Expert Eye: Orchard

Orchard’s central location is always going to demand expensive real estate prices, Jerry Han Sin, Director and Team Leader with property consultants Property Launch, discusses what the current market is like and just how much it will cost to invest in the district

What is the overall property market like for Orchard?
Orchard (or District 9) is currently financially stable, but due to current global financial markets, we may expect certain slower rate of transactions for the next quarter or half, into early 2011. Thereafter, barring any adverse changes, we should see a steady growth in both the number of transactions and  price appreciation. Due to the limited assets – number of properties available in this area – demand should remain high.

Would you recommend purchasing property in this area?
Yes. Location and amenities-wise it offers more than any other area. Plus, one can almost guarantee that the value of the property will continue to appreciate, as Orchard remains Singapore’s main shopping belt.

Most Orchard apartments and condominiums are available on the open market, with no restrictions on sale. However, properties in this district are not mass-market, however, and belong to the mid- to high-end tier. Realistically, most would only be affordable to high net worth individuals due to the high quantum prices.

Orchard has a limited amount of available space. How will this affect properties in the area?
It is likely the future units in this district will be smaller than existing ones. This follows the patterns of similar Asian cities.  However, in District 9, you will begin to see more high-end luxury small units.

These smaller units offer multiple plus points when compared to conventional big units. They are more affordable to purchase and easier to rent out. The quantum price for these units is therefore more manageable and affordable. As such, being small, there will be a margin for growth on capital appreciation based on psf and prices will grow gradually over time.

What kind of rental yield and capital appreciation is an investor in Orchard looking at?  
Rental yield relies on demand and supply of housing, as well as expatriates coming into Singapore, whereas the purchase price is affected by the financial market performance. At present rental yields are less good – the average across the board is 4%, based on conservative quotes – since the market is appreciating.

Capital appreciation depends on when the purchaser enters the market. On average, a good investment development in District 9 is able to fetch more than 50% capital gains over investment funds for a period of 18 to 24 months

What’s your advice for potential property investors in Orchard?
A lot of potential purchasers feel that the price is too high for them for invest. They have the capacity to do so, but they are just not comfortable with the price, and would rather invest in other areas. However, in my opinion, most o verlook the potential that District 9 possesses. If you have the capacity to purchase and hold, it is the place to be.

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District Guide
A look at Orchard and its living, eating, drinking, shopping and transport options. 

Resident’s View
Two Orchard residents talk rent, convenience and the best places to eat