Good Class Bungalow market continues to sizzle
Singapore
THE creme de la creme of Singapore's landed housing market remains buoyant.
In the first two months of this year, some S$424 million of deals in Good Class Bungalow (GCB) Areas have been transacted - nearly 40 per cent of the tally for the whole of last year.
Based on URA Realis' caveats data, the number of deals since the start of this year stands at 16, with the latest transaction dated Feb 23.
"The last time that the sales volume in the first two months of the year hit double-digit was in 2011 with 12 deals and prior to that, in 2010, with 18 deals," said List Sotheby's International Realty (List SIR) research director, Han Huan Mei.
"Incidentally, 2010 was the period in which the Singapore economy was recovering from the Global Financial Crisis, aided by the opening of the two integrated resorts," she added.
The final tally of transactions in GCB Areas for the first two months of this year may rise in the coming weeks if more caveats are lodged.
One generally has to be a Singapore citizen to be allowed to acquire a landed property in a GCB Area, although anyone can buy a non-landed private home in Singapore.
Bungalows in the 39 gazetted GCB Areas are the most prestigious form of landed housing in Singapore, with strict planning conditions to preserve their exclusivity and low-rise character.
Among recent transactions is a property in Peirce Road being sold for S$30.88 million or S$1,951 per square foot on a freehold land area of 15,826 sq ft.
An entity controlled by Simon Cheong of SC Global Developments is selling the property. The buyer is understood to be Sabrina Chong, a director of Luxasia and daughter of Luxasia founder Patrick Chong.
This is one of six completed bungalows along Peirce Road which Mr Cheong bought in late 2005 for a total of S$35 million. He has done minor renovations to the properties over the years. Including the latest deal, Mr Cheong has sold four of the six bungalows.
Completed around 2000, the six villas were designed by the renowned architect Ettore Sottsass, a grandee of late 20th century Italian design. Newsman Realty is understood to have brokered the sale of the Peirce Road bungalow.
A property along Old Holland Road is also changing hands for S$28 million or S$1,376 psf on land area of 20,345 sq ft.
On site is an old bungalow that is expected to be redeveloped by the buyer, who is a naturalised Singapore citizen. In late 2019, he sold a substantial stake in a Singapore-incorporated firm in the maritime industry that he founded in 2003.
The property is being sold by two individuals who are exiting at slightly below their S$28.5 million purchase price in 2014. Steve Tay of List SIR acted for the sellers; Newsman Realty represented the buyer.
Business has also been brisk at Realstar Premier, which has so far this year brokered five GCB deals that are reflected in URA Realis caveats data. It has another three deals for which buyers have yet to exercise the options to purchase.
The strong sales momentum in the GCB market continues after ending on a high note in 2020, with 46 deals totalling S$1.09 billion - surpassing 2019's tally of 40 transactions amounting to S$782 million.
Despite a slow first-half amid the emergence of the Covid-19 pandemic which led to Singapore entering a partial lockdown with property viewings disallowed for two and a half months, transactions in the GCB market made a strong comeback in the second half.
Besides pent-up demand and a low interest rate environment, the narrowing price gap has been crucial in sealing GCB deals, said observers.
Around mid-2020, as Singapore was emerging from the "circuit breaker" partial lockdown to contain the spread of Covid-19, some owners began moderating their asking prices.
As sentiment improved in Q3 2020, GCB investors began making offers that were close to or matched sellers' price expectations.
One of the reasons for the continuing strong sales momentum in the GCB market, says Realstar Premier founder William Wong, is the fear of missing out - especially in the competition for prized assets in prime locations - which is resulting in buyers' willingness to match the price that sellers want. Mr Wong says: "The strong momentum will continue for at least second-quarter this year and is likely to extend into the third quarter. But things will probably slow down in the fourth quarter because of the price gap widening gradually.
"Some sellers are beginning to adjust their price upwards or withdraw their properties from the market. Within the next one to two quarters, those which are reasonably priced would have been sold, leaving behind properties which are probably over-priced.
"Also new GCB listings have higher price tags, which makes it more difficult to get buyers."
In similar vein, List SIR executive director Lewis Cha said: "While viewings by potential investors are still ongoing, we are aware that some owners have withdrawn their properties from the market - be it a change of their intention to sell, or their desire to wait for prices to rise further.
"This mismatch between demand and supply may lead to a slowdown in sales activity as well as an upward pressure on prices."
Mr Cha expects about 60 bungalows in GCB Areas to change hands this year, with a price upside of 5 to 10 per cent - barring unforeseen circumstances and/or introduction of any property cooling measures.
Mr Wong sees the sales volume rising above 60 this year. He is sticking to his forecast of a further price rise of 7 per cent this year (following last year's gain of 5-7 per cent) in prime areas such as Cluny, Dalvey, Chatsworth and Tanglin.
"In the not-so-prime areas such as Brizay Park, Old Holland Road, the Binjai and Yarwood areas, prices are likely to rise by another 3-5 per cent in 2021 after going up 2-3 per cent in 2020."
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