Earlier this month, a three-room flat at 41 Sims Drive was sold for $368,000 ($518 psf). The 710-sq ft flat is located in the HDB town of Geylang which is within District 14.

We used our analytics tool, Is it a Good Deal?, to assess the transaction and determine whether the buyer of this HDB flat, located on the fourth to sixth storey, secured a bargain.

Near a wet market and two expressways

The three-room flat at 41 Sims Drive is within walking distance of Sims Vista Market and Food Centre. Schools within a 1km radius include Geylang Methodist School (Primary and Secondary) and James Cook University Singapore (see Map 1). Other primary schools located within a 2km radius include Bendemeer Primary School, Canossa Catholic Primary School, Kong Hwa School, and St. Andrew’s Junior School.

Read also: Is it a Good Deal?: $750,000 for a three-room flat along Commonwealth Drive

A drawback of the flat is the lack of MRT stations within walking distance. The nearest station is Geylang Bahru MRT Station on the Downtown Line  but it is located approximately 650m away (see Screenshot 1). However, this is mitigated by Sims Place Bus Terminal, which is within a 500m radius of the flat. Additionally, the flat is a short drive from the Kallang–Paya Lebar Expressway and the Pan-Island Expressway.

Our tool noted that the transacted price of $368,000 for the subject flat is lower than the average prices of similar flats in several nearby projects, as well as the overall average for District 14 (see Screenshot 2).

The tool also highlighted that the subject flat has a remaining lease of approximately 55 years, as its lease commenced in 1981. The shorter remaining lease could have contributed to the lower transacted price.

Three three-room flats along Sims Drive sold this year

At the time of writing, 178 three-room flats in Geylang have been sold at prices ranging from $285,000 to $811,000. Hence, the transacted price for the subject flat is at the lower end of this year’s price spectrum for three-room flats in Geylang.

Of these 178 transactions, three were for flats along Sims Drive, which fetched between $368,000 and $393,000. The subject flat is one of the three transacted flats along Sims Drive. The other two three-room flats are located at 45 Sims Drive, a short walk from the subject flat (see Map 2).

Both flats at 45 Sims Drive measure 700 sq ft and have leases that commenced in 1977, leaving each with approximately 51 years of remaining lease. The flat on the fourth to sixth storey was sold in April for $388,000 ($554 psf), while the flat on the 10th to 12th storey was sold in February for $393,000 ($561 psf).

Read also: Is it a Good Deal?: Last month, a unit from a freehold boutique condo in District 10 yielded a profit of $3.66 million

Interestingly, both flats at 45 Sims Drive fetched higher prices than the subject flat despite having shorter remaining leases. This could be because both flats are arguably in a more convenient location, as 45 Sims Drive is adjacent to Sims Vista Market and Food Centre and nearer to Aljunied MRT Station.

Only one three-room flat in Geylang sold for more than $800,000

So far this year, only one three-room flat in Geylang has crossed the $800,000 threshold. A 732-sq ft flat at 82A Circuit Road was sold for $811,000 ($1,108 psf) in April. Reasons for its high price include its long remaining lease of approximately 94 years and its close proximity to the dual-line MacPherson MRT Station as well as the Pan-Island Expressway (see Map 3).

Thus far this year, flats along Circuit Road have topped the price chart for three-room flats in Geylang, with seven such flats fetching at least $760,000 (see Table 1). Notably, the transacted prices for all seven flats have crossed the $1,000 psf threshold.

All seven flats are part of MacPherson Spring, which was launched for application during the Build-To-Order (BTO) exercise in February 2015. The HDB project comprises 750 flats featuring a mix of studio apartments as well as three-room and four-room flats. During the BTO exercise, the three-room flats at MacPherson Spring were sold for prices ranging from $275,000 to $324,000.

Assuming the seller paid $324,000 for their three-room flat at 82A Circuit Road and sold it for $811,000, they would have pocketed an estimated profit of $487,000.

In contrast, a three-room flat at 21 Balam Road fetched $285,000 ($439 psf) when it was sold in May. The 649-sq ft flat is located on the first to third storey and has a remaining lease of approximately 41 years. The flat is also within walking distance of Tai Seng MRT Station and Circuit Road Market and Food Centre (see Map 4). However, Canossa Catholic Primary School is the only school within a 1km radius.

Read also: A three-room flat was just sold for $888,000, setting a record-high for such flats in Queenstown

Another three-room flat at 21 Balam Road was sold for $290,000 ($447 psf) in January (see Table 2). These two flats along Balam Road have fetched the lowest prices for three-room flats in Geylang thus far this year.

Recent uptick in prices for three-room flats in Geylang

From 2015 to last year, the average resale price for three-room flats in Geylang trended below that of their four-room and five-room counterparts (see Chart 1). However, this year, the average price for three-room flats ($642 psf) surpassed that for five-room flats ($634 psf), while the average price for four-room flats ($769 psf) continues to trend above both.

This could be because the average resale price for five-room flats fell by 3.9% y-o-y since last year. In contrast, the average resale prices for three-room and four-room flats rose by 3.2% y-o-y and 2.1% y-o-y, respectively.

Furthermore, three-room flats (60.1%) in Geylang have shown the strongest price growth since 2020 compared to their four-room (47%) and five-room (26.8%) counterparts.

The average resale price for three-room flats in Geylang ($641 psf) that are 41 to 50 years old trends below that of flats in the Central Region ($648 psf) of a similar age, but above that of such flats islandwide ($592 psf) (see Chart 2).

Notably, the transacted price of $518 psf for the subject flat is significantly below the average resale price of three-room flats of a similar age in Geylang ($641 psf).

The average resale prices for three-room flats in all three locations dipped in 2020 but have since recovered. Flats in Geylang recorded the strongest growth of 54.1% since 2020, followed by those across the island (46.2%) and the Central Region (37%).

Only freehold condos within walking distance

There are only four condos within walking distance of 41 Sims Drive, namely Canne Lodge, Centra Residence, Gems Ville and The Diamond. However, all four are freehold developments and have fewer than 100 units each.

If the distance is expanded to 1 km, there are five 99-year leasehold condos, namely Avant Residences, Central Grove, The Alcove, Sims Urban Oasis and Penrose (see Map 5).

Among the five leasehold condos, Sims Urban Oasis is the largest development with 1,024 units, followed by Penrose with 566 units and Central Grove with 262 units (see Map 4). The Alcove and Avant Residences feature 102 units and 50 units, respectively.

The two largest condos—Sims Urban Oasis and Penrose—are located adjacent to each other. They are also within walking distance of Aljunied MRT Station, Geylang Methodist School (Primary and Secondary), as well as Sims Vista Market and Food Centre.

Despite their close proximity, the average price for Penrose ($2,133 psf) has consistently trended above that for Sims Urban Oasis ($1,902 psf) (see Chart 3). This could be because Sims Urban Oasis obtained its temporary occupation permit (TOP) in 2017, making it seven years older than Penrose, which obtained its TOP last year.

Conclusion

The transacted price of $368,000 for the three-room flat at 41 Sims Drive is on the lower end of the price spectrum for similar flats in Geylang. A flat along Circuit Road fetched the top price of $811,000 while a flat at Balam Road fetched a record-low price of $285,000. A key factor behind the price difference is the length of the flats’ remaining leases. The flat at Circuit Road has a remaining lease of 94 years, while the flat along Balam Road has only 41 years left. Meanwhile, the subject flat has a remaining lease of 55 years.

Another contributing factor to the lower price for the subject flat at 41 Sims Drive could be the lack of a nearby MRT station. Two other flats along Sims Drive sold for higher prices despite having shorter remaining leases. The flats’ close proximity to Aljunied MRT Station could have given a boost to their transacted prices.

While it is possible to purchase a three-room flat in the Central Region for under $400,000, homebuyers must be prepared to compromise on remaining lease and proximity to amenities such as MRT stations.

To learn more about this transaction, and whether it is a good deal, click here.

Check out the latest listings for Sims Urban Oasis, Penrose, Geylang properties