Keppel Land held the preview of its 500-unit Highline Residences on Kim Tian Road in Tiong Bahru last September. The preview saw 149 (93%) of 160 units released sold, according to URA data, with transaction prices ranging from US$1,627 psf to US$2,245 psf or at an average of about US$1,900 psf. Following the preview of the project, the showflat has since been closed. There are no plans to re-launch the project as yet, according to a source.
Whether Keppel Land will adjust the selling prices of the 500-unit, 99-year leasehold condo on Kim Tian Road remains to be seen. After all, the developer paid a record US$550.8 million ($1,163 psf per plot ratio) for the site in April 2013. Property consultants like Nicholas Mak, executive director of research & consultancy had estimated then that the breakeven cost for the project would be around US$1,700 psf to US$1,800 psf.
Therefore Highline Residences’ selling prices are not expected to be lower than the average price of US$1,900 psf, according to a property agent. Whether it will be higher than the average of $1,900 psf achieved to date remains to be seen
Highline Residences will therefore maintain the benchmark pricing for the Tiong Bahru area “despite the current downbeat market conditions,” says Tim Ong of ERA Realty. This could explain why there have been very few transactions in the Tiong Bahru area in the first six months of 2015 as some sellers of private condo units hold on to their asking prices.
“Some home sellers continue to have inflated price expectations,” notes SLP’s Mak. However, he cautions that this might not be the best strategy as homebuyers and tenants searching for a city fringe location within close proximity to an MRT station have many choices. In the current market, both buyers and tenants are price sensitive. “Homebuyers also continue to face tighter loan restrictions and uncertainty about what lies ahead in terms of the property measures and loan limits being relaxed, among other factors,” he adds.
Despite Tiong Bahru’s bohemian lifestyle offerings, the neighbourhood is facing stiff competition from other up-and-coming city fringe locations like Dakota, Lavender and Potong Pasir, observes Mak.
This is reflected in the recent resale of a unit at the 99-year leasehold condo Meraprime located at Jalan Bukit Ho Swee. The 213-unit development by MCL Land was launched in 2004 at an average price of US$600 psf. The project completed in 2006, is located behind Tiong Bahru Plaza and a short walk to the Tiong Bahru MRT station. The recent transaction was for the resale of am 18th floor 1,173 sq ft three-bedroom unit that changed hands for US$1.67 million (US$1,423 psf) in early June. The unit last changed hands in 2010 for US$1.55 million (US$1,321 psf).
Even rents have come off in the Tiong Bahru area. A three-bedroom unit of that size could command monthly rental rates of US$5,800 back at the peak in 2012. Today, rental rates of such units are hovering around the US$5,000 mark, notes ERA’s Ong.
At Twin Regency, a 234-unit freehold private condo by UOL Group and completed in 2007, there were two resales this year – one in February and the other in May, according to caveats lodged with URA Realis. The unit in February that had changed hands was a 1,776 sq ft four-bedroom unit on the 22nd level of one of the 36-storey towers. It was sold for US$2.3 million (US$1,295 psf). It was last purchased in 2007 for US$1.9 million (US$1,070 psf) when the project was newly completed.
The most recent transaction at Twin Regency was the sale of a 2,121 sq ft penthouse that changed hands for US$2.95 million (US$1,391 psf).
The former was a 2,121 sq ft penthouse that changed hands for US$2.95 million (US$1,391 psf). The unit was first purchased for US$1.51 million (US$712 psf) in 2006, hence the owner still saw a capital gain of 95.3% in nearly a decade.
Meanwhile at Central Green Condo, located adjacent to Twin Regency, a unit on the 14th floor of one of the three residential blocks was sold for US$1.59 million (US$1,233 psf). The 1,292 sq ft three-bedroom unit was last purchased for 2002 for US$760,000 (US$588 psf), hence the seller saw the value of his property double over the last 13 years. Central Green is a 412-unit, 99-year leasehold condo developed by Wing Tai Holdings and completed in 1995.
This article appeared in the City & Country of Issue 682 (June 22) of The Edge Singapore.