Prices of good-class bungalows (GCBs), the cream of the Singapore residential market, eked out respectable gains to reach a new high last year despite the slowdown in the luxury market.
The average price climbed 6.7 per cent to $1,428 per sq ft (psf) last year, new data from consultancy CBRE showed yesterday. This surpassed the previous high of $1,405 psf recorded in 2012.
The average price, however, is only a ballpark indicator and does not fully account for factors such as location, size, age, design, terrain and frontage.
A limited supply of GCBs, typically with a land size of 1,400 sq m, or 15,069 sq ft, and their prestige have helped prop up values.
There are only about 2,700 GCBs here in 39 designated estates, and only Singapore citizens are allowed to buy these homes. Exceptions are made for permanent residents with special permission. Also, anyone can buy on Sentosa.
Demand for GCBs depends on wealthy people, most of whom have deep pockets that are affected to a lesser extent by the cooling measures that have weighed on the wider property market, said CBRE research head Desmond Sim. "It's a matter of whether they want to fork out that amount of money."
Despite the price gains, transaction volumes are still sluggish, with 28 GCBs sold for a total of $626.14 million last year.
That was a touch lower than the 29 GCBs sold for $681.98 million in 2013, and a far cry from the 54 GCBs sold in 2012, with a value of $1.17 billion.
Cooling measures that jolted the market in January 2013 levied an additional buyer's stamp duty of 7 per cent on Singaporeans buying a second home and 10 per cent on a third and subsequent buy.
In Sentosa Cove, where foreigners have traditionally propped up demand, just three bungalows were sold last year at an average price of $1,676 psf, down 20 per cent from a year earlier, said CBRE.
"The dismal sales were primarily due to the absence of foreign buyers, deterred by the hefty 15 per cent ABSD payable," said Mr Sim, on the Sentosa sales.
Condo units on the mainland have suffered as well, in both the resale and primary markets. Average prices of resale luxury condo units fell 6.2 per cent to $2,650 psf from 2013.
At new developments, average prices were down 17 per cent to $2,450 psf in the same period, but that was a function of projects available as well, noted Mr Sim.
Last year, luxury condo sales were dominated by 41 units at GuocoLand's Goodwood Residence in Bukit Timah Road, which recorded a median price of $2,461 psf, according to official data.
Seven luxury condos, with 467 units in all, were completed last year: Wheelock Properties' Ardmore 3 and Le Nouvel Ardmore, SC Global's Sculptura Ardmore, Hotel Properties' Tomlinson Heights, Pontiac Land Group's Hana, City Developments and Wing Tai's Nouvel 18, and China Sonangol Land's TwentyOne Angullia Park.
In a slowing market, developers are likely to adopt "innovative sales schemes", such as rental guarantees or renovation rebates, than cut prices to market the new units this year, said Mr Sim.
"It will be a bottomless pit if they cut prices. If they lower prices by 10 per cent, buyers might wait for even further cuts."
This article was first published on March 5, 2015.
Friday, Mar 06, 2015
The Straits Times
Source: AsiaOne