Chart of the day: Discover the central suburb where rental prices are amazingly low

It’s almost as cheap as condos in the OCR.

A quiet estate near the city is going against Singapore’s disappointing property market. Hougang, a mature estate in District 19, has a price range that is very close to condominiums Outside the Central Region despite the fact that it is close to the city.

According to PropertyGuru’s Property Outlook for 2H14, the demand for rental homes in Hougang has been steady for the past few quarters, even as the rental volume island wide has seen a decrease.

With average rentals of $3.21 psf, its price range is closer to condominiums at the OCR, which makes it more budget friendly for expatriates who are looking to stay near their work place.

“The abundance of public housing board flats in Hougang – over 48 ,000 in total – means there is a ready pool of buyers who may be looking to upgrade to a higher standard of living, and this will continue to provide support for long term price growth in the estate,” noted the report.

Here’s more from PropertyGuru:

Hougang in District 19 is a mature estate that offers a good mix of public and private housing types to cater to a range of needs and preferences. It is predominantly a public housing estate but will be undergoing a major transformation following the release of URA’s Draft Master Plan for land use in 2013.

Several new private residential projects that are already under construction such as Boathouse Residences, Terrasse, Riversails, Midtown Residences and Heron Bay EC, along with new freehold properties like The Tembusu and Trilive, will add more buzz to the estate.

This has widened the choice for potential buyers and upgraders interested in Hougang. After the implementation of the Total Debt Servicing Ratio (TDSR) framework in June 2013, average prices of both new and resale condominiums remained steady at around $1,028 and $1,040 psf — which is a manageable entry-level pricing for upgraders and first-time buyers.

Stricter immigration rules and higher costs have shrunk the pool of foreign workers here in Singapore, and that also invariably meant a lower demand for home rentals.

Tenants seemed to favour the city fringe areas, as rental budgets have been largely reduced, and price-conscious expatriates are now more stringent with their spending.

But based on PropNex data, Hougang is benefitting from its location near the city as the demand for rental homes in Hougang has been steady for the past few quarters, even as the rental volume island wide has seen a decrease.