Updated: Nov 5, 2022
There are a number of condos sprouting up in the Tanah Merah vicinity of District 16. With so many options for buyers looking to invest in a unit there, how do you select the ones that give you the best investment potential?
In this article, we will dive deep into this area and discuss the following:
District 16 includes Bedok, Upper East Coast, Tanah Merah and Bayshore areas. A large proportion of these areas are zoned residential, with Upper East Coast, Tanah Merah and Bayshore areas primarily consists of private properties.
The above map shows the Tanah Merah vicinity. Over the past decade, it has developed into a residential precinct with many condominiums launched in the area. There are 9 condos which are within close proximity to the Tanah Merah MRT station.
Apart from condos, there are also a good number of landed properties. These can be found slightly further away from the MRT station. Moving north from the station, we can find landed properties at Tanah Merah Kechil Avenue and Simpang Bedok. Moving south from the station, landed properties can be found at Lucky Hills, Bedok Ria and Kew Avenue.
Read more about investing in landed properties in our article - Buy Landed Property: Invest in the Blue Chips of Singapore Real Estate.
We will focus on the condos in Tanah Merah area in our discussion today.
Performance of condos in District 16 vs other districts
Performance of condos in District 16 vs District 15 and 18.
District 15 and 16 are popular with property owners and investors. For this discussion, we compare D16 to D15, as well as D18 which is the Tampines/Pasir Ris area.
From the chart above, we can see that prices for D16 peaked in 2013 and reached the lowest in 2019. It picked up and the average transacted price at slightly above $1,200psf now.
The price gap between D15 and D16 has become wider over the years. Buyers who are initially looking at D15 might want to explore properties in D16 for better investment potential.
It is interesting to note that prices in D18 was higher than D16 from 2018 to 2021. It is only recently that prices for D16 climb higher than D18, and the difference is not big.
For buyers looking at properties in D18, they can also consider D16 as properties here seems undervalue comparatively.
Performance Of Condos In Tanah Merah
There are a total of 9 condos within the Tanah Merah MRT vicinity, namely:
The Tanamerah (TOP 1994, total units 288)
Stratford Court (TOP 1998, total units 268)
East Meadow (TOP 2002, total units 482)
Casa Merah (TOP 2009, total units 556)
Optima @ Tanah Merah (TOP 2012, total units 297)
Urban Vista (TOP 2016, total units 582)
The Glades (TOP 2016, total units 726)
eCo (TOP 2017, total units 748)
Grandeur Park Residences (TOP 2021, total units 720)
Average transacted price for the past 12 months
Average transacted price for condos in Tanah Merah over the past 12 months.
From the chart above, it is interesting to note that the average transacted price for The Tanamera is higher at $942psf as compared to Stratford Court at $847psf though it is comparatively a newer development.
Also, average transacted price for The Glades is higher at $1,460psf as compared to other condos like Optima, eCo and Urban Vista which are newer. It trailed Grandeur Park Residences, which is the newest condo in this area with TOP received only in 2021.
Average transacted price for The Glades is higher than other nearby condos which are newer.
Historical price trend for the past 10 years
Next, let's look at historical price trend for the past 10 years.
For this discussion, I have split the 9 condos into 2 charts. The first chart shows condos that TOP before 2010, and the second shows condos that are relatively newer, ie. TOP after 2010.
Historical price trend for the 'older' condos in Tanah Merah.
The above chart shows price trend for the condos TOP before 2010, namely The Tanamera, Stratford Court, East Meadow and Casa Merah.
From the chart, we can see prices of these condos all appreciate over the past 10 years. Stratford Court has the highest appreciation at 9.7%, and East Meadow has the lowest at 4.48%.
Historical price trend for the newer condos in Tanah Merah (ie. TOP after 2010).
The chart above shows condos that are relatively newer - those that were TOP after 2010. They are Optima @ Tanah Merah, Urban Vista, The Glades, eCo and Grandeur Park Residences.
It is interesting to note that out of these 5 condos, 3 of them depreciate in prices over the past 10 years. Urban Vista has the highest depreciation at 9.55%, followed by The Glades at 7.93%. Ouch!
I went on to check the number of profitable vs unprofitable transactions in the resale market for the above 3 condos.
Urban Vista recorded 61 unprofitable sales and 19 profitable sales. Out of the unprofitable sales, the highest annualised loss was 4%. For the 19 profitable sales, the highest annualised gain was 2.3%
The Glades recorded 30 unprofitable sales and 58 profitable sales. The highest annualised loss was 3%, whereas the highest annualised gain was 6%.
Optima @ Tanah Merah recorded 14 unprofitable sales and 166 profitable sales. The highest annualised loss was 3%, and the highest annualised gain was 1906%! But this was only a one-off deal which happened in 2009 where the owner sold the unit in 13 days and made a profit of $83,100! This took place before the Seller's Stamp Duty (SSD) were implemented and sub-sale were very common then.
💡 Seller's Stamp Duty (SSD) is a tax that a property seller who owns a residential property needs to pay if he/she sold the property within 3 years of owning it. SSD is applicable to sellers who bought their residential property on or after 20 February 2010.
What is the reason for Urban Vista, The Glades, and Optima @Tanah Merah to depreciate in price over the past 10 years?
Also while eCo did not suffer a price depreciation, the increase in price is only a mere 1.06%.
Should property investors stay away from them? I will do a separate analysis to dissect these few condos.
On the other hand, Grandeur Park Residences which is the newest kid on the block, enjoyed a price appreciation of 20.59% over the past 5 years since it was first launched in 2017!
A check on Edgeprop shows that all 55 transactions that were sold in the resale market are profitable, with the highest annualise gain at 7.9%!
Grandeur Park Residences enjoyed a price appreciation of 20.59% over the past 5 years since it was launched!
Should I Invest In A Property In Tanah Merah?
District 16 has always been a popular area for both local and foreign investors. The condos in Tanah Merah are mainly purchased by Singaporeans for own stay or rented out.
So if you are looking to invest in a property, should you look at condos in Tanah Merah?
Here's our thoughts.
(1) Good rental yield
Condos in Tanah Merah has great rental yield. A check on Edgeprop shows that the average rental yield is between 3% to 3.5%.
In fact, I have just helped one of my clients renew her tenancy for a 1 bedroom unit in The Glades for $2,350. The market price for this unit is around $700,00. This makes the rental yield for the unit at a good 4%!
Condos in Tanah Merah attracts tenants who work in Changi Airport and Changi Business Park. It is in URA's plan to create more jobs in the semi-conductor and aviation-related industry clusters at Tampines North, Pasir Ris and Changi. This will great increase the tenant's pool for this area.
Tenants who currently work in Paya Lebar and CBD areas are also attracted to the condos here as they are easily accessible by the MRT.
There are 9 condos which are in close proximity to the MRT station. This provides plenty of options for investors looking for a unit in the resale market.
Condos in Tanah Merah attract tenants as it is in close proximity to the MRT.
(2) Future residential sites to be released
URA Masterplan provides a good insights to the future development to the area.
A check on the latest URA masterplan shows that there are 2 sites in Tanah Merah which is zoned residential and has yet to be developed.
The first plot of land is located right opposite Tanah Merah MRT station. It is zoned residential with commercial on the 1st storey.
This plot of land has been sold to MCC Land in 2020. It will be launched as Sceneca Square/Sceneca Residences this year and the estimated TOP is 2026. Please refer to more information here.
The second plot of land is also located opposite the MRT station. It is currently a forested area and not on the list of Government Land Sales (GLS) yet.
So how does GLS work and what does it mean for existing and future owners?
URA announces a list of land for sale every 6 months. Developers who wish to acquire the land will then put in their bid through open tender. The land will normally be awarded to the bidder who place the highest offer.
The list of developers who have bid for the Tanah Merah site. The site is awarded to MCC Land.
To know which are the confirmed and reserved sites for 2022, please refer here.
For existing owners and those looking to invest in a property in Tanah Merah, it makes sense to know the future developments here.
For buyers looking to invest in a property in Tanah Merah, knowing that there will be launches in the near future give you an option to decide if you want to wait. Some buyers prefer to commit to a unit in the existing launch as an upcoming new launch might affect the prices of existing units.
For owners here, will future launches bring up or push down the prices of your properties? You can get a clue by looking at the bids by developers and their breakeven price. If you would like to understand more on how new launches affect price of your property, feel free to make a zoom appointment with us at the end of this article.
There are 2 sites in Tanah Merah yet to be launched.
(3) Upcoming URA Growth Hotspot @ Bayshore
Located next to the East Coast Park and the sea, a new lifestyle waterfront housing estate is being planned. This 60-hectare Bayshore housing precinct can house around 12,500 families - a mix of 6,000 public and 6,500 private housing.
In our signature Property Wealth Planning 7-steps framework for choosing an investment property, one of the most important factors we look at is whether the property is near to URA Growth Hotspot.
Tanah Merah is situated near to this new Bayshore housing precinct, the upcoming URA Growth Hotspot. In the near future when this area is developed, it will definitely bring up the prices of nearby properties.
URA's proposed Bayshore plan to turn this area into a lifestyle waterfront housing precinct.
Property Investment Opportunities In Tanah Merah
If you are looking to invest in a property in Tanah Merah, what are the opportunities available?
(1) Units in the resale market
There are ample choices if you are looking for a resale unit for own stay or investment.
Most of the developments offer 1 to 5-bedroom units. If you are looking for own stay and prefer something newer, Grandeur Park Residences is a good choice. It has six 14/15 storey blocks with 720 units and two commercial shops and 1 childcare center.
Personally I like The Glades. This is a 9-block development with 726 units ranging from 1 to 4 bedrooms. As the shape of this site is wide and spacious, it allows the units and facilities to be spread across comfortably. All units are North-South facing with the south facing units looking towards the landed properties and offer a panoramic unblocked view.
If you are looking for units to be rented out, rental yield is an important factor to consider, A check on Edgeprop shows that Grandeur Park Residences, Stratford Court and The Glades give a rental yield of 3.5% over the past 12 months! Check out the chart below on the average rental price and transaction volume for the condos there!
Grandeur Park Residences, Stratford Court and The Glades are the top 3 condos in Tanah Merah for rental yield.
(2) Enbloc potential
(i) The Tanamera
The Tanamera is TOP in 1994. This is a 99-year leasehold site and the lease starts from 1 June 1990. The balance lease is around 66 years now.
The site is around 237,607sqf, with 288 units on it. Plot ratio is 2.1.
It is interesting to note that just diagonally across The Tanamera, we have Grandeur Park Residences sitting on a land size of 263,754sqf at plot ratio 2.1. There is a total number of 720 units.
Do we see a potential enbloc for The Tanamera? Especially when there is only 1 plot of GLS land left in Tanah Merah to be sold to developers?
Do we see a potential enbloc for The Tanamera?
(ii) Bedok Court
Just slightly further away from the Tanah Merah MRT station situated behind eCo condo, there is an older development, Bedok Court.
Bedok Court is TOP in 1985. It is a 99-year leasehold site, with the lease starting on 10 April 1982. The balance lease is around 61 years now.
This site has a land size of around 370,233sqf, with only 280 units on it. The plot ratio is 2.1.
As a comparison, eCo has a land size of around 309,703sqf, with 748 units on it. The plot ratio is similar to Bedok Court at 2.1.
Does this make Bedok Court a potential site for enbloc?
Bedok Court has a balance lease of around 61 years and has huge potential for enbloc.
(3) Upcoming mixed-development : Sceneca Square & Sceneca Residence
MCC Land won the bid for this Tanah Merah site, beating 14 other developers who have also submitted their bids for the site.
This site has been named Sceneca Square for the commercial portion, and Sceneca Residence for the residential portion.
The total development has a maximum permissible gross floor area (GFA) of about 267,644sqf, with the commercial portion taking up around 21,528sqf on the ground floor, and the rest go to around 254 residential units on the higher floors.
MCC Land's bid price of $248.99m translates to $930.34psf per plot ratio (ppr) for this 95,587sqf, 99-year leasehold site. According to Nicholas Mak, head of research & consultancy at ERA Realty, the estimated breakeven cost for Sceneca Square/ Sceneca Residence work out to be in the $1,480 to $1,540psf range.
Estimated launch price for this project is $1,900psf to $2,000psf.
If you would like the brochure and floorplans for Sceneca Square / Sceneca Residence, pls click below.
Sceneca Residence is a mixed-development with both commercial and residential units.
There are many options available if you are looking for a unit in Tanah Merah in District 16.
Whether you are looking for own stay or investment, new launch or a resale unit, there are many factors to consider.
I hope this article gives you a better insights on how the condos in Tanah Merah area fared.
If you would like to have a non-obligated discussion on property matters, please make an appointment with me.
See you soon!
About The Author
Vivian joined the real estate industry in 2002.
Over the past 2 decades, she has worked with many clients on their real estate journey. She is well-versed in both HDB and private properties, as well as property investment solutions like part-purchase (decoupling), buying under trust and the different types of mortgage strategies.
Vivian is active in District 15 and 16, and it is easy to find her in the East Coast area stretching from Tanjong Rhu to Bayshore.
Read more about her: www.vivianchong.sg