Discover why KepLand’s stellar Highline Residences sales isn’t good news for the local property market

Tiong Bahru is just an especially attractive location.

Keppel Land roused the sluggish domestic property scene with news that more than 80% of 160 released units in its newest project, Highline Residences, has been snapped up within its opening weekend. KepLand lured buyers with discounts and lifestyle perks, and customers came from a mix of investors and homebuyers.

However, Highline Residences' stellar start does not signal a turnaround for the country’s lackluster property market. According to DBS, Highline Residences is particularly attractive because it was tied with KepLand’s lifestyle package and because of its proximity to the Tiong Bahru MRT station.

According to DBS, “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 (c.S$5,000-S$5,500/mth for a 1,000-sqft apartment), this would work out to a new yield of 2.7%, while still higher than current average loan financing costs of c.1.5%-18%, is tight in our view, given expectations of high refinancing rates in the medium term."

“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. We look out for more datapoints of sales take-up rates for subsequent phases of this project in the coming months in order to ascertain the sustainability of its demand,” DBS added.

Here’s more from DBS:

The positive start for Highline Residences is not unexpected given the popularity of Tiong Bahru as an estate. Tiong Bahru is located at the fringe of the Central Business District (CBD) and is popular with expatriates.

This is further fueled by the lack of new launches in the vicinity for the past seven years, making Highline Residence a much awaited property launch for home buyers/investors looking for a home there. In addition, its location just opposite Tiong Bahru MRT and Tiong Bahru plaza is also an attractive attribute.

The pricing of Highline Residences puts the spotlight on prices of resale condos within the vicinity of Tiong Bahru MRT which, based on our checks, are averaging between S$1,400psf and S$1,700psf.

Latest transactions at the slightly older 99-LH property Meraprime were at S$1,400 psf while Twin Regency (FH) saw its latest transactions at c.S$1,600-S$1,700 psf.

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