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Sustainability of Highline Residences’ demand uncertain

Posted on 18 Sep 2014 | Comments Off

Given the popularity of Tiong Bahru as an estate, the positive response for 500-unit Highline Residences (pictured) by Keppel Land is not unexpected. According to media reports, about a quarter of the units at the condominium in Kim Tian Road were sold over the weekend.

However, DBS Group Research believes investors may be squeezed from lower rental rates due to a high number of new supply completions. Additionally, as the project’s TOP expected to be from 2018 onwards, average mortgage rates are also expected to rise by then.

In a recent report, it said, “Despite the slight premium in pricing, we believe buyers are attracted to the project, given its new and probably the overall ‘lifestyle package’ that Keppel Land is offering buyers. We believe buyers are attracted to the smaller-sized units (and thus smaller total quantum), with the intention of renting them out eventually.”

Based on rentals of properties in the vicinity (about $5,000 to $5,500 per months for a 1,000-sq ft unit), this would work out to a new yield of 2.7 percent. Meanwhile, given expectations of high refinancing rates in the medium term, DBS Group Research foresees higher than current average loan financing costs of around 1.5 to 18 percent.

DBS Group Research will look out for more data points of sales take-up rates for subsequent phases of Highline Residences in the coming months to determine the sustainability of its demand. “Despite the good stats, we believe that this does not signal a turn in sentiments for Singapore property as we believe that demand remains selective – projects located near established amenities and/or MRT stations continue to see stronger demand than others,” it said.

The pricing of Highline Residences also puts the spotlight on prices of resale condos within the vicinity of Tiong Bahru MRT. According to the report, prices average between $1,400psf and $1,700 psf.

For example, the latest transactions at Meraprime at Jalan Bukit Ho Swee were at $1,400 psf while Twin Regency at Kim Tian Road saw its latest transactions at around $1,600 to $1,700 psf.

Image source: highline-residence.com.sg

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Posted in New Launches

Tagged Highline Residences, Keppel Land, KIM TIAN ROAD, Tiong Bahru

September sales expected to spike

Posted on 17 Sep 2014 | Comments Off

While last month’s new private home sales continued to weaken, new sales volume in September is expected to improve from July and August 2014, according to analysts.

For instance, OrangeTee expects sales volumes to be around 750 units to 850 units for September.

The market is likely to experience more deals soon, as anticipated projects such as Highline Residences, and 70 St Patrick’s are expected to launch in September while Marina One is expected to launch in early October.

According to media reports, Highline Residences by Keppel Land has sold over 80 percent of the first 160 units, and Marina One by M+S has also received good response during its private viewing last weekend. Kemmy Tan, CEO at M+S said to PropertyGuru, “Interest has been strong with over 800 visitors to our show gallery over the weekend.”

Alice Tan, Director & Head of Research at Knight Frank Singapore, said, “Developers are also likely to intensify efforts to launch projects with attractive offers to boost sales performance in view of a traditionally quiet year-end period ahead.”

She added, “Buying sentiment for new launches is likely to remain fairly muted in light of the current cooling measures.”

As 2014 approaches its last quarter, analysts believe new private home sales volume for the year is likely to hover around 8,000 to 9,000 units, falling just short of the 10,000-unit mark.

Additionally, PropNex CEO Mohamed Ismail Gafoor expects a cloud of stillness will continue to hang over the high-end segment. “The spotlight will be on more affordable mass and mid-tier market segments. The outlook for the private residential market will continue to be dismal for the rest of 2014 so long as the cooling measures and the TDSR framework remain in their current form,” he said.