Biggest Misconception - The Real Deal: Why Properties Near MRT Stations May Not Always Appreciate

When it comes to property investment, one common belief is that buying a home near the MRT station is a surefire way to enjoy long-term appreciation. The convenience, accessibility, and potential for increased demand seem like solid reasons to invest.

However, it's important to take a closer look and understand that properties near MRT stations may not always appreciate as expected.

Saturation and Supply: One significant factor that can impact property appreciation near MRT stations is the saturation of supply. As more and more developments spring up around these transport hubs, the supply of available properties increases. This heightened competition can lead to a potential oversupply situation, diluting the appreciation potential for individual properties. Buyers have more choices, and the market may not be able to sustain price growth at the expected rate.

One of the more congested area in Singapore is in Tanah Merah. Surrounding the Tanah Merah MRT, we have an over supply of private developments in the area.

Let's look at Urban Vista and The Glades which is just a stone's throw away from Tanah Merah MRT, within walking distance. I'll choose these two condominiums as they both TOP quite recently in the same year of 2016.

Let's take a look and see how they developed since then.

Blue line: The Glades

Green line: Urban Vista

In a span of 10 years, the properties hardly appreciated in their value. Not only that, Urban Vista even had a negative -0.89% dip since 2013. Even with the 2020 Covid-19 push factor, the value of the properties remained stagnant.

Limited Scope for Development: In some cases, the land surrounding established MRT stations may have limited scope for further development. This can hinder opportunities for future growth and expansion of amenities, resulting in a stagnant property market. Without significant new developments or improvements in the vicinity, property appreciation may plateau over time.

Market Fluctuations: Property appreciation is influenced by various market factors, including economic conditions, government policies, and overall market sentiment. While an MRT station may contribute positively to property value during favorable market conditions, it does not shield the property from market downturns or unfavorable economic circumstances. Property values near MRT stations can be susceptible to market fluctuations, just like any other area.

Overemphasis on Location: While location is undeniably important in real estate, overemphasizing the proximity to an MRT station may overshadow other crucial aspects that contribute to long-term appreciation. Factors such as the quality of the property, its unique features, nearby amenities, and future development plans should also be taken into consideration. A well-maintained property with desirable attributes in an up-and-coming neighborhood may offer better prospects for appreciation than solely relying on MRT proximity.

To conclude, while the allure of living near an MRT station is understandable, it's crucial to approach property investment with a well-rounded perspective. While properties near MRT stations may experience appreciation, it's essential to acknowledge the potential challenges and limitations that can impact their long-term growth. Considering a broader range of factors, such as supply and demand dynamics, market fluctuations, and overall development potential, will help investors make informed decisions. Remember, there's more to property appreciation than just the proximity to an MRT station!

Always do your analysis before jumping into a big ticket item. Feel free to reach out if you need any help!