Is $700,000 for a Keppel Club BTO site worth it? – Singapore real estate blog

When the Greater Southern Waterfront (GSW) was announced in 2013, one of the first things to catch the eye was the social housing announcement. How fair was it, we wondered, if future owners could land an apartment in such a prime location? Today, what was once just a topic of conversation in cafes is getting closer; and analysts are already saying apartments on the former Keppel Club site could cost up to $700,000 (and that’s for a 4-room apartment!) But would it be worth such a price?

What’s happening on the Keppel Club website?

The Keppel Club lease will not be renewed when it expires in June this year. The club’s sizeable grounds and some surrounding areas – which are around 48 hectares – will be used for a mix of public and private accommodation. It is expected to produce around 9,000 new homes, of which around 6,000 will be HDB apartments.

Corals at Keppel Bay sea view

This site is part of the GSW, and some would say it is one of the better rooms. There is an unobstructed view of the waterfront and from some parts you may be able to see Sentosa clearly. The URA also said it would be a car-only zone, with a particular emphasis on greenery and parks.

We know that one of these planned parks is Berlayer Creek Nature Park, which spans 6.5 hectares and is adjacent to future residential developments. Another slightly larger seven-hectare park will feature four “green corridors” that encircle the site and stretch between the HDB blocks.

berlayer creek

MRT stations Telok Blangah and Labrador (Circle Line) are probably within walking distance. These are just a stop or two from HarbourFront (Circle Line and North East Line), with its large shopping mall, access to Sentosa and the ferry terminals.

For many this would be a dream location for an HDB apartment. Convenience aside, landing a unit here could be a godsend given the potential for resale and rental gains.

The first BTO launches on this site should take place in about three years. We have previously identified this as a likely area for Prime Housing (PLH), and we remain confident that apartments here will fall under the scheme.

Will BTO apartments in this area really cost $700,000?

If HDB is going to base prices solely on surrounding fixed resale values, that’s arguably a fair amount.

Consider the HDB development near Blangah Court. This is a very old development, completed in 1976. Discover the prices despite the advanced deterioration of the lease:

Date Block Stage flat type Price
April 2022 45 12 2 rooms $285,000
March 2022 44 4 3 pieces $365,000
January 2022 48 6 5 pieces $625,000
December 2021 44 9 Unknown $333,000
September 2021 45 ten 2 rooms $258,000
Source

If a 45-year-old apartment farther from the waterfront can fetch the above prices, one could say that a brand-new apartment with better amenities can certainly hit the $700,000 mark.

Here’s a look at some of the most expensive recent BTO launches:

Dakota Ridge $522,000 – $688,000
Arch of the Queens $540,000 – $670,000
River peaks i and ii $582,000 – $688,000
King George Heights $488,000 – $675,000
Beacon Telok Blangah $610,000 – $710,000

With some of the above items already close to the $700,000 mark for a 4-bedroom apartment as well (Telok Blangah Beacon topped $700,000), it’s hardly surprising to see Keppel commanding such prices during of its launch as well. Especially since all these apartments have also been sold.

It’s not the only launch that’s expected to top the $700,000 mark when it launches too, the Dover Forest BTO should achieve the same goal.

We believe Keppel Apartments could benefit from a much larger subsidy and proportionally higher Subsidy Recovery (SR). This is a clawback that first buyers must pay when they sell their PLH units. We’ve seen six percent in recent projects, but we wouldn’t be surprised if it’s higher for the Keppel site.

But assuming prices really hit $700,000, would it be worth buying?

As always, there is no one-size-fits-all answer; but one of the factors we would consider is the viability of existing apartments nearby.

Telok Blangah Ridgeview 84 exterior view

Although the aforementioned Blangah Court is old, there are newer alternatives – such as Telok Blangah Heights (completed in 2001) and Telok Blangah Ridgeview, which may present other options. PLH does not apply retroactively; So even though these apartments are close to the same location, they will not suffer the inconvenience of a 10-year MOP or the need for an SR.

For owner-investors or those aiming for asset progression, Keppel Site Apartments can be a double-edged sword. The location is really great; but remember that the PLH model is specially designed to balance the manna of these areas.

If you want to upgrade quickly to a condo, for example, most PLH apartments — not just those in Keppel — won’t serve you. You will have to wait about five years for the construction, then 10 years for the MOP; so you can upgrade in 15 years old.

At the rate private home prices are rising, it’s a gamble: you hope your PLH location appreciates fast enough to keep up. Also keep in mind that the SR is a percentage of your sale proceeds, which may reduce the returns you need to upgrade. You never know how much that SR percentage might be, more than 15 years in the future.

For families, the Keppel site is not a “self-selection”, despite its vast green spaces. Apartment sizes are probably limited to 4 rooms, which may be too small for large or extended families. The Keppel Club site also lacks school proximity: apart from Blangah Rise Primary, there appears to be no other school within the one-kilometre priority enrollment zone.

More than the Rochor and Kallang/Whampoa PLH projects, we believe that the Keppel apartments – if they really sell for $700,000 – are for pure owners, who don’t see the apartment as a lottery ticket.

For these buyers, it’s probably worth it for one simple reason: the price is still cheaper than a condo or even an executive condominium, many of which would give you much less attractive locations at over a million dollars. If you don’t intend to resell, PLH is more or less a gigantic subsidy.

For more on the situation as it unfolds, follow us on Stacked. We will provide you with the latest information and changes in the Singapore property market, as well as in-depth analysis of new and resale condos.


Amanda J. Marsh