Geylang property is hot in more ways than sex

Geylang produces conflicting reactions in Singaporeans. On the one hand, it’s a den of vice: a haven for gambling, sex-for-sale, and people with budget tattoos who spend every weekend failing to get into Attica. On the other, it’s a food paradise and a splash of local colour. Let’s face it, the rest of the country looks as sterile as a clinic compared to Geylang. But did you know Geylang has become a property hot spot of late?

A quick rundown of Geylang

Some Singaporeans will tell you a quick rundown is what Geylang needs. As in, with a car. From the 1980s right up till the present, Geylang has been the centre of Singapore’s legalised prostitution scene.

But while the brothels are licensed, Geylang is home to many activities that are not. Unlicensed cigarettes, gambling, illegal streetwalkers and sex pills, Geylang has it all.

Nonetheless, Geylang is a vibrant, colourful district. It’s one of the few places where old school, first and second generation hawkers ply their trade. It’s where Singlish and dialects blend into a constant hum, and clan associations practice traditional wu shu and lion dances.

The property scene in parts of Geylang has a questionable reputation

Let’s start with the fact that few people want to be recognised as a Geylang landlord – practically every interview request I made had been turned down. Most of them, you see, have a reputation for being slum lords.

As recently as April 2015, two foreign workers were killed, and three injured, in an overcrowded Geylang unit. Previously in December 2014, a shophouse fire had killed tenants. You get the point: many Singaporeans equate Geylang landlords with something that makes them want to take a bath.

In addition, it is a rare bank willing to grant a loan for Geylang properties. If they foreclose, they may not find eager buyers. When you live across the street from an illegal cigarette peddler, and there are enough prostitutes next door to form their own football team, you know you made a bad choice of family home.

Sounds terrible right?

Until you consider that…

• Geylang has a prime location and is super accessible
• Recent re-zoning laws mean Geylang could become a gold mine
• Geylang has seen property value spikes in recent years
• Geylang remains a prime location for rental income

1. Geylang has a prime location and is super accessible

By car, Geylang is little over 10 minutes from the CBD and Marina Bay. By train, both Aljunied and Kallang MRT stations service the area. So while Geylang is not family friendly, it’s ideal for singles or foreigners who like getting to work on time (the weirdos.)

Geylang is also smack in the middle of some of Singapore’s best eateries, has a reputation for cheap electronics, and has its own sports and recreation centre. Ignore the “red light district” part, and you have all the key qualities of a prime location.

2. Recent re-zoning laws mean Geylang could become a gold mine

The Urban Redevelopment Authority (URA) is barring further residential development between Lorong 22 and Lorong 4 in Geylang. The land space will be used for commercial development.

This means we’ll see offices for small businesses, and a lot of synergy with the tenants given most are in Singapore to work. The various entertainment outlets that spring up will keep things interesting for existing residents, and create more draw to the area.

On top of that, the now limited supply of residential options in Geylang means existing freehold properties there have the potential to appreciate further.

3. Geylang has seen property value spikes in recent years

I spoke to a property agent in a Geylang showroom and two investors in the area, but sadly they refused to be named. They did highlight that from 2012 to the present, property values have increased significantly, from around $1,100 psf to around $1,400 psf.

The shared sentiment is that the red-light element can be ignored. Geylang has never been an area that attracts families, but demand from single and foreign tenants has been stable since the late 1990s.

One of the investors pointed out that, of all the properties he has owned, a unit in Geylang is the only one that has never seen a vacancy in over 15 years.

I also raised the issue of the relocation of Paya Lebar airbase – word in the property market is that the shifting of this air field would lift height restrictions in Geylang, and buildings can be taller. This could raise land values in the area.

But the people I spoke to were dismissive of this. The property agent mentioned that:

“So far none of the buyers I’ve met have brought it up. The main considerations are that Geylang property is easy to rent out, it is a very convenient location, and it is affordable compared to equally well located properties. I believe capital appreciation is due to rising recognition of these factors, not the relocation (of the airbase.)”

The latest check on 99.co shows average overall prices of about $830,000 for Geylang property. That’s admittedly cheap for a unit within 10 minutes drive of the CBD.

4. Geylang remains a prime location for rentals

Both investors I spoke to claimed to see rental returns of around six per cent. One of these units was a shoebox apartment at Prime Residence, 41 Lorong 22. The apartment size is around 400 square feet, and the landlord mentioned rental income of about S$3,200 per month.

That’s high though; I checked 99.co’s listings, which reflect rental prices ranging between S$2,500 to S$3,000 in the area. (See? Always check 99.co to compare nearby properties first. It’s free.)

With new restrictions on residential properties (see point 2), landlords in the area are also free from competition in the coming years.

Overall, Geylang surprises by being a potentially good buy for the open minded.

If you are in a situation to look past the red-light issue, Geylang has many of the traits of an ideal property investment. It is affordable freehold property, has a steady stream of tenants, and there are few factors that would get prices there to slide.

Just don’t expect people to think “prestige” the first time you mention your house is in Geylang.