Appeal of Redhill area lies in its location: Consultants

Consultants cite proximity to CBD and Buona Vista science parks

Home prices in the area around Alexandra Road, north of the Redhill MRT station, may fall in the short term but the medium-term outlook is positive.

Consultants say the appeal of the Redhill area lies in its location - close to both the Central Business District and the science parks in the Buona Vista area.

Another draw is that the area is more affordable than the neighbouring Tiong Bahru and Jervois districts, partly because projects in Redhill tend to be on 99-year leaseholds, rather than freehold.

The most recent Redhill launch is the 429-unit Alex Residences in Alexandra View by SingLand. The project's price was an average $1,650 per sq ft (psf) when its preview sales began this week.

That average price is cheaper than that of its next-door neighbour, Echelon, launched last December by City Developments and now fully sold.

The 508 units at Echelon were sold at an average $1,795 psf, according to Urban Redevelopment Authority (URA) data.

Both Alex Residences and Echelon are on 99-year leaseholds.

The recent price cut for new homes means that the short-term outlook for Redhill, which is in District 3, could be "cautious", said R'ST Research director Ong Kah Seng.

This is because owners who want to sell their homes on the resale market "may have to peg prices at attractive levels" to compete with new launch prices, he said.

However, if investors can hold on for about seven years at least, the outlook is "fairly positive, underpinned by its central location and moderate new supply".

Tenants in the Redhill area tend to be junior- to average-level expatriates with limited housing allowances, and foreign professionals working in the science and business parks around Buona Vista and one-north.

Knight Frank research head Alice Tan said private housing on the city fringe is seen as better value for money as suburban property prices continue to rise and city centre prices remain out of reach for many investors.

Recently completed projects include the 373-unit Ascentia Sky, which is sited on Echelon's west side. The Wing Tai project is on a 99-year leasehold.

The median resale price at Ascentia Sky was $1,709 psf in the third quarter, URA figures show.

Leasing demand at the project has remained decent, with 74 leases signed in July through September at a median rent of $4.74 psf per month.

However, rents in Redhill have been fairly stagnant over the past 12 months, consultants say.

For instance, median rents at The Metropolitan Condominium in Alexandra View, west of Ascentia Sky, have been between $4.19 psf and $4.22 psf per month, starting from the third quarter last year, with the exception of a spike to $4.54 psf per month in April through June this year. Its median rent was $4.22 psf per month across 34 leasing contracts signed in the third quarter.

Mr Ong said rents are likely to remain stable but, on the bright side, "buying a resale property here at lower prices means that initial rents need not be too high in order to yield desired returns".

melissat@sph.com.sg