tengah (2017-2020) how much it cost vs how much you pay for

disclaimer: ​​
1. Readers are advised to use information available here as study guide only and use it at your own risk. 
2. Please note that changes/ update based on updated information will be made from time to time, readers are advised to check on this page regularly.
3. Analysis was done based on available data at the time of this review being published. ​

Spanning across 700ha of land, Tengah is the latest test-bed for new township design evolution in Singapore. This new town was announced back in September 2016. It will have the first car-free town centre in Singapore and utilizing various smart technologies to create a sustainable and community-centric town. It will also house up to 42,000 new housing units, of which 30,000 public housing and 12,000 private housing (https://www.hdb.gov.sg/cs/infoweb/press-releases/corporate-pr-unveiling-the-masterplan-for-tengah-08092016). To date, a total of 7,260 public housing units has been launched over 6 developments. By the end of the year 2020, additional 2,610 public housing units will be added to the existing stocks and this will form close to 1/3 of the planned public housing units.

Time and again, we have been reminded that public housing in Singapore is heavily subsidised. One of the largest price components in a property development is the land cost and sales of land accounted for up to 11.6% of government revenue in the year 2019. (https://www.singaporebudget.gov.sg/budget_2020/revenue-expenditure). The closest reference which we managed to obtain publicly is a mixed-use land at Bukit Batok West Avenue 6 which is 500m away from the edge of the phase 1 developments. The land was sold to the highest bidder back in Mar 2016 at S$634.56 psf of allowable GFA (gross floor area) and it worked out to be around S$645.69 psf which includes tax and bonus GFA (price adjusted upward due to efficiency and the use of unit GFA as comparison instead of GFA which includes circulation area). Note that currently land cost has not been factored into the selling price of public housing to maintain it's affordability. 

Of all the 6 developments launched to date, none has unit psf (per square foot) price exceeding the land cost itself (based on neighbouring market rate back in 2016 as currently there’s no government land sales from Tengah township yet). The highest building cost between the 6 is not even close to half of the land cost (indicated in light blue). To be fair, there are other cost like consultant’s fees for building work (i.e. architecture, civil, quantity surveyor, mechanical and electrical, project management) and accreditation work (accredit checker for building and special trades) which should be included as part of the total construction cost.

The consultant’s fees component (indicate in tangerine) has not shown much impact on the total cost as it only took up not more than 3.5% of the final construction cost of the building work. Since the large chunk of land cost has not been factored into the selling price, it’s only fair if the external infrastructure work (I.e. earthwork, road and drainage, sewer, etc.) included into the cost. These external infrastructures (road, drain, sewer, etc.) will be shared among immediate neighbouring developments. Thus, we have split the cost (indicate in dark grey) equally among the 4 developments within Plantation District. (note that no detail of the exact work area is made available in the public domain, thus we assume tender for phase 1 will be for this vicinity)

Note that this study is based on average psf price, therefore there’s a need for us to explain why it doesn’t apply to all unit types. If you take a closer look at the unit type being launched in 2 developments here, you will see most of the units are of the 4-room type, followed by 5-room. On average, a household in Singapore consist of 3.2 people, therefore a 4-room (3 physical room) type is the most common unit type. Since the majority of housing type is those of 4-room, this explains the close similarity between average psf price of the development vs the 4-room psf price. 

Note for non-industry readers:
 
1. Price psf (per square foot) indicates how much someone need to pay for a square foot of an area. (1 square meter = 10.764 square feet) I.e. a 4-room unit has an area of 92 square meters (92 x 10.764 = 990.288 square feet). If psf price is at S$300, then S$300 x 990.288 = S$297,086.40.

2. Why the industry still using imperial system when metric system is the current standard? Reason being most of the top down decision makers are from the imperial system era and this will change someday.
​
3. When property price being quoted in imperial system, it seems less expensive! Imagine you need to multiply by 10.764 when you quoted in metric system! S$300psf vs S$3,229.2psm (per square meter). 

Please 'like' and 'share' this article if it helps you to better understand the public housing in Singapore. Next, we will analyse Bidadari (touted as the next gold mine), Tampines North (public housing within mature region) as well as Punggol NorthShore (sea front public housing). 

At www.hausanalyst.com, we strive to help future homeowners choose a better housing unit through scientific analysis with cutting edge 3D modelling and analysis to minimise future discomfort and downside risk which comes with lesser attributes. Sun exposure, wind exposure, distance, view angle and the sound disturbance will be our main focus as well as industry specific issues which homeowners won't know about. With millions of data points collected from our inch accurate models and pricing data, we are also a database outfit which strives to use data to better craft future housing base on Singapore housing experience. We welcome investors or partners who wish to work with us to chart new frontiers.

Copyright © 2020 chua.soon.ching@hausanalyst.com