Will The High Speed Railway Project Termination Affect Property Prices in Jurong?

For years, the governments of Singapore and Malaysia have been planning to construct a High Speed Railway (HSR) connecting Singapore and Kuala Lumpur.

The ambitious project would have boosted connectivity to the Malaysian capital via a 350 km railway, stopping in Singapore, Iskanar Puteri, Batu Pahan, Muar, Melaka, Seremban, Sepang-Putrajaya and finally Kuala Lumpur. It would have taken about 90 minutes to travel between Singapore and KL, a huge improvement from the current train service’s 11 hours.

The Singapore terminus of the railway was supposed to be at Jurong East, where travellers from Singapore would clear customs before being transferred to Malaysian immigration. The land on which the former Jurong Country Club stood had already been acquired to make way for the High Speed Railway terminus.

Then, the deal fell apart.

 

High Speed Rail (HSR) Termination

The Singaporean and Malaysian governments announced plans for the HSR in 2013, and signed a legally binding agreement to go ahead with the project in 2016.

Construction was supposed to begin in 2018, but in a foreshadowing of things to come, was postponed to May 2020 due to delays on the Malaysian side. The Malaysian government claimed that they wanted to review the costs of the project.

As we all know, 2020 was financially ruinous for many countries due to the COVID-19 pandemic. So, many were not surprised when the HSR project was terminated on 31 Dec 2020 after the agreement lapsed following a failure to begin working on it by the stipulated deadline.

The reason cited by the Malaysian side was that they objected to the use of AssetsCo, an assets company that was set up to protect both countries’ interests and designated as systems supplier and network operator of the railway system.

This has been a blow for the Singapore side as the project would have boosted economic competitiveness just as the country was going through a recession.

Since construction never started, not much money has been lost on either side, and Malaysia is obliged to compensate Singapore for any costs incurred by the latter up to this point.

The grand plans for the HSR were part of the government’s ambitions for developing Jurong East into Singapore’s second CBD. In the past decade, the area has been transformed into a shopping and entertainment hub, with new malls like JCube, Westgate and JEM opening in the first half of the 2010s.

While developments like Lakefront Residences, Lake Grande and Lakeville have used their scenic location near Jurong Lake as key selling points, property values in the Jurong area have not increased that greatly. For example, prices remain competitive when compared to other Outside Central Region (OCR) areas even further away from the city core.

However, had the HSR project been given the go-ahead, it is likely that Jurong property prices would have been given a big boost, particularly amongst buyers with business interests or family in Malaysia.

 

How Will the HSR Termination Affect Jurong Property Prices?

At first glance, the termination of the HSR may seem to spell disaster for property owners in Jurong. But upon closer inspection, it seems that anticipation of the HSR did not result in outsized demand for property in the area. Jurong’s current popularity as a residential area has largely been due to development of the precinct over the past decade, which should not be too heavily affected by the termination of the HSR.

When we compared Jurong with eastern neighbourhoods at equal distance from the CBD, we found that there was not much difference. 

Based on current PropertyGuru listings, a 4-bedroom condo in Tampines is priced at about $1,087 to $1,286 per square foot (psf). In the Jurong East area, it is about $970 to $1,054 psf. This despite the fact that Tampines is located slightly further away from the CBD.

The HSR services were originally slated to begin in January 2031, more than a decade away. If the termination was announced in later stages – for example, just as the HSR was about to be completed – then we may see a more dramatic impact on Jurong property prices. However, the termination comes as little surprise, really, as we’ve already been seeing red flags in the past few years. Previous delays and postponement are likely to have already discouraged property buyers from basing their decisions on the HSR project alone.

As such, the termination of the HSR might have a slight depressive effect on Jurong property prices in the near future as buyers react to the news of the project’s termination. But this is unlikely to last, and the Jurong Lake area is likely to continue to enjoy decent demand thanks to the area’s existing merits.

 

Other Developments in Jurong We Can Still Look Forward To

HSR or no HSR, Jurong continues to be western Singapore’s liveliest neighbourhood! Here are three ways in which the area will continue to develop in the coming years.

Jurong Lake District

The Jurong Lake District is being developed into a major leisure, recreational and scenic area. The lakeside zone looks set to be popular with potential residents due to its scenic character, green spaces and park connectors. As the area continues to grow, more dining and recreational businesses are likely to put down roots.

Recent and upcoming condo developments include J Gateway, Lake Life, Lakeville, Lake Grande, Parc Riviera and Westwood Residences EC. As the Jurong Lake District undergoes further transformation, developers are likely to seize the chance to build more residential developments.

Jurong Innovation District

The west side is now home to the Jurong Innovation District, a network of R&D, technology and educational centres for the manufacturing industry. As the Jurong Innovation District grows, demand for housing is likely to rise as more people choose to work and live in the area.

Jurong Region Line (JRL)

The Jurong Region Line on the MRT network will open in 2026, connecting Choa Chu Kang to Peng Kang Hill in the far west and Jurong Pier in the south. These new stations will offer greater connectivity to certain Jurong residents, particularly those living close to the new Gek Poh, Jurong West, Jurong Town Hall and Corporation stations.

Thanks to the slew of upcoming developments, Jurong is likely to remain one of the busiest and most popular neighbourhoods in the west of Singapore. That being said, the bustling and rather industrial atmosphere might not be for everyone, and may push some potential buyers to quieter Outside Central Region (OCR) neighbourhoods.

Interested in living in this lively neighbourhood? Browse the top properties for sale in Jurong. 

 

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