How will the Upcoming SG-JB RTS impact Residential Property Prices in SG?

This article will explain how the upcoming SG-JB RTS will impact residential property prices in SG, by breaking down the different buyer & renter profiles - Singaporeans & Non-Singaporeans.

The SG-JB Rapid Transit System (RTS) Link stretches 4km (6 mins ride) and connects Singapore's Woodlands North Station to Johor's Bukit Chagar Station.

It is expected to commence service by Q1 2027, and eases traffic load on the causeway by ferrying up to 10,000 passengers an hour per direction.

When the Bukit Chagar station is completed, passengers can expect to purchase the RTS Link tickets on the 1st level, and head to the 2nd level to clear immigration on Malaysia side and pass security checks. Thereafter, they will clear immigration on the Singapore side on the 3rd level and head onwards to the departure train platform on the same level.

For ease of travel, passengers will clear immigration for both countries at their point of departure - otherwise known as the single point immigration clearance system.

Potential Impacts on Residential Property Prices in SG

It is reasonable to suggest SG residential properties closer to the Woodlands North RTS Station would feel the bulk of the impact, and there are potential positive and negative impacts.

Housing Demand by Malaysians and Non-Malaysians in Northern Regions of Singapore

It is highly probable that Malaysians will be less incentivised to commit to a property purchase in Singapore as they would find JB properties substantially more price competitive. Further, Malaysian workers who have previously rented in the northern region in Singapore may decide to rent in JB instead since the commuting time can be substantially reduced. There are no official data on Malaysian tenants renting in Northern Regions in Singapore - primarily Woodlands, Sembawang and Yishun, but it would be highly likely that HDB rentals would bear the brunt of the negative impact, since it is the "lowest-hanging fruit" and the tenant profile group is likely to be the most income-constrained, and hence the most price sensitive. As for condo rentals, some Malaysian tenants would prefer renting in gated JB condos which may offer much wider spaces and greater amenities. An example would be Princess Cove which is just 3 mins away from the JB Immigration Checkpoint.

As for property purchase, it is reasonable to assume that the Malaysian Permanent Resident (PR) group is most likely to commit to the purchase of SG property in the northern side of Singapore since they will not be subject to the hefty foreigner Additional Buyer Stamp Duty (ABSD) rate of 60%, but instead pay a much-reduced ABSD for PRs of 5%. They may choose to buy JB own-stay properties instead to hedge the cost-of-living differences since the time, effort and resources to do the commute between JB and SG would be substantially cut with the RTS. However, the dampening effect on housing demand in SG could be differentiated between HDB and Condos. It is more likely that HDB demand will fall greater than Condo demand as the Malaysian PR buyer group for HDB would have to be married and attained PR status for at least 3 years, and they are also likely to be more income-constrained and hence more price sensitive.

Housing Demand by Singaporeans in Northern Regions of SG

Anecdotally, I have heard of Singaporean friends and clients expressing interest in buying SG properties in the northern side of Singapore, and this is evidenced by the stellar transaction volumes of the new built properties - Norwood Grand (84% sold on launch weekend) and Canberra Residences (40% sold on launch weekend).

The RTS Link could have enhanced Singaporean buyers' preferences for Northern side properties as it offers a cost-of-living hedge by improving the ease of travel to JB for food, groceries and entertainment.

However, I would be less sanguine about rental demand for Northern side properties by Singaporean renters, as there is only one famous school in the North (you-know-i-know) and other than Singaporean families with kids renting in lieu of collecting keys to their incoming house, Singaporean renters with no kids can also elect to rent in JB for a much-lower rent and commute to SG for work if needed, especially if their workplaces are in the northern part of SG.

Final Thoughts

In summary, the negative impact of JB-SG RTS link may outweigh the positive impact and hence I have been educating my clients and prospects to reduce exposure to Northern-side properties, unless it is for pure own-stay purposes. For investment purpose, I highly doubt the rental demand for non-Singaporeans will hold up, simply because the commute between Woodlands North Station and Bukit Chagar is only 6 mins, and they can carry on travelling to other parts of Singapore via the Thomson East Coast to Central Singapore in under one hour. This may subsequently affect property price growth for Northern properties in SG.