The second quarter of this year saw a surge in the number and value of transactions in Good Class Bungalow Areas - to at least 11 deals totalling S$282.3 million, up from just four deals adding up to S$95.3 million in Q1.
The latest Q2 performance - which is also a marked improvement from the five deals worth S$81.8 million in the same period last year - was buoyed by the sale of 35 Ridout Road in May at S$91.7 million, the biggest sale ever, on absolute quantum price basis, in a GCB Area.
The same month also saw a record per square foot of land price of S$2,190 psf in a GCB Area being achieved for a luxuriously built and furnished bungalow in Bishopsgate. The three-year-old bungalow, which has two storeys and a basement, fetched S$33 million.
Big-ticket transactions in June included a house along Belmont Road that was sold by seasoned bungalow investor Thomas Chan for S$44.19 million or S$1,419 psf on land area of 31,129 sq ft, and an old bungalow at Bin Tong Park that was transacted at S$30 million or S$1,400 psf. On site is an old house built more than 30 years ago.
The momentum appears to be continuing this month.
Talk in the market is that over the weekend, an option was granted for an old bungalow in Queen Astrid Park for S$32 million or close to S$1,170 psf on land of 27,370 sq ft.
This would be at least the sixth time the old single storey property would be changing hands in the past nine years, although the holding period in the latest transaction would be five years, going by caveats information.
Newsman Realty is believed to have brokered the latest sale. When contacted, the firm's managing director, KH Tan, declined to comment on the deal but let on that "interest in GCBs has started to pick up significantly since three months ago".
"We have exclusive listings for more than 10 GCBs in locations such as Swiss Club Road, Peirce Hill, Peel Road, Caldecott Hill, Leedon Park and Holland Park," he added.
The firm has seen strong interest from potential buyers who are looking for a GCB to live in - including new Singapore citizens as well as existing citizens who aspire to upgrade from a small landed house to a GCB. The majority of these potential GCB buyers are businessmen, according to Mr Tan.
Based on caveats information, the value of transactions in Good Class Bungalow Areas reached S$378 million in the first half of this year. The figure for the whole of last year was S$626 million.
Mr Tan from Newsman expects the value of GCB transactions this year could exceed S$700 million. The buyer-seller gap has narrowed. "For brand new houses, buyers, if they see a property they like, are prepared to pay above valuation. Sellers have also become more realistic in their pricing expectations."
Giving his take, Realstar Premier Group managing director William Wong said that while the price gap for GCBs has narrowed since the beginning of this year, it could widen again slightly if buyers become pessimistic because of the situation in Greece. "July and August are expected to be slow months as some market participants take a break, but we anticipate a pick-up in activity from September onwards," he predicts.
"This year, the transaction volume and value of GCBs may surpass last year by at least 20 per cent; the last two years were difficult because of the lingering effects of the cooling measures which resulted in a widening price gap between buyers and sellers.
"Finally, we've been seeing light at the end of the tunnel since January."
Mr Wong disclosed that the value and volume of landed housing transactions (including GCBs) brokered by Realstar in the first half of this year is "way higher than the same period last year".
Alexs Chua, associate district director at OrangeTee, said that while there is buying interest in the GCB market, buyers are looking for good value. "They are not rushing because they anticipate a further price softening in some locations.
"On the other hand, most of those who are looking to sell their GCB properties did not buy at high prices and therefore are not in a position where banks are chasing them for margin calls."
Moreover, he points out, investors holding GCBs would be mindful that if they were to sell their properties now and look for a replacement or investment property, they will be hit by the additional buyer's stamp duty and the total debt servicing ratio.
This article was first published on July 14, 2015.
Wednesday, Jul 15, 2015
The Business Times
Source: AsiaOne