Is Botanique at Bartley a Steal?

The Bartley area is in the Northeast of Singapore. It is not a residential area for now. In fact, there are plenty of dis-amenities which Singaporeans have complained about in the papers. The Mount Vernon Columbarium is nearby. There is an army camp – Gurkha Cantonment and a boys’ home in the vicinity. The Paya Lebar industrial estate is across the road. Amenities are limited. There will be some retail units in the uncompleted Kensington Square. Unfortunately there is no major shopping mall around. The nearest will be nex, at Serangoon. There are plans to rejuvenate the area with the development of the Bidadari estate next to Woodleigh MRT. The first BTO project in Bidadari will be offered in 2015. There will be an integrated transport hub as well.

Location of Bartley

Source: onemap

Uncompleted Projects in the Area

Bartley Residences launched in 2012 is a 702-unit condominium project. Residents of Bartley Residences can use the side gate to get to the Bartley MRT station which is less than 100 m away. The estimated TOP date is 2017.

The average transacted prices for a low-rise 797 sq ft unit is between $1,273 and $1,312 psf. The project is fully sold.

Transactions in Bartley Residences

	Apr-12	May-12	Jun-12	Jul-12	Aug-12	Sep-12	Oct-12	Nov-12	Dec-12
Average Price	$1,277	$1,298	-	$1,287	$1,292	$1,312	$1,274	$1,273	$1,276
Average Size	797	797	-	797	797	797	797	797	797

* Levels 06 to 10

Source: URA / Real Property Advisory Singapore

Bartley Ridge launched in 2013 is a 868-unit condominium project. It is a short 5 minute walk to the Bartley MRT station. The estimated TOP date is 2018.

The average transacted prices for a low-rise 730 sq ft unit is between $1,253 and $1,310 psf. This is close to 10% higher than Bartley Residences’ average price, considering that the units are smaller. There is a noticeable trend that the average prices have eased from $1,310 psf to $1,253 psf. This could be due to individual units’ attributes. It is 97% sold as of March 2015.

Transactions in Bartley Ridge

	Apr-13	May-13	Jun-13	Jul-13
Average Price	$1,310	$1,302	$1,272	$1,253
Average Size*	730	732	748	732

* Levels 06 to 10

Source: URA / Real Property Advisory Singapore

Botanique at Bartley launched in 2015 is a 797-unit condominium project. Located on the same side of the road as Bartley Residences, it is a short 5 minute walk to Bartley MRT station. The estimated TOP is 2019.

The prices indicated by the developer for a 2-bedder range from $798,000 to $1.05 million. The sizes are between 657 and 958 sq ft. Average price for the development is just below $1,300 psf. More than 150 units are said to be sold since launch.

Is it Worth Buying?

The developer paid around $648 psf ppr for the land in Jan 2014. This is slightly higher than Bartley Residences and significantly higher than Bartley Ridge. Factoring a construction cost of between $450 and $500 psf, the estimated breakeven price for Bartley Residences is between $1,100 and $1,150 psf. With a selling price of just below $1,300 psf, it appears that the developer is pricing Botanique at the same level as Bartley Residences and Bartley Ridge which was launched three and two years ago, respectively.

Prices Paid for Land Plots

	Apr 2011	Jan 2012	Jan 2014
Bartley Residences	$621 psf ppr	-	-
Bartley Ridge	-	$495 psf ppr	-
Botanique at Bartley	-	-	$648 psf ppr

* Note: Bartley Residences and Bartley Ridge are by the same developers

Source: URA / Real Property Advisory Singapore

So it seems like the developer has factored in the market sentiments when pricing the project. But if you probe further, it may not be the case.

Just 300m north of Botanique at Bartley is a freehold development, Kensington Square. Launched in 2013, it commanded a slight premium over the leasehold Bartley Ridge despite located further away from the MRT station. All residential units in the development have been sold. If there are still units available in Kensington Square, this will no doubt affect the launch price of Botanique.

 Transactions in Kensington Square

	Sep-13	Oct-13	Nov-13	Dec-13	Jan-14	Feb-14	Mar-14	Apr-14
Average Price	$1,520	$1,305	$1,537	$1,431	$1,451	$1,317	$1,339	$1,329
Average Size	657	678	673	629	614	642	638	653

Source: URA

In the future, there will be more residential projects in the area as the Government seeks to rejuvenate Bartley. There is another piece of land along Jalan Bunga Rampai in the Reserve List and another parcel of land zoned residential beside Maris Stella High School. The current land where SPCA sits on is zoned residential as well. Once sold and completed, they will compete with the earlier developments for tenants.

Source: onemap / URA / Real Property Advisory Singapore

Botanique at Bartley is priced fairly but it is not a steal. Proximity to a MRT station is always a plus point for investment so that is something for consideration as well.

Do note that the analysis have focused on 2-bedders which may include dual key units. If the development like Botanique at Bartley has studio units, these units will be strong competition against the 2-bedroom dual key units. The 2-bedroom dual key units owners should and must expect to achieve a lower rental than a studio unit if they do manage to find a tenant who do not mind a renting 200+ sq ft unit.

Pros and Cons of Botanique at Bartley

Pros	Cons
Near to Bartley MRT	No major shopping mall
Future integrated transport hub at Woodleigh	Near to but not beside a columbarium
Future amenities at Bidadari	Noise from two major roads – Bartley Road and Upper Paya Lebar Road
Expressways – KPE, CTE	Industrial estate nearby
Maris Stella High School	Competition for tenants from Bartley Residences, Bartley Ridge and itself

* The list of pros and cons are not exhaustive

Source: Real Property Advisory Singapore

How Much Will That Hike In Mortgage Interest Rate Cost You?

Since the start of 2015, the Singapore Interbank Offer Rate (SIBOR) has been going up, exceeding 1% as of end March. Together with the spread, the interest rate is around 2% now. Just how much will the housing loan cost you now with a higher SIBOR?

	1.5% Interest Rate	2% Interest Rate	2.5% Interest Rate	3% Interest Rate	3.5% Interest Rate
Purchase Price	$800,000	$800,000	$800,000	$800,000	$800,000
Loan Quantum	$640,000	$640,000	$640,000	$640,000	$640,000
Loan Tenure	25 years	25 years	25 years	25 years	25 years
Installment per month	$2,560	$2,713	$2,871	$3,035	$3,204
Usage of CPF Funds	$2,100	$2,100	$2,100	$2,100	$2,100
Cash Top Up	$460	$613	$771	$935	$1,104

* assuming a 2-bedder condominium unit in the suburbs, a couple contributing a maximum of $2,100 per month to their CPF ordinary account.

We can see from the table that the installment per month will increase by $153 if interest rate goes up from 1.5% to 2%. Not a lot. On average, every 0.1% increase in interest rate will see a borrower paying $31 more every month.

Can borrowers cope with the increase in installment? It depends on the borrowers' profile and spike in interest rate. In the worst case (3.5%), the cash top up is $1,104 per month.

If the borrower manages to find a tenant, he would not have to top up with cash. But in this current market, it will be tough.

Why HDB Income Ceiling Should Not Be Revised Again

Just recently someone made a comment and asked for the HDB income ceiling to be revised again.

There may be merits to the case but I feel that the HDB income ceiling should not be revised for the following reasons:

• Developers of Executive Condominiums (ECs) benefit

By increasing the income ceiling, developers benefit as the pool of prospective buyers is enlarged. Prices in the property market now are constrained by many factors notably the Mortgage Service Ratio (MSR) and Total Debt Servicing Ratio (TDSR). Even with the MSR, prices of ECs can theoretically be priced at $1,000 psf if there are buyers (see my earlier post in October 2014 - How High can EC Prices Go?). If the income ceiling is raised, it means that more of the household income can go towards housing and gives the developers more room to raise EC prices when the market is buoyant. For the buyers, it is back to square one again as they will be squeezed by the higher housing loan.

• Housing is a personal lifestyle choice

Let's face it. Housing is a personal lifestyle choice. Similarly for cars. There are many people who aspire to own a private condominium or EC. I have seen many people with a household income of $6,000 to $8,000/month applying for an EC. And they apply for the largest or best (ie. top level or best view) unit they like. These units cost between $1 and $1.3 million. Some of these people own a car and maybe have a domestic helper to help. This group of people are likely to stretch their spending to the max and complain that the cost of living is very high. I shudder at the thought of what will happen to their family when there is a loss of income.

• The beneficiaries are a small pool of people

By raising the income ceiling, you are benefiting a small group of people. Worse still, you allow the higher income people to compete for public housing. The increased demand for public housing will put a strain on public resources which can be better channelled towards social spending.

• Contrary to some Government policies

The Government is encouraging people to get married earlier and has been controlling the housing prices to lower the stress on families. Couples who apply for a HDB flat before age 30 need only put a downpayment of 5% for their flat. By increasing the income ceiling, couples may put off their wedding to a later date since there is more room for their income to rise. Getting married later will affect the chances of conceiving although having a baby or babies are personal choices. So it is not in line with other Government policies.

• Repercussions on Government subsidies

Many if not most of Government subsidies are based on income for example housing grant, childcare etc. With the revision in income ceiling, should all the income ranges for these subsidies be revised as well? If yes, where will the money for these expenditures come from? More taxes - direct and indirect?

• Upsetting the balance in the property market

While the group of beneficiaries from a revised income ceiling is small, it can upset the balance in the property market. More people will try to apply for a BTO flat instead of buying from the HDB resale market, EC or private market. Some sellers of HDB resale flats might have to reduce their asking prices to sell. If HDB resale prices weaken further, existing owners will not be happy and this affects their ability to upgrade. The other spectrum of the property market like EC or private property gets affected as well. It will further affect the weak property market.


The revision in income ceiling can be a vicious circle. It may increase property prices, put a strain on public resources and possibly upset the balance in the property market. It should not be done and I hope the Minister for National Development does not consider it.