Over $500m of Good Class Bungalows sold in Q1: CBRE
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Published April 14, 2010
Over $500m of Good Class Bungalows sold in Q1: CBRE
Its analysis of URA Realis caveats shows that 29 deals are sealed
By KALPANA RASHIWALA
(SINGAPORE) At least $500 million worth of Good Class Bungalows (GCBs) have changed hands in the first three months of this year, according to CB Richard Ellis.
The property consultancy's analysis of URA Realis caveats shows that 29 deals were sealed in Q1 for a total of $470.33 million. In addition, CBRE director (luxury homes) Douglas Wong confirmed that he brokered a $36.3 million transaction last month which has yet to be reflected in the caveats.
Market watchers say that further caveats for deals done in March may be captured over the next few weeks.
The deal brokered by Mr Wong, for 14 Bishopsgate, would also be the biggest in dollar quantum in Q1. The single-storey conservation bungalow is over 50 years old. The land area is 32,405 square feet and the property is being sold by members of the Wong family who once controlled Tien Wah Press.
Market watchers say that transactions are continuing to stream in this month, including a $23 million sale at Victoria Park (land area of 21,190 sq ft) and at Ladyhill Road, $23.5 million (land area of slightly over 16,000 sq ft). However, market watchers generally do not expect a repeat of last year when a record $1.72 billion of GCBs were transacted, as the number of deals this year is expected to dip amid rising prices.
William Wong, managing director of RealStar Premier Property, says: 'Current GCB prices are about 10-20 per cent higher than a year ago, depending on location of the bungalows. Those in prime areas such as Tanglin have gone up as much as 20 per cent.'
Agreeing, CBRE's Mr Wong says that properties in the Jervois/Chatsworth/ Bishopsgate areas fetched about $1,000 psf in the 2007 property boom. 'Today, people are asking $1,200-1,400 psf, and even $1,500 psf.'
A spokesman for FRN Properties says that in places such as King Albert Park and Brizay Park, asking prices are $900-$1,000 psf, compared to $500-$700 psf in the 2007/2008 period.
The price appreciation has created opportunities for flipping. For instance, a property on a 15,450 sq ft plot at Swettenham Road that had sold for $13 million or $841 psf last November changed hands again for $16.3 million or $1,055 psf in February. Then, a bungalow at Queen Astrid Park that had been transacted in August last year for $24 million or $877 psf found a new owner in February for $28.28 million ($1,033 psf).
Among the interesting GCB deals done in Q1 is the $28 million sale of a property at Binjai Park. The bungalow is believed to have been sold by Amtel Group boss Sudhir Gupta to another entrepreneur, Sareen Gajendra Singh, who owns Omni United (S) Pte Ltd. Both are Singapore citizens.
GCB investor Thomas Chan is said to have picked up a property at Queen Astrid Park for about $28.3 million from Zain Fancy, formerly head of Morgan Stanley Real Estate Investing for Asia Pacific. Mr Fancy is believed to have reaped a gross profit of over $4 million.
In January, Audi distributor Premium Automobiles - controlled by Hadi Tanaga - paid $31.5 million or $1,066 psf for 4 Swettenham Road.
Island Hospital founder and Napier Properties director Mark Wee is said to have bought 36 Belmont for $18.73 million.
A property at Dalvey Estate was picked up for $20 million; the buyer is understood to be a banker who is a Singapore PR.
GCBs, with their stringent planning requirements, are the creme de la creme of the housing market, at least on mainland Singapore. There are only about 2,400 such bungalows in 39 gazetted GCB areas.
Property agents cite anecdotal evidence of high net-worth mainland Chinese, Indians and others who have become Singapore PRs/citizens and who are buying GCBs.
Newsman Realty managing director KH Tan notes that local players have also been active in the GCB market. These include those upgrading from smaller homes as well as investors who own several GCBs.
Foreigners need permission from the Land Dealings (Approval) Unit (LDAU) before they can own landed property. On mainland Singapore, the main criteria are that they are Singapore PRs and that they make an adequate economic contribution.
However, non-PR foreigners may buy landed homes on Sentosa Cove subject to LDAU approval.
Whether on the mainland or on Sentosa Cove, the landed home a foreigner is allowed to buy usually must not exceed 15,000 sq ft in land area, although in some instances, property agents say that approval has been granted for PRs to buy GCBs with land areas slightly larger than this if part of the site is 'unusable' - for instance, if there is sloping ground which cannot be built on.
Foreigners may at any one time own just one landed home in Singapore and that too for owner occupation only.
On the mainland, foreigners also have to hold the property for at least three years before they may resell it. There is no minimum holding period for Sentosa Cove.
