The best is yet to be for Tengah property prices, say DBS analysts

Property developers such as GuocoLand could benefit from a potential rise in home prices near popular primary schools, particularly in emerging areas like Tengah New Town.

Still, DBS Group Research cautioned in a report, titled “Primary school premium: Fact or Fiction?”, that price appreciation also depends on factors such as transport access, tenure, and project attributes.

DBS analysts Tabitha Foo and Derek Tan said in the report, published on Thursday (May 22), that some primary schools are more popular than others because of historical ties valued by parents who are alumni, or their specialised programmes, the school culture, or proximity to home.

Under Singapore’s school balloting system, children living nearer oversubscribed schools are given higher priority for admission, which has prompted some parents to buy homes nearby to boost their child’s chances of a place, they added.

“This ‘proximity advantage’ could make nearby properties more attractive to parents seeking to maximise their admission priority,” they said.

However, while properties within 1 or 2 km of such schools generally appreciate more in price than their district averages, the trend is not consistent across all locations, the analysts noted.

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For instance, the analysts said that a study of a sample of popular schools found that homes near Catholic High School and CHIJ St Nicholas Girls’ School registered compound annual growth rates that were generally over 5 per cent – higher than their respective district averages.

In contrast, properties near Singapore Chinese Girls’ School and Rosyth School recorded more mixed results; some projects near these schools underperformed their surrounding districts.

The analysts said that while moving closer to a popular school is “one of the key factors driving potential price appreciation”, it is also important to consider other factors. These include entry timing and price, proximity to MRT stations, lease tenure, the age of the project, the availability of multiple primary schools, and other development attributes.

These considerations, they noted, may explain the variation in price trends across different school zones, despite similar proximity advantages.

Looking ahead, the analysts said the upcoming Tengah New Town could be a development to watch, particularly with Anglo-Chinese School (Primary) School planning to relocate there by 2030.

While the analysts said it is still early to quantify the impact the school’s relocation will have on property prices in Tengah, they observed that the town is rapidly developing with numerous Build-To-Order launches, as well as the award of multiple Executive Condominium sites.

DBS’ report cited the awarding of a recent private condominium land parcel in Tengah to GuocoLand, Hong Leong Holdings and CSC Land Group in January under the Government Land Sales programme.

The 25,458.4-square-metre site on Tengah Garden Avenue is zoned “Residential with Commercial at 1st storey”, and can potentially yield about 860 residential units.

GuocoLand, which announced its results in February for its first half-year ended Dec 31, 2024, noted steady demand for its residential developments in Singapore.

The property developer reported a net profit of S$74.6 million for H1, up 13 per cent from S$66.2 million in the year-ago period.

The group attributed the improved performance to its main business engines: property investment and property development.