An introduction to the Master Plan
Why is it important?
It is important to study the URA Master Plan during our research before we commit to any purchase. Location is an important criteria which we all know, though we believe this is not the most important factor.
Follow us closely as we will be sharing our top 5 criteria in choosing your right property.
Master plan as quoted from URA website is the statutory land use plan which guides our country’s development in the medium term over the next 10 to 15 years. A new master plan is issued every 5 years. Used correctly, this could very well be your treasure map.
If you are unaware, URA used to release a longer term plan call Concept Plan. If my memory serves me right, they actually released.
We break down into the top 6 items to look out for when studying the master plan. This should apply for all property purchase from BTO to landed. However, for landed properties, there are other valuable information that can be found in the master plan that you should take note of.
We will be doing a guide on landed purchase very soon! Stay tune!
Nearby residential plots and their plot ratio. Will my view be blocked in the future?
These are the colours that you should be looking out for. I usually like to compare the master plan with street directory map to have a better idea as the master plan does not differentiate current and future developments and even the types of houses are labelled the same colour. If all are residential plots, they will all look the same. Few things you should be taking note of are who are you surrounded by?
Are there big HDB cluster and how old are they? HDB clusters are generally good due to numerous reasons.
Firstly, HDB did an awesome planning in every estate where almost all will be within walking distance to a hawker centre or at least a food court. In recent launches like Punggol and Sengkang estate, we no longer see mini marts but full size supermarkets like Sheng Siong and Giant in almost every corner. For very practical reason, buying a property near to these estate gives you the ease of daily amenities.
Secondly, if we are buying a private property, the HDB upgraders will be your potential future buyers. A term call HDB support that you may have heard before. These families have been staying in the estate for the last 5 years at least, they are familiar with the area and very often their young children are studying nearby. Asking them to upgrade and move far away from the children’s school is a potential obstacle. Very often, we have seen upgraders looking a new place in the same area.
If you are thinking of buying a unit that has unblocked view, you should have a look at what are the potential developments that are coming up. Will there be a new project that will be coming up between you and your sea view which you might be
paying a premium price for at this moment? Will it make sense to buy high floor now because it is unblocked view but could potentially be blocked in the near future? Although we might not get a solid answer just by looking at the master plan, it is the best we can do for now and you might be a bit more conservative in your offer price before your emotions got the better of you after seeing the view.
We will like to see residential plots that is currently empty. These plots of lands will be sold in the future Government Land Sales and we all know that in a land scarce city, land prices can only become more and more expensive. Add on the rising labour and material cost, you know that your future neighbour will be paying a higher price. This helps to push your prices up further for a better exit.
An example will be High Park Residences, when Parc Botannia was launched in late 2017 at a price significantly higher than High Park Residences, you can see that High Park Residences prices increased to close the gap.
We can also have a rough gauge on the supply of houses in that area. The lesser supply brings about lesser competition and according to the law of demand and supply, this should mean a good thing for your resale prices.
Left: Normanton Park nested in an area dominated by commercial land (dark blue)
Right: The Florence Residences and Riverfront Residences being in close proximity to each other, along with other upcoming residential land (light blue)
2. Transport facilities - MRT/ Interchange?
I guess we all can agree that living within walking distance to MRT station is great. Projects as such will not come cheap and are usually priced in. Using the master plan, we can sometimes find projects with potential for future growth.
An example will be Florence Residences mark with the star. One might think it is a far walk from Florence to either Kovan MRT and Hougang MRT. However, a study into the Master Plan will show you where the future Hougang MRT cross island line entrance will be. This significantly reduces the distance from Florence Residences to Hougang MRT.
3. Schools. Affect your choice of bedrooms for investment units. Too near will there be traffic jam?
Next on the list is one of the top reason why people are moving houses. The phrase “Every school, a good school” made famous by our then education minister. In September 2021, Ministry of Education (MOE) announced that it will increase Primary 1 places reserved for Phase 2C. Phase 2C, which is for children who have no ties to a school, is usually the most competitive phase. Priority is based on distance, with places given first to Singaporeans living within 1km to the school. In the same news release, MOE also changed the way they calculate the distance. Distance will be calculated from a point on the boundary around the school instead of from a single reference point. This is actually a good news to some home owners who
used to just missed out on the 1km to certain schools. While URA master plan can show you the schools in the vicinity, we recommend OneMap which shows you accurately whether your house is within 1km to the school or vice versa. A point people tend to forget is the choice of bedroom when buying a project for investment with a good school within 1km. It does not make sense to be investing into a 1 bedroom type in such area especially if the school is the key factor why you are drawn towards this project. Similarly, a 4 or 5 bedroom type might be an overkill. Your future potential buyer who are looking at buying into this area to get their kid into this school most likely is not a big family. Why? Because they only need to get their first born in and the siblings can go in via an early phase. Which means that these group of buyers most likely can accept a smaller unit. Of course with budget everyone will like to buy a bigger home, but as investors, we want our exit plan to be as safe as possible and cast the widest possible net to the biggest group of buyers.
Another point being too close to school will be the traffic flow during peak hours. This works just like many buyers who wants to stay near MRT but don’t want it to be so close till they can hear it. Traffic jams caused by parents dropping and picking their kids up is no joke especially when the road is not wide enough.
4. Blue and white zones nearby? What industries are they in? Potential buyers and tenant pool? Or even integrated or mixed developments
The 2 colours that i am most interested in are blue and white zones. Dark blue which is mainly for commercial developments such as offices, banks, convention centre, entertainment etc. Light blue are marked as Commercial and Residential where the
development has both such as the Canninghill Pier.
What we should note here is light blue is very different from pink which is Residential with commercial at 1st story. Both being termed as mixed development by most agents but they are like Mercedes vs Prius. Both are great car, just for the record.
White sites which are commonly termed the most expensive plot because
almost anything can be developed there. Residential, hotel, offices, shops or mixed of them.
Investing into a project near these sites have great support of good tenant profile to rent your place and a sound prerequisite for exit plan. These tenants could turn future buyers and even investors looking into owning a property near these attributes.
These areas most likely are part of government’s plan with major transformation or are already part of a business district.
5. Near to industry zones? - preferably further away
Next we want to find out if there are any industry zones nearby. What kind of industries are they in and will there be many heavy vehicles passing by the road. Will there be any noise pollution and will there be traffic jams during the peak hour. Such
as Eunos Link and Paya Lebar Road which is painful to travel on during peak area.
Your potential buyers might be limited too as some prefers to stay away from these areas due to personal preference. General advise will be to study deeper into what industries are they and if they hire more locals or foreigners. Will they be your potential tenant or future buyers? Are they high paying jobs, is that an industry that the government is putting in more effort and funding or is it already a sunset industry. Will they be able to afford your rent? These are the questions that you can ask yourself before buying into a project that is near to an industry zone.
6. Places of worship. Can I see them? Noisy? Traffic congestion
Spotting them on the map will give you a good indication but nothing beats walking the ground for this. Can you see the place of worship from your unit? What kind of sound will I be expecting to hear? Will there be traffic jams during their time of worship and if yes how bad and where will be affected.
Remove yourself as the buyer and imagine your future buyer. Sometimes we are clouded by the judgement that it is a religion that you are familiar with and are ok with it. But will your future buyer be? Will you be limiting the number of buyers next time when you are selling?