(Photo credit: Wikipedia)
Date of Analysis: 24 February 2020
Period of data: Feb 2017 to Feb 2020
Number of transactions analyzed: 684
(transaction data extracted from URA website)
This is part of an ongoing series "Singapore Private Condominium Guide". Please refer to the link for analysis on the other districts.
District 8 is one of the districts within the RCR (Rest of Central Region) of Singapore. It comprises of few neighbourhoods such as Little India, Farrer Park and Serangoon Road. Some of the private properties in this region are City Square Residences, Sturdee Residences and Citylights etc. There are not many new launches in this district, with the most recent ones being Uptown@Farrer and Forte Suites. It's also interesting to see that the number of transactions in this district is so little. In fact, it has even lesser transactions than the Jurong area (D22). On average, most districts have at least more than 1000 private condominium transactions in the past 3 years.
How do the private properties in D8 generally fare? Using box plots, here are the details for each of the properties in D8.
More box plots of other condominiums in this district (together with all the other districts) could be unlocked when you become a patron (https://www.patreon.com/datascienceinvestor)
To help you better understand the data, I will use Soho 188 as an example here. From the diagram, you can see that
Average price- $1546 psf
Median price- $1575 psf
Price at 25th percentile- $1504 psf
Price at 75th percentile- $1587 psf
Box plot is generally a good way to present the data. In this case, you can easily see the average price, median price, price at 25th percentile and price at 75th percentile from the plots. You could also easily tell at one glance how wide the spread of prices are for any of the condominium projects.
The metric used here is $psf as it is a common indicator to reflect property prices.
The most expensive condominium in D8 is Forte Suites with an average price of $1897 psf while the most affordable condominium in D8 is Wu De Building with an average price of $888 psf. Forte Suites is a freehold property which TOP in 2018. Its location is not too bad, with Farrer Park MRT station being 11 minutes walk away. If you are a fan of Mustafa Shopping Center, you might also be glad to know that it is only 1.5km away from Forte Suites. Time for those late night shopping in Mustafa.
Wu De Building is a freehold property which TOP in 1990 (30 years ago!- Thank God it's a freehold, otherwise the price would have plummeted). Location wise, it's actually pretty good with Farrer Park MRT station being only 6 minutes walk away. If you don't mind the age, this property certainly do have its perks!
Let's take a look at the various scatter plots to have a better insight of how the property prices perform across 684 transactions in the past 3 years.
First, a scatter plot of the $psf against date.
In scatter plot, we could derive r coefficient, which is used to explain the strength of the linear relationship between 2 variables. Since we are using $psf and date as the variables, r coefficient allows us to better understand how the $psf changes with time. To some extent, if the r coefficient is high, we could roughly assume that the $psf increases positively with time.
The r coefficient (or much simply/loosely put, the gradient for the line of best fit) in the scatter plot above is a disappointing 0.06. This means that the $psf in D8 is actually quite stagnant over the past 3 years. I would have expect to see such results for HDB resale flats, but certainly not for private properties.
Based on the graph above, you could also better understand if you are "over-paying" for your property purchase (eg. if you property is above the line of best fit). Taking a quick glance at the scatter plot, your transaction will be on the high side if you are paying anything substantially more than $1400 psf in May 2019. Of course, there could be many factors such as location, tenure etc that could influence your buying price. This is still a general assumption.
So, which projects perform remarkably well comparatively amid the general decline in the district in the past 3 years?
The plot above shows a myriad of lines of best fit from various different projects in D8.
2 of the top performing projects from the graph above are Mera Springs and City Square Residences. Mera Springs is a freehold property which TOP in 2008. It's located 11 minutes away from Novena MRT station and is pretty near to several good primary schools such as Anglo-Chinese Junior School and CHIJ Toa Payoh Primary School minutes drive away.
City Square Residences is a freehold property which TOP in 2009. It has a fantastic location with City Square Mall just besides it and the Farrer Road MRT station just 7 minutes walk away. Rentability in D8 is generally highly sought after, and I would imagine that this project to enjoy high rentability. True enough, it has 30 plus rental transactions just in the month of January this year. Pretty good.
Next, how do freehold perform against leasehold during this 3 years period?
I have only included freehold transactions in this plot and you could see that the r coefficient of 0.04 is of very little difference as compared to the r coefficient of 0.06 for the scatter plot with all transactions. Hence, I will say not much difference in price performance of leasehold and freehold properties in D8 for the past 3 years.
Also, how about apartments of various sizes? How do they perform against each other?
Apartments of sizes below 1000 sqft performs better than apartments of larger sizes. In fact, apartments of sizes above 1500 sqft seems to even see a decline in the $psf over the past 3 years. You might like to take this into account when looking at purchasing a property in D8.
For my regular readers, you will know that this is where I will briefly talk about the various different machine learning models and attempt to apply my machine learning model to determine a fair value for a certain property listing on PropertyGuru. If you have not read about this before, you may just refer to any of the district analysis I have done in my previous articles and you should be able to find it.
For the benefit of the regular readers, I'm going to remove the chunk of text and go straight to the analysis. Like mentioned in the earlier articles, I will talk more about these machine learning models and will probably do so when I have finished analyzing all 28 districts in Singapore.
Running through all 684 transactions through several machine learning models, I eventually achieve a model which provides me with suitable evaluation results (MAE of 72568, RMSE of 109451 and R2 of 0.934).
I then now try to put this machine learning model to practice and use it to determine what should be a reasonable price for the following property.
Project: City Square Residences
Area: 861 sqft
Floor level: High Floor (assume to be 11 to 15)
Running through the machine learning model which I have created, the price I have obtained is $1,339,102 which is less than the asking price of $1,550,000. The asking price of $1,550,000 translates to a $psf of $1800 which is way higher than even the 75th percentile pricing ($1617psf) of City Square Residences based on the transactions in the past 3 years. This might suggest there is some room for negotiation over here. But of course, more investigation will also be needed to look at other factors beyond these parameters.
Now, with these data in mind, go be a data science investor!
Refer here for analysis on the other districts!
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