THE prospect of having public housing on the plum Keppel Club site after its lease expires in two years has excited property market watchers.
They have, however, offered ideas on how to find an equitable solution to the “lottery effect”, given that public-housing owners stand to make windfalls from selling these units after having been lucky enough to land them through a ballot.
Prime Minister Lee Hsien Loong said at the National Day Rally on Sunday that the Keppel Club site has enough land for 9,000 homes – HDB and private housing with waterfront promenades, greenery and open spaces.
The site will be part of the Greater Southern Waterfront (GSW), comprising 30 km of coastline stretching from Gardens by the Bay East to Pasir Panjang.
Given its prime city-fringe, waterfront location, property consultants say Housing and Development Board (HDB) flats on the site will not come cheap.
Edmund Tie & Co (SEA) chief executive Ong Choon Fah said: “The Keppel Club site is a coveted site with panoramic views of the sea and Mount Faber, and is near the CBD and accessible to all parts of Singapore.”
ERA Realty Network key executive officer Eugene Lim expects the HDB to launch Build-to Order (BTO) flats on the site at close to S$1 million for a five-room unit, “so one can expect that the resale prices, when the time comes, will be even higher”.
He noted that HDB’s Sale of Balance Flats exercise in May included three units of five-room flats in Queenstown priced at between S$720,000 and S$757,000 each. “With waterfront views, BTO flats on the Keppel Club site are likely to be priced even higher,” he reasoned.
Ms Ong said having both private and public housing in such a prime waterfront site is a socially inclusive move. “That said, much thought needs to be given regarding the affordability of these homes to buyers, and to prevent the lottery effect when these HDB flats – heavily subsidised by the state and obtained by chance through a ballot exercise – qualify for resale at open market values after the five-year minimum occupation period (MOP).”
Colliers International head of research for Singapore Tricia Song made a similar point. She said public housing units in a prime location like the GSW would be seen as goldmines, as owners could reap a windfall from selling the flats after the MOP. “This issue needs to be addressed in a fair and equitable way,” she said.
Colliers noted that this issue was raised by Minister for National Development Lawrence Wong in 2016, when he disclosed that the government could look at selling future public housing in the city under a different model – such as by imposing a longer MOP, a lease shorter than the existing 99 years, or a higher resale levy – to address the lottery effect.
Lee Nai Jia, head of research at Knight Frank Singapore, suggested that the HDB review its rules to require those who sell flats in such plum locations after the MOP to return some of the subsidies given to them by the state.
“Alternatively, the MOP could be lengthened to seven to 10 years to encourage those who buy such flats from the HDB to live in them longer and to create a community, instead of making their purchase with an eye on speculative gains.”
Dr Lee also noted that having HDB estates in the GSW is important to inject vibrancy to the area and provide the workforce for companies located there, since not all workers can afford private housing.
PM Lee, in his speech, also said that homes on the Keppel Club site will be just the start; “there is space and land for public and private housing elsewhere in the GSW too”.
To bring in more jobs to the area, plans are being drawn to inject more workplaces in the GSW. These include a commercial building above Singapore’s first 230kV underground substation to be developed next to the Labrador Park MRT station. This was highlighted in the Urban Redevelopment Authority’s Draft Master Plan 2019 exhibited earlier this year .
Savills Singapore research head Alan Cheong said the future launch and sale of land for private residential and commercial developments in the GSW would impact the property prices of existing developments in the area in two ways: “The first is a refresh of the area and that should make it more attractive to live there. The second is that the sequential launch of projects for sale in the GSW would be at stepped-up prices. This should help lift prices of existing properties there.”
PM Lee also unveiled plans to develop Pulau Brani with Sentosa, after the Brani Terminal moves to Tuas. “We will build new attractions on Brani, just like we have Universal Studios on Sentosa. We will also revitalise Sentosa’s beach areas and expand its nature and heritage trails to keep its island character.”
Land will also be set aside, probably on Pulau Brani, for the Labour Movement to build a resort.
Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield, said: “The resort is expected to be accessible to the mass market, bringing more local traffic to the south, which could help change the perception of Sentosa being too inaccessible and expensive for the local mass market.
“The large expanse of land in the GSW that is available for development is an opportunity to secure Singapore’s status as an entertainment hub in South-east Asia.”