4-room BTO flats at Keppel Club site could cost more than S$700,000, high demand expected: Analysts

SINGAPORE: Buyers who are interested in the new Housing and Development Board (HDB) flats built on the Keppel Club golf course site could pay more than S$700,000 for a four-room Build-to-Order flat, property analysts said. 

The development will likely see high demand, and some flats may come under the Prime Location Public Housing (PLH) model, they said. 

However, it will be important to ensure that public housing remains inclusive to different segments of the population, and there may be rental units set aside in the area, analysts added. 

Minister for National Development Desmond Lee announced on Tuesday (Apr 12) that about 6,000 HDB flats will be built on the site of Keppel Club, with the first BTO project expected to launch in three years. 

It was previously announced at the 2019 National Day Rally that about 9,000 new public and private homes will sit on the Keppel Club site. 

Measuring around 48 hectares – about the size of 86 football fields, the area will be redeveloped for housing when the golf club’s lease “runs out”, said the National Development Minister. 

With its central location and two MRT stations nearby - Labrador Park MRT and Telok Blangah MRT - the estate is likely to be car-lite and residents will be able to get around by walking or cycling. 

The lease of Keppel Club expired on Dec 31, 2021, but Keppel has been granted multiple extensions to facilitate its clearance and reinstatement of the site, said the Singapore Land Authority (SLA) in response to queries. 

While the supply of 6,000 new HDB flats offered at the Keppel Club site is considered “fairly sizable”, they are still likely to sell out given the “overwhelming demand” among Singaporeans for flats in a prime location, said PropNex’s head of research and content Wong Siew Ying. 

The Greater Southern Waterfront is a high-profile waterfront development that is close to the city, and flats in the Keppel Club site are likely to have a “high potential for capital appreciation”, said Ms Wong. 

This means the flats could also see strong resale demand, after they exit the minimum occupation period, she added. 

“Given the attractive site attributes, we would consider the future flats on the Keppel Club site to be in the ‘limited edition’ category. As such, we think that the HDB flats offered should come under the PLH model because of their extremely prime location.” 

For example, as seen with the Pinnacle @ Duxton, prime location flats are “very desirable”, with many resale flats there going for more than S$1 million, said Ms Wong. 

“To mitigate the lottery effect, we think the PLH model should be applied on all future BTO projects in Greater Southern Waterfront,” she added. 

Under the PLH model, buyers of BTO flats in prime locations will face a longer minimum occupation period of 10 years, double that of typical BTO projects. 

These flats will also come with extra subsidies, but those who eventually sell their units will have to pay a percentage of the flat’s resale price back to HDB. 

If the flats are sold under the PLH model, four-room flats could cost S$600,000 to S$700,000, while three-room flats could cost S$400,000 to S$450,000, said Ms Wong. 

The recent BTO launch at the nearby Telok Blangah Beacon in May 2021 saw three-room and four-room flats starting at S$420,000 and S$600,000 respectively, she noted. 

"Given the extremely prime location, we expect the Keppel Club flats could be pricey and the Government may have to apply more subsidies to keep them affordable," she added. 

While those applying for a unit there will face "stiff competition", this may not deter many families from trying to get a place in the Greater Southern Waterfront area, said Ms Wong. 

"Having said that, some would-be buyers may decide to go for other BTO projects instead, being mindful of the keen competition and prefer to opt for a less popular location so as to stand a better chance of getting a new flat."

Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, also estimated that under the PLH model, the price of a four-room flat at the Keppel Club site would come down slightly, close to or slightly higher than the launch prices of the River Peaks at Rochor and King George’s Heights in Kallang, at about S$500,000 to S$700,000. 

“The Government may set aside some flats as rental units for lower-income families, community care apartments for seniors and some two-room flexi flats, so as to offer more housing options for Singaporeans,” she added. 

“This move may be done to ensure that flats in the Greater Southern Waterfront remain affordable, accessible and inclusive for different Singaporean groups, and help breach the income gap by offering a chance for lower-income groups, and seniors an opportunity to enjoy a home with sea view.” 

She estimated that without the PLH model, a four-room BTO flat at the Keppel Club site could see launch prices of about S$600,000 to S$720,000. 
 
In comparison, a three-room PLH flat at the site could see launch prices of about S$380,000 to S$480,000, while a three-room BTO flat could see launch prices of about S$400,000 to S$520,000. 

The BTO flats set to launch at the Keppel Club site are expected to be “heavily over-subscribed”, with an estimated more than 10 applicants vying for a unit, said real estate firm Huttons Asia’s senior director of research Lee Sze Teck. 

He echoed that these flats are likely to fall under the PLH model considering their prime location. “There are not many public flats that offer unique waterfront living and close to nature.” 

Under the PLH model, Mr Lee estimated that a four-room BTO flat may cost S$650,000 to S$760,000, while a three-room flat may be priced at S$360,000 to S$405,000. 

He also noted that this is similar to the prices of the River Peaks launch, accounting for “time differences”.

Analysts agreed that the launch of BTO flats at the Keppel Club site will drive up prices for other properties in the area. 

Buyers who do not want the restrictions of a PLH flat may look to nearby resale or BTO options, and these flats may potentially see more demand too, with prices pushed up in the process, said Mr Lee. 

Resale flats at the nearby Telok Blangah Towers have reached S$975,000 for a four-room premium flat, and this may exceed S$1 million when the BTO flats at the Keppel Club site are launched, he added. 

PRIVATE HOMES

As for the remaining 3,000 private homes to be built on the Keppel Club site, analysts said the site is likely to be “highly favourable” to buyers and developers with its sea views. 

The private homes built on the Keppel Club site are likely to be non-landed homes, and design restrictions may be imposed, said Mr Lee. 

“For example, those facing Sentosa may be low-rise while those nearer to Telok Blangah Road may be high rise. This can ensure everyone gets to enjoy the sea view,” he added. 

Prices for these private homes may be in the range of S$2,400 to S$2,500 psf, he said. 

Future private residential projects in this area are expected to be parcelled out and sold via Government land sale tenders, and eventually launched for sale in the next three to five years, said PropNex CEO Ismail Gafoor. 

“We believe that there will be keen interest amongst many developers who will want a stake in the Greater Southern Waterfront and help to shape what would be a vibrant and iconic live-work-play waterfront destination,” he added. 

“In addition, with the waterfront concept and its prime location in the southern-central region of Singapore, homes in the Greater Southern Waterfront will be a hit amongst both local buyers, investors and foreigners.” 

However, due to environmental constraints and the need for ecological preservation, developers may have to employ more complex construction methods, which may increase development costs and influence future prices, said Mr Ismail. 
 
Future selling prices of private residential projects at the Greater Southern Waterfront are expected to be in the range of S$2,500 to S$2,700 psf or higher, he noted, taking reference from latest project launches in the area. 
 
Ms Sun noted that most of the private condominiums in the area facing the sea have already been taken or sold under the Keppel land parcels. 

“Therefore, the clearing of the existing sites will free up new land for future buyers who are keen to purchase a home facing the sea in the Southern part of Singapore,” she said. 

If new condominiums are built near the seafront, future prices may be quite close or higher than the currency transacted price at Reef at King’s Dock, said Ms Sun. Median prices for the condominium have reached S$2,405 psf in the first quarter of 2022. 

“The residential homes in this area will have good rental potential. The location is near a tourist spot at Sentosa, within proximity to many commercial buildings or offices at the harbourfront and Mapletree Business City, retail malls at Vivocity and Harbourfront, and near Orchard Road and CBD,” she added.