New lease on life

Geylang’s gentrification could potentially lift property prices in the area

 FRANCIS KAN

CHANGE is coming to Geylang, Singapore’s most famous red-light district.

The brothels that line the area’s alleys — along with the raft of unlicensed activities that take place there — have kept its property prices low, despite it being a 10-minute drive from the Central Business District (CBD).

But the area may undergo gentrification, which could boost home prices there, just as it did in previously unloved neighbourhoods such as Bugis and Joo Chiat.

Geylang already offers a number of attractions for prospective homeowners, such as its central location and vibrantfood scene, famous for well-known dishes such as frog porridge and beef noodles in Lorong 9, and the crab bee hoon at Sin Huat Eating House in Lorong 35.

The district is also well served by a number of MRT stations. Aljunied and Paya Lebar on the East West Line connect residents to the CBD, while Geylang Bahru, Mattar and Ubi stations on the recently opened Downtown Line 3 connect Geylang directly to the north-west.

NEW ZONING LAWS

A proposal by the Urban Redevelopment Authority (URA) to re-zone parts of Geylang from residential to commercial could put a limit on new residential developments.

This is expected to reduce the area’s available housing options and raise property values of existing developments.

Home prices look likely to rise as neighbouring Paya Lebar turns into a commercial hub outside the CBD — part of the URA’s plan to provide alternatives to businesses and jobs that are closer to homes.

Mr Darius Cheng, founder of property portal 99.co, says: “Ignore its red-light  district and Geylang has all the key qualities of a prime location.

“While it is not family-friendly, it is ideal for singles or foreigners who view accessibility to their workplaces as a priority. Recent re-zoning laws mean Geylang could become a goldmine, even as a family home.”

In the longer term, the relocation of Paya Lebar Air Base in 2030 could be another plus for Geylang. With the airbase gone, building height restrictions in the surrounding areas, which could include Geylang, will be  lifted. This is likely to attract developers looking for en-bloc deals that will allow them to build more units on a plot of land.

POTENTIAL FOR RENTALS

For those looking to invest in a property for rental income, Geylang may not seemto be an obvious choice because of its relatively low rental rates compared to homes in other areas in the central part of Singapore.

But the lower property prices in Geylang mean landlords are likely to get a decent rental yield or decent return on the property investment (or one’s annual rental income as a percentage of the total cost of the property).

Once housing units become scarcer after the URA’s re-zoning takes place, rental rates are likely to rise.

Then again, Geylang has never had a problem with vacant rental units. According to research from 99.co, the district has enjoyed rental occupancy of 100 per cent for more than a decade.

Another plus: As Geylang and the areas around it become more developed, the seedier aspects of the neighbourhood are likely to take a back seat to more wholesome attractions. A new demographic of residents could be introduced, speeding up the area’s gentrification.

With Geylang’s property prices still low, experts believe that those who buy now could reap the benefits if its transformation takes place.