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More GCB transactions in 2015

Last year's tally of at least 34 deals worth S$730m, amid softer prices, is the best showing since 2012
Saturday, January 2, 2016 - 05:50
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PRICE RETREAT: An option has been granted for this two-storey bungalow along Dalvey Road at S$26 million. The freehold property, which comes with five bedrooms and a swimming pool, was said to have had an asking price of at least S$30 million a year ago.

Singapore

GOOD Class Bungalows, the creme de la creme of the landed housing market, have turned out to be somewhat of a bright spot in 2015.

At least 34 transactions totalling S$730 million in Good Class Bungalow (GCB) Areas were sealed in 2015 - up from 28 deals adding up to S$626 million in 2014.

The latest tally is also the best showing since 2012, when 54 properties in GCB Areas changed hands for S$1.17 billion. The increase in sales last year was against the backdrop of softer prices.

Realstar Premier Group managing director William Wong estimates that GCB prices retreated 10 to 15 per cent in 2015. "A good GCB in a location such as Dalvey/

Holland which used to be able to sell at S$30-32 million a year ago will probably be able to fetch S$25-27 million at best now."

He attributes the price drop to generally weaker economic sentiment globally as well as in Singapore. "Also owners are more realistic in their pricing especially for those who have not been able to find a buyer after putting their property in the market for more than a year. Coupled with the fact that there are quite a few GCBs transacted below S$20 million, this has somehow brought the overall asking prices of GCBs a notch down."

Samuel Eyo, managing director of Singapore Christie's International Real Estate, too acknowledged that prices retreated around 10 per cent last year. Besides the deteriorating economic sentiment, higher interest rates were also to blame, he noted. Among those who are in the market to sell a GCB, said Mr Eyo, are those who bought these bungalows much earlier and are in the money and "looking to diversify their portfolio - for example, into overseas properties as well as other forms of investments".

Another source of GCBs for sale is seniors whose children have moved out and who wish to downsize to a smaller home as they no longer want to maintain a GCB.

On the other hand, Mr Eyo pointed out, some owners who bought their properties in 2010 and later may not be sitting on much gains, especially after factoring in any additional buyer's stamp duty they may have paid and their potential liability for seller's stamp duty if they were to divest now.

Among the recent GCB transactions are: a 999-year leasehold bungalow along Yarwood Avenue which is believed to have been transacted at S$15.7 million or S$971 per square foot (psf) on land area of 16,163 square feet. The property has a built-up area of about 9,000 sq ft and has five en-suite bedrooms in addition to a guest room, maid's room, koi pond and a swimming pool.

Off Holland Road, a bungalow along Bukit Sedap Road has changed hands for S$20 million, which works out to S$1,004 psf on the freehold land area of 19,919 sq ft. Along Dalvey Road, within walking distance of the Botanic Gardens, an option has been granted for a two-storey freehold property at S$26 million. This works out to S$1,724 psf on the freehold land area of 15,081 sq ft. Located on an elevated plot opposite the Israeli Embassy, the bungalow comes with five bedrooms and a swimming pool.

It has a built-up area of about 8,700 sq ft and is part of The Glencaird Residences collection developed by a unit of Wharf Holdings.

Mr Eyo brokered the transaction but declined to comment on the buyer and seller.

BT understands the property is being sold by a company that is owned by a Singaporean couple who are currently living in Hong Kong. They are understood to have bought the property in April 1997 from Wharf for nearly S$13.9 million. The house was completed about 16 years ago, but is well maintained. It is currently leased out.

The buyer is Ng Han Whatt, who lodged the caveat for the purchase. He is a member of the Ng family of listed Pan-United Corporation.

When the lease on the Dalvey bungalow ends this year, Mr Ng is expected to do a major refurbishment of the property or tear it down for a complete redevelopment, market watchers suggest.

The Dalvey Road property was said to have had an asking price of at least S$30 million a year ago.

The Singaporean couple that is selling the property is said to have also bought two neighbouring bungalows, also part of Glencaird Residences, from Wharf in 1997; they divested both properties in 2007.

GCBs are the most prestigious type of landed housing in Singapore because of the planning constraints imposed by the Urban Redevelopment Authority, which has designated 39 locations in mainland Singapore as GCB Areas.

While GCB prices on the whole fell in 2015, the year saw two record price transactions - both in May. One was the S$91.7 million paid for 35 Ridout Road - which marked the biggest sale ever, on absolute quantum price basis, in a GCB Area. The other was a record psf of land price of S$2,190 psf in a GCB Area 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.

Mr Eyo of Christie's expects GCB prices to ease around 5 per cent this year if interest rates keep going up and the government does not relax the property cooling measures.

Realstar's Mr Wong expects GCB prices to continue trending down in the first half of this year in the absence of any positive stimulus - before stabilising in the second half. "I expect to see a 10 per cent increase in transaction volumes for the whole of 2016 amid a better matching of pricing expectations between buyers and sellers."

Buyers are going for bargain hunting and eyeing "desperate sales" to take advantage of the current buyers' market.

GCB owners, on their part, are either pricing their properties more realistically or switching to renting them out - to ride out the next couple of years.

"Some owners are receptive to having private events with wine/tapas to attract prospective buyers," Mr Wong added.