How the new MRT Thomson-East Coast Line moved property prices and rents
A PropertyGuru case study shows an advantage to getting in early, but broader trends may lessen the network effect over time
THE expansion of the Thomson-East Coast Line (TEL) has reshaped the property landscape in Singapore’s East Coast. With seven new stations – Tanjong Rhu, Katong Park, Tanjong Katong, Marine Parade, Marine Terrace, Siglap, and Bayshore – residents gain greater connectivity and convenience.
Now, approximately 235,000 households are within a 10-minute walk to a station, with travel times between Marine Parade and Shenton Way reduced from 40 to 20 minutes. These enhancements raise the question: How has the expansion affected the property and rental markets in the area?
Immediate impact: Boosted convenience and market activity
The TEL expansion immediately boosted market activity near the new stations. Data for the third quarter of 2024 shows a surge in non-landed private residential listings within 0.8 km of the new TEL stations, reaching about 2,619, compared to a 2023 quarterly average of just about 410.
This spike in listings represents a 4.8 times increase year-on-year, likely spurred by owners looking to capitalise on rising prices. Views of these listings nearly doubled in Q3 2024, illustrating heightened interest triggered by the TEL’s arrival.
Rental activity reflects a similar trend. Near Tanjong Katong station, rental listings jumped to 1,844 in Q3 2024, from just 301 a year prior. Listing views also increased, climbing close to 90 per cent.
The buzz around the TEL’s latest stage has translated directly into market dynamics, indicating that the draw of enhanced connectivity is powerful enough to shift both buying and renting trends.
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The proximity premium: Do higher prices follow?
Living near an MRT station has always come with a price premium, and the TEL expansion exemplifies this trend. For condominiums within 0.8 km of the new stations, the median asking price per square foot (psf) hit S$2,068 in Q3 2024, up from S$1,978 in Q1 – a 6.8 per cent increase compared to a year ago.
However, this growth hasn’t been uniform across property types. Landed homes in the same radius saw median prices (on a psf basis) increase by just 1.6 per cent.
There is a clear advantage to getting in early when an MRT line opens. Property asking prices near the TEL stations rose about 6.8 per cent from the start of 2024 to Q3.
However, early buyers must endure construction-related issues like noise and traffic congestion.
The higher asking prices reflect the ease that prospective buyers can enjoy immediately. Although buyers now face higher prices, there is significant future upside. Enhanced accessibility brings proximity to upcoming developments like Changi Airport’s Terminal 5 and the Greater Southern Waterfront.
Spillover effects on other locations
While the expansion of the Thomson-East Coast Line (TEL) has clearly boosted property values around its stations, the impact of the new TEL stations near existing MRT stations is mixed.
Sellers and landlords near these established stations now face stiffer competition from properties located closer to the new TEL stations. Residents near existing MRT stations may still benefit from network effects, as they can now travel to more areas and have additional transit options in case of breakdowns.
However, in the rental market, substitution effects seem to outweigh network effects.
Nationally, the rental market softened, with median asking rents near MRT stations dropping 15.7 per cent year on year.
Yet, properties near TEL stations have shown resilience. In Tanjong Katong, average condo rents per square foot declined by less than one per cent year on year in Q3.
Similarly, the prices of non-landed properties near existing MRT stations dropped in Q3, further indicating substitution effects post-TEL opening. Asking prices near Paya Lebar fell 4.6 per cent, with property views at Tanjong Katong more than double year on year, while Paya Lebar saw a 1.88 times increase.
Broader trends may influence future dynamics
The TEL’s Stage 4 opening has enhanced commuting and reshaped the East Coast’s property market dynamics. Properties near the new stations have seen substantial price and rental hikes, and early investors enjoyed significant capital appreciation, albeit with a period of inconvenience due to construction.
As seen from this case study, MRT connectivity remains a cornerstone of property value in Singapore.
However, this impact may lessen over time due to substitution effects as more lines open. With the future Cross Island Line, MRT premium significance might change. Broader trends, such as remote work and CBD decentralisation, may also influence future dynamics.
MRT connectivity is, after all, only one of many factors that impact prices and demand. Buyers need to consider their unique needs and investment timeline, conducting due diligence to account for hidden costs.
The writer is head of Real Estate Intelligence at PropertyGuru
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