July 2, 2007

Luxury bungalows enjoy strong demand in buoyant market

Average asking prices now close to $1,000 psf on the back of rising land values, larger plots

By Joyce Teo, Property Correspondent

DEMAND for prime bungalows is still high and prices show no sign of easing either - no surprise given the property market's resurgence.

So far this year, 47 deals for good class bungalows have been done to the tune of $560 million, said CBRE Research.

This compares with 55 deals worth $564 million completed in the same period last year.

Good class bungalows are defined as those on at least 15,000 sq ft of land in 39 designated areas.

Asking prices for bungalows in coveted areas such as Nassim Road, Dalvey Estate, White House Park and Cluny Park now average $900 per sq ft (psf) to $1,000 psf, said Mr Douglas Wong, who heads PropNex Grandeur Homes.

This is up from transacted prices of $400 psf to $450 psf three years ago when the market for good class bungalows showed its first signs of recovery, he said.

Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said asking prices for Nassim Road have crept up to about $1,200 psf.

Average total prices for good class bungalow deals this year have crossed the $12 million mark, compared with last year's average of $10.8 million and the 2005 average of $8.5 million, he said.

A bungalow on 15,075 sq ft in next door Dalvey Estate in district 10 was sold for $1,091 psf of land area in March. This brought the average price of done deals in the area to $898 psf this year.

It represents an 83 per cent rise from the average price of $501 psf recorded for five deals done last year, said CB Richard Ellis Research (CBRE Research).

Another Dalvey Road bungalow with a land area of 20,139 sq ft was sold in April for $14.2 million, up 63 per cent from the $8.7 million price that the seller paid last February, it said.

The Binjai Park area in district 21, near Bukit Timah Road, has also seen a significant price increase this year.

Three deals worth an average of $666 psf have been done compared with an average of $363 psf for three sales last year.

Higher-priced deals are being recorded because of rising land values, larger plots being sold and newer houses on those plots, said Savills Singapore's Mr Ku.

Some owners who had bought a few years ago rebuilt or renovated their homes before putting the properties back on the market at higher prices, he said.

The prime bungalow market had a record year last year with 119 deals worth $1.23 billion.

But it cannot be compared with the condominium market as it is largely restricted to local buyers, consultants said.

Foreigners have to be permanent residents and apply for special approval to buy landed homes on mainland Singapore, with Sentosa Cove being the only location where non-PR foreigners can purchase landed property.

Foreigners are further restricted to landed properties with a land area of no more than 15,000 sq ft.

CBRE Research said good class bungalow sales this year would be similar in value to those of last year, but the number of sales may not be as high as the 119 recorded last year.

'That is because sellers' expectations are now much higher than before, given the very positive outlook,' it said.

Nevertheless, where value is concerned, there is still room to move up, said Mr Wong, who predicts a 5 per cent to 10 per cent rise in bungalow prices for the rest of the year.

Prices could move even higher next year given that 99-year leasehold Sentosa Cove bungalow plots have sold for higher prices than good class bungalow plots.

'Good class bungalows are a unique product. There are only 2,500 units in Singapore and all are freehold,' said Mr Wong.

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