Home Purchase or Property Investment? Feb 2020 HDB BTO

Canberra Vista 

Toa Payoh Ridge

Kim Keat Ripples

The Housing and Development Board (HDB) announced 3,095 build-to-order flats in Sembawang and Toa Payoh for sale on 11 Feb 2020. The Sembawang project, Canberra Vista consists of 15 blocks of 1,467 flats sprawled beside Canberra MRT. The 1,628 Toa Payoh flats are in a development, Toa Payoh Ridge beside Caldecott MRT and near Braddell MRT and in another Toa Payoh East's Kim Keat Ridges plot. 

As a northlander for close to 3 decades and working in central Singapore for close to 1 decade, I am appealed by both projects when it comes to buying my first home or rather, making my maiden property investment. Both BTO projects, in my opinion, are no-brainer sure wins for staying as well as investment. 

Let me do a quick analysis of the 3 BTO projects on whether they are good home purchase or investment. 

Location
Toa Payoh Ridge is situated centrally at the heart of Singapore. It is beside the Caldecott MRT (both Circle line and future Thomson line) and 600m away from Braddell MRT (North South line). Orchard, Holland Village, Bugis, Marina Bay and Downtown can be reached easily within 20 mins.

Kim Keat Ridges is located more than 1km walk away from Toa Payoh MRT or require a short feeder bus trip to the bus interchange. However it is great for those who drive as the development is just beside the intersection of PIE and CTE. Nonetheless, Toa Payoh East is still Toa Payoh anyway in the central of Singapore.

Canberra Vista is in the former Canberra ghost town between Sembawang and Yishun. Situated beside the newly launched Canberra MRT, this place is no longer ulu anymore. Going to City Hall by North South Line will take around 40 mins, and venturing overseas up north Malaysia's Johor Bahru will take lesser than 40 mins. This development is in fact better positioned that the earlier built executive condominium, Brownstone, the recently launched Parc Canberra and past Canberra BTOs - Eastlink, EastCrown, EastDelta @ Canberra. Though being too close to the MRT tracks means having to endure some rumbling noises of MRT trains. 

Amenities
Toa Payoh Ridge has 2 nearby Hawker centres at Toa Payoh Lor 1 and 4 that will serve plentiful of local delicacies. It is very near to the Raffles family of schools in Bishan, girls schools like Marymount Convent and CHIJ Toa Payoh. It is 1km away from the nearest NTUC fairprice supermarket in HDB Hub. However, a mixed commercial retail complex will be built when other Caldecott BTO plots are also developed. The only downside of living in Toa Payoh is the lack of a cinema and top grade shopping mall.

Artist impression of Caldecott development from Remaking of Heartlands initiative by HDB

Kim Keat Ripples is near to Pei Chun Public School, and other neighbourhood schools such as First Toa Payoh and Beatty Sec School. It is near to my favourite Kim Keat market and Hawker Centre which has a lot of cheap and nice food that beats inflation. It is within close proximity to temples and upcoming church. Toa Payoh SAFRA, Stadium and Sport Hall are the other nearby sports facilities.

Canberra Vista is located within distance to shopping malls such as Canberra Plaza and Sembawang Shopping Centre and neighbourhood schools such as Canberra Pri and Sec Schools, Endeavour Pri School, Sembawang Pri School and Wellington Pri School. No hawker centres, wet markets and much fewer choices of food as it is a new non-mature estate. However, a Bukit Canberra Sports and Community Integrated Hub housing indoor and outdoor sports amenities, hawker centre, community and lifestyle facilities will TOP this year in Sembawang.

Cost
The Toa Payoh BTO is priced at a premium and is quite pricey in my opinion but what you pay is what you get. Ranged from $395k to $666k for a 4 room flat of 93sqm, I suppose the $395k unit is a lv 2 4 room in Kim Keat Ripples while the $666k unit is a 40th storey 4 room flat in Toa Payoh Ridges. $395 psf for a low floor Toa Payoh unit and $665 psf for a top level scenic unit overlooking Macritchie Reservoir waters and greenery. Compared to Toa Payoh Alkaff Oasis BTO in 2016 with 4 room units priced starting from $440k, this Toa Payoh BTO in 2020 does reflect the dip in transacted resale HDB prices.

Canberra Vista seriously offers top value for your bucks in my opinion. Priced between $272k and $320k for a 4 room unit and between $350k and $406k for a 5 room unit of 113 sqm, it only costs at most $334 psf for a 5 room flat that possibly overlook the Sungei Simpang Kiri River.

Return on Investment
To estimate conservatively on the return on investment on a 4 room flat in Toa Payoh, I will overstate the purchase price based on the top tier price of $666k. I did a quick search on the last 5 transacted resale value of a 4 room flat in Toa Payoh Central. The units are aged around 10 years and fetch between $663k to $788k. Hence, we can expect at least a 12% returns based on investing $666k and selling at $750k after 5 years. But we should realistically expect a 5 year Toa Payoh 4 room HDB flat to be worth around $850k and the purchase price for a 20th to 30th storey unit to around $550k to $620k so the ROI would be much higher.

For a Canberra 4 room flat, there is not enough data for past transacted resale prices for close to 5 year old units. However a quick search on Property guru yields results of homeowners listing $410k to $430k selling price for their 4 room Canberra HDB units with 95 years lease left. If we assume the purchase price is $320k, and safely use $400k as the selling price 5 years in, we can expect a 20% returns minimally for the Canberra BTO. Again, realistically we should expect a higher return as the purchase price would be much lower than $320k and selling price for a 5 year Canberra 4 room flat with 95 year lease can possible hit above $450k in 2029 or so. I believe the returns from Canberra BTO in percentage terms will be relatively much higher than that of Toa Payoh BTO as the Canberra BTO is more of a value investment play waiting for more potential to be unlocked while the Toa Payoh BTO is a vintage purchase of a luxury well located HDB flat.

In conclusion, both projects in this Feb 2020 HDB BTO are very attractive and has received overwhelming applications of more than 5x ratio from Singaporeans at the time of writing midway before applications closed. Both locations are well connected to MRT, amenities and ideal for couples, families, elderly and children. Overall the Toa Payoh BTO is a better home for living but from an investment perspective, the Canberra BTO do potentially offer higher ROI. Making an application by paying $10 is aka to buying a token to spin the jackpot for a slim chance to purchase a decent home as well as to generate a 12% to 20% returns on your capital. For homeseekers out there, what are you waiting for? Thanks for reading!

With Love and Peace,
Qiongster