4-room BTO apartments at Keppel Club site could cost over S$700,000, high demand expected: analysts

While the supply of 6,000 new HDB apartments on the Keppel Club site is seen as ‘fairly large’, they are still likely to sell out given Singaporeans’ ‘overwhelming demand’ for apartments in a prime location , said PropNex’s head of research and content. Wong Siew Ying.

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

This means that apartments could also experience strong demand for resale, after leaving the minimum occupancy period, she added.

“Given the attractive features of the site, we consider future apartments on the Keppel Club site to be in the ‘limited edition’ category. As such, we believe that the HDB apartments on offer should fall under the PLH model due to their extremely prime location.

For example, as seen with the Pinnacle @ Duxton, apartments in prime locations are “highly desirable”, with many resale apartments for over S$1 million, Ms Wong said.

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

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

These apartments will also receive additional subsidies, but those who eventually sell their units will be required to donate a percentage of the resale price of the apartment to HDB.

If apartments are sold on the PLH model, four-room apartments could cost between S$600,000 and 700,000, while three-room apartments could cost between S$400,000 and 450,000, Ms Wong said.

BTO’s recent launch at nearby Telok Blangah Beacon in May 2021 saw three- and four-bedroom apartments starting at S$420,000 and S$600,000 respectively, she noted.

“Given the extremely prime location, we expect Keppel Club apartments to be expensive and the government to apply more subsidies to keep them affordable,” she added.

While those who apply for a unit there will face ‘fierce competition’, that may not deter many families from trying to secure a place in the Greater Southern Waterfront area, Ms Wong said. .

“That said, some potential buyers might prefer to move towards other BTO projects, aware of the fierce competition and prefer to opt for a less popular location in order to have a better chance of obtaining a new apartment.”

Ms. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, also estimated that with the PLH model, the price of a four-room apartment on the Keppel Club site would drop slightly, nearly or slightly higher than launch. price of River Peaks in Rochor and King George’s Heights in Kallang, between 500,000 and 700,000 Singapore dollars.

“The government could set aside some apartments as rental units for low-income families, community care apartments for the elderly and some flexible two-room apartments, to provide more housing options for Singaporeans” , she added.

“This decision can be taken to ensure that apartments in the Greater Southern Waterfront remain affordable, accessible and inclusive for different groups of Singaporeans, and help close the income gap by providing a chance for low-income groups and older people to enjoy of a house. with sea view.”

She estimated that without the PLH model, a four-bedroom BTO apartment on the Keppel Club site could see launch prices of around S$600,000 to S$720,000.

In comparison, a three-bedroom PLH apartment on the site could see launch prices of around S$380,000-480,000, while a three-bedroom BTO flat could see launch prices of around S$400,000. 520,000 Singapore dollars.

BTO apartments due to launch on the Keppel Club site are expected to be “heavily oversubscribed”, with around 10 applicants vying for one unit, said Lee Sze Teck, senior director of research at property firm Huttons Asia.

He echoed that these apartments are likely to fall under the PLH model given their prime location. “There aren’t many public apartments that offer unique living by the water and close to nature.”

According to the PLH model, Mr. Lee estimated that a four-room BTO apartment could cost between S$650,000 and 760,000, while a three-room apartment could cost between S$360,000 and 405,000.

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