
The price level, unit size and quantum are all positioned to be attractive. While this comes at the expense of the remaining lease, there may be some buyers on the market that find this type of profile attractive.
First Place: Lakeholmz
Finally, the Top Growth Condo of District 22 goes to Lakeholmz. The champion is a condominium located next to Caspian, near Lakeside MRT. Lakeholmz is a 99-year leasehold condo with its lease starting in 2001. It was completed in 2005 with a total of 369 units. While this development is smaller than Caspian and marginally further away from the MRT, Lakeholmz did better on growth.
The average psf from 2019 to 2022Q2 was $1,030 psf for Lakeholmz. Its total volume during this period was 44 transactions. This put Lakeholmz’s growth at around 5.2% CAGR and 16.4% Absolute growth, which is the highest in District 22 in this period.
Its locational advantages mirror Caspian, which came in third in this ranking exercise. Lakeholmz is approximately 150m further away from the MRT than Caspian, and 7 years older. Due to these two primary factors, the average psf sits at 16% lower than Caspian. There might be other factors that contributed to this lower price but we are just stating the more obvious ones.
Prospective buyers may look to Lakeholmz as a more affordable option. Given that it is still a relatively young development, the lease decay effect may not have been strong enough to offset the upward pressure in price. As a result of the price disparity of 16%, the relative growth prospects are marginally better than Caspian.
Like all the other condos in the Top 5 Growth category in District 22, Lakeholmz will benefit from the future developments in the Western Region. It sits near the heart of the action, between Jurong Innovation District and Jurong Lake District.
Although its MOAT score is slightly lower than Caspian, Lakeholmz still has a very high score of 78%. It is relatively well-rounded with its main strengths being the Rental Demand, Quantum Effect, Parents’ Attraction Effect, and Exit Audience.
In the case of Lakeholmz, the benefits from the Quantum price point makes it an affordable option for upgraders looking for life in the west. The strong Rental Demand, Parents’ Attraction Effect, and Exit Audience, shows that Lakeholmz appeals to multiple overlapping demographics. Young families, HDB Upgraders, and Renters are the target audience for this condo.
Closing Thoughts
Lakeside is a high growth area in D22. Looking at the Top 5 Growth Condos in D22 from 2019 to 2022Q2, we see that much of the action is going on around the Lakeside area. Moving forward into the future, there will be many new residential developments north of Lakeside. Tengah estate will also be a primary growth factor for rising residential prices.
The ongoing development of Jurong Lake District and Jurong Innovation District gives the Western region room for future growth. Connectivity is expected to improve by leaps and bounds by the end of the decade as the Jurong Region Line is completed.
So far, the Top 5 Growth Condos in D22 have had high MOAT Scores of 70% and above. While this does not really prove that all condos with High MOAT Scores are bound to appreciate well, it instead indicates a necessary but potentially insufficient condition for high growth.
What is the MOAT score of your current home? If you want to find out if your current or future home has a decent MOAT score, contact us here for more information. It is difficult to find growth in tough economic times. With the recent cooling measures, purchasing power of aspiring homeowners has also declined. If you want to find solutions to your problem, and how to navigate your property journey in these tough times, reach out to us now!
