Published November 01, 2013

Good Class Bungalow market starts to thaw

Options said to have been granted for sale of at least 2 properties recently

By Kalpana Rashiwala [email protected]

Changing hands: The sale of the Gallop Park bungalow for $25.2 million translates to $1,574 psf on its land area of about 16,010 sq ft

THE Good Class Bungalow (GCB) market appears to be thawing after a quiet period following the introduction of the Total Debt Servicing Ratio framework in late-June.

Options are said to have been granted for the sale of at least two properties recently in Gallop Park and Dalvey Road.

A Singaporean in the banking and finance industry is understood to be selling his Gallop Park bungalow for $25.2 million, translating to $1,574 per square foot (psf) on its land area of about 16,010 sq ft. On site is a two-storey freehold property with approximately 7,000 sq ft built-up area; it has six bedrooms and a swimming pool. The property is believed to have been renovated a few years ago. Newsman Realty brokered the sale.

The latest transaction would mark the fifth time the property is changing hands in the past seven years; the earlier transactions were at about $7.5 million in March 2006, $12.3 million in July 2007, $13.1 million in September 2008 and the December 2010 sale at $21 million to the current owner.

BT understands that the Dalvey Road transaction is at $33 million, or close to $2,190 psf on land area of 15,081 sq ft.

The freehold bungalow, with a built-up area of about 8,600 sq ft, is part of The Glencaird Residences collection developed by a unit of Wharf Holdings. In the latest transaction, the seller is believed to be a company linked to Singaporeans currently residing in Hong Kong. It is thought to have bought the property in April 1997 from Wharf for nearly $13.9 million.

The bungalow was completed in 1999.

Separately, at Mount Echo Park (in the Chatsworth Park GCB Area), an old bungalow with a freehold land area of 15,116 sq ft has been put up for sale at an indicative price of around $26.8 million or $1,773 psf.

On site is a two-storey property believed to have been built around 26 years ago. Its owner is a retired Singaporean who has emigrated overseas.

The five-bedroom bungalow has a built-up area of about 6,000 sq ft. It has a swimming pool and landscaped garden at the rear. "The new owner will have a few options. One, he could do an ID (interior design) job costing maybe $300,000-400,000. Two, he could do major A&A (additions and alterations) works to increase the built-up area to around 8,000-9,000 sq ft; this could possibly cost $1-2 million. Or three, he could completely tear down the existing bungalow and redevelop the site," said KH Tan, managing director of Newsman Realty, which is handling the tender for the property closing on Nov 15. "The property sits on a flat, rectangular site in a quiet area."

Commenting on the state of the market, Mr Tan revealed that he has in hand about a dozen potential buyers looking for a GCB for their own residence.

Most are hoping to sell their existing homes - which could be a smaller bungalow or even apartment - and looking to enter into an agreement to buy a GCB with a longer-than-usual option exercise period.

Market watchers say this is to give them enough time to sell their existing home to avoid being slapped with a high additional buyer's stamp duty (ABSD) rate on their GCB purchase as well as to settle the loan on their existing property so that they may qualify for the loan amount they will need to buy their new bungalow.

Under the Total Debt Servicing Ratio framework, banks granting property loans to individuals have to ensure that a borrower's monthly total debt repayments do not exceed 60 per cent of his gross monthly income.

And, under the January 2013 property cooling package, Singaporeans have to pay 7 per cent ABSD on their second residential property purchase here, with the rate increasing to 10 per cent ABSD on the third and subsequent purchase.

"The GCB market has been soft for the past few months but I think prices will start to rise again in Q3 next year," Mr Tan predicted.