From Balestier to Tiong Bahru, our nation-Sunday1From Balestier to Tiong Bahru, our nation-state is continuously flourishing with the signs of gentrified landmarks: the handmade craft stores, the brunch cafes, and the artisanal coffee places. The gentrification has lead to the increase in property price.

Some people may complain about gentrification, however, we must be aware that the changing of the neighborhood due to gentrification is providing profitable business opportunity for many people.

If you are buying a home in the gentrified neighbourhood, it is an investment. If you invested on the property early on, you will receive great returns because soon property prices will soar. But the main question is how could the everyday investor make profits from such an insignificant thing?

How to identify gentrification in Singapore

A simplistic way to find investment opportunities in gentrification is by analyzing the the neighbourhoods that are in the proximity of gentrified areas.

Take an example of the Kallang/Whampoa area. This area is next to Jalan Besar which has been already gentrified. In the Kallang/Whampoa area signs of gentrification are increasing in the recent times. It started with the people wishing to be in the proximity of Jalan Besar and wanting to exterience the vibrancy of gentrified area. Interestingly, this prompted the gentrification of the Kallang/Whampoa itself.

In fact gentrification works in this manner. When a new clientele moves and settles in a certain area, people doing business in the area (shop owners, restaurant owners etc.) try to attract the new customer by increasing their business activities.

Currently, Kallang/Whampoa tops the list of five performing estates with median prices for four-room resale flats. Here is a list of resale price of HDB flats in the Kallang/Whampoa area in the fourth quarter from 2011 to  2016.

 

3-Room

4-Room

5-Room

Q4 2011 

$345,000

$515,500

$639,000

Q4 2012

$369,500

$561,500

$676,500

Q4 2013

$359,500

$565,000

–

Q4 2014

$333,800

$515,000

–

Q4 2015

$328,000

$546,000

$666,000

Q4 2016

$329,000

$581,500

$785,000

 

Source:HDB

The price increase can be credited to the effects created after gentrification of Jalan Besar, which started in 2014. The demand of Jalan Besar gentrification was from younger, affluent couples interested in living in the proximity of Jalan Besar.  This was in fact a feat in the current market, which is a hard nut to crack.

Before you invest in properties in any location, you should consider number of factors, for example access to the public transport, shopping malls, marketplace, schools etc. You should also take a note of any further developments in the area, for example whether there are any projects such as public parks, MRT stations etc. Another awesome place to invest and live is the Kandis Residence and Jazz Residences.

URA’s master plan proposes development plans of Singapore over the period of 10-15 years .URA’s master plan can give you an idea on any government-planned constructions.

If there are various amenities around, your investment will have more value. Existing amenities or proposed amenities after the gentrification, attract the buyers as well as renters.

You can hear about locations that are being gentrified in the restaurants, public parks, etc. You can also use social media to know about the gentrified areas or the areas that are being gentrified. Try to be as much active as you can on Facebook, Snapchat and Instagram. If you notice a new eatery in a new location, it may be a sign of gentrification. Thus it is a wise step to invest in that location before the price begins to rock.

 

Change is not happening overnight

At the end of the day, investing in the areas that is under gentrification may be like a game of roulette, where you make a guess and wait for your guess to be true or false.  As you wait, you need to be prepared. While choosing a place that is under gentrification, you must be patient and cross your fingers while the market takes its own turn. You may get the desired results just in few years, or have to wait for many years. In the mean time all you can do is nurture high hopes.