The Outside of Central Region (OCR), or the fringe, is where many new property investors get their start. It’s also a favourite among local home owners – you may have heard, for example, that “east-enders” will never move from the east. Properties in these areas tend to be more affordable (although there are luxury properties in the OCR too); and thanks to Singapore’s ongoing decentralisation, they can be just as convenient as prime region properties. Here’s what you can expect to pay today:
Defining the OCR
The OCR consists of the following districts:
The OCR is sometimes referred to as the “fringe districts”. This should not be confused with the city fringe (which is composed of the Rest of Central Region, or RCR).
District 16 (Bedok)
Average prices in D16 average $1,531 psf, with a recent pick-up due to the completion of Grandeur Park Residences in 2020. Some people have pointed out that transaction volumes always seem to be good in D16 no matter what (e.g. 640 transactions, even during the Circuit Breaker). There’s no secret behind it, just that it’s a very large and mature district, with a lot of resale options all year round.
Rental rates have been picking up in D16, and currently stand at $2.66 psf. It has more or less recovered from the Circuit Breaker, although it’s still lower than the peak in 2019.
Prices in D17 average $1,107 psf. This district is home to Parc Komo, one of the cheapest freehold, mixed-used properties in Singapore to date.
Average rental rates in D17 are down to about $2.11 psf. Due to the presence of Changi Airport, a fair number of tenants here are in the aviation industry; this is one of the worst hit industries by Covid-19. Under normal circumstances however, rentability in this district is high.
District 18 (Tampines)
Prices are currently around $1,108 psf. D18 has been a hot spot, thanks to Treasure At Tampines. This is currently the largest condo development in Singapore, with over 2,200 units. It’s also one of the most affordably priced developments in Tampines, which is the regional hub for Singapore’s east end.
Prices average $1,108 psf, largely on the strength of the aforementioned launch.
Rental rates in D18 have been resilient throughout Covid-19, probably because it’s the regional hub with plenty of malls and Grade A office space. Prices are around $2.62 psf.
District 19 (Punggol, Sengkang)
Prices in D19 average $1,242 psf. Further upward momentum stems from two new launches, The Ola (an Executive Condominium), and Sengkang Grand Residences (an integrated development joined to Buangkok MRT Station).
Rental rates average $2.94 psf, though still far from previous levels in early 2020.
District 21 (Clementi, some parts of Upper Bukit Timah)
The days of Clementi being a sleepy, “cheap” place to stay are long over, with prices averaging $1,568 psf. Clementi is much desired today, thanks to its proximity to both One-North and Holland Village. Expect prices to keep climbing.
Average rental rates are at $2.50 psf. But with the new Normanton Park coming up, tenants who work at One-North may see it as an alternative to Clementi condos, so that may impact rental rates in the near term.
District 22 (Jurong)
There hasn’t been any new launch in D22 over the past year. Prices are around $1,116 psf, having recovered to pre Circuit Breaker norms.
Most tenants based in the west will prefer D22, particularly the retail heavy area of Jurong East. Rental rates average at $2.76 psf, already close to pre-Covid 19 levels.
District 23 (Choa Chu Kang, Bukit Batok, some parts of Upper Bukit Timah)
It’s been a while since we’ve seen a pick-up in D23 prices; but this has happened recently with the launch of Midwood and upcoming Phoenix Residences. At present, prices are around $1,225 psf, but I would expect it to trend upward for the year, on the back of the new projects.
Average rental rates in D23 are around $2.58 psf. Popularity is growing around the Hillview area; while locals may see it as remote, some tenants unused to Singapore’s urban density find it a welcome relief.
District 24 (Tengah)
There is no data available here as Tengah is new, and one of the least developed areas in Singapore at the moment. However, Mount Botanik will be available in 2022. In addition, Tengah Garden Walk will be the first EC in this area; the land sale only just took place in 2020.
I will keep you updated as the situation unfolds, so do follow me on Facebook.
District 25 (Woodlands)
D25 is still one of the most affordable places to own a private home, at an average of $790 psf. However, I don’t think this will remain the case over the coming decade – Woodlands is being transformed into the regional centre for the north, so there is real potential for D25 to be an upcoming property hot spot.
Rental rates in D25 are at $2.65 psf, and this remains a popular rental spot for tenants who want access to the causeway.
District 26 (Yio Chu Kang)
Prices in D26 average $1,162 psf. The uptick is from the launch of The Essence. Although this is a very small development with just 80+ units, it’s the first new launch we’ve seen in D26 for quite a number of years.
Rental rates in D26 average $1.92 psf, but I should point out that rentability and demand are significantly higher in areas near Upper Thomson. In these areas, the rental rates can reach around $2.60 psf.
District 27 (Sembawang, Yishun)
Prices in D27 average $1,018 psf, with a recent pick-up on the back of Parc Canberra. Parc Canberra is connected to the Canberra MRT Station; as it’s rare to have an EC so close to the train station, high demand was more or less a given.
While this is an underdeveloped area, I do think it’s on the verge of a significant transformation. This began with the arrival of the new community and sports hub of Bukit Canberra, which resolves the limited retail/lifestyle options that has long plagued the area.
As I was saying, the addition of amenities in the area, such as Bukit Canberra, are raising the desirability of D23. Rental rates average around $2.25 psf, and show signs of increasing.
District 28 (Seletar, some parts of Yio Chu Kang)
Prices in D28 average $1,116 psf. However, a main highlight will be the upcoming launch of Parc Greenwich (not yet reflected in the graph). This will be the newest EC offering in the north-east, and one of only two confirmed EC launches so far in 2021.
Ps. The new sales and subsales that you see at the start of 2020 came mainly from Parc Botannia – but this condo was almost sold out by that time.
Rental rates in D28 are at around $2.89 psf, but the average is likely to be pulled up once units at Parc Botannia enter the rental market.
New launches in the OCR for 2021:
Notable trends in the OCR:
1. Steady rental market compared to other regions
Compared to the other two regions I’ve covered, you’ll notice OCR prices haven’t moved much despite Covid-19. This is because economic downturns tend to affect prime region properties first – as companies slash budgets and housing allowances, tenants tend to downgrade or find cheaper options.
While the RCR is still the first alternative, there’s an increasing number of tenants who will consider the OCR instead. For instance, expatriate enclaves such as Katong combine a beach-area lifestyle, along with lower rental rates that Districts 9 and 10 simply can’t compete with (and some tenants don’t want to live in a glass-and-concrete city centre).
During an economic boom, OCR condos don’t see as big a rise in rental income or yields; but many OCR condos can retain tenants and existing rental rates even in downturns. In fact, OCR landlords may even poach tenants from more prime areas, while the downturn is ongoing.
2. Affordable pricing increases attractiveness in the downturn
The OCR continues to have the most affordable properties, and you can find sizeable three-bedder units at under $1.4 million. If you’re willing to go for older resale condos like Optima @ Tanah Merah, there are even 700 sq. ft. units for under $1 million (and this is within walking distance of the MRT).
New investors, who don’t want to commit to huge loans during this uncertain time, might do well to start in the OCR; you can upgrade and move into prime region properties later.
3. Will benefit from continued decentralisation in the long term
As we’ve seen in Jurong East, the Singapore government aims to decentralise – this means having separate hubs, such as regional centres like Woodlands North or Tampines, with office spaces and retail. Think of them as “mini-CBDs” scattered across the island.
Over time, the notion of being close to the central CBD is being eroded. We’ve already seen places like One-North and Paya Lebar draw away office demand from traditional centres like Raffles Place – and this increasing decentralisation poses only upside potential for fringe region condos.
As such, property investors with an eye on long term gains should be willing to consider the OCR as well, and not just conventional “golden postcodes” in Singapore.
I will make a further examination into picking out the right properties in non-central regions, in my upcoming article. Be sure to follow me on RonChongProperty.sg, as I cover how to pick out the hidden gems.