GCB market may be entering consolidation phase after stellar run-up

Recent deals include a S$65m sale of a house in Chatsworth Road and an old house in Cluny Hill that is changing hands at S$48m

Oct 08, 2021



AFTER a strong performance so far this year, the Good Class Bungalow (GCB) market may be entering a consolidation phase as the buyer-seller price gap starts to widen, say observers.

Bruce Lye, co-founder of property agency SRI, said: "The buying euphoria in the GCB market seems to have cooled a little. However, owners' asking prices remain firm. The trend we are seeing is that buyers who are in the market are weighing their options and picking up properties that offer them the most value - but even these are still at new benchmark prices for the locale."

Steve Tay, List Sotheby's International Reality (List SIR) senior associate vice-president, said: "Viewing activity is still ongoing, but it's not as heated as during the April to August period. The key reason is sellers have raised their prices; as well, much of the supply has been taken off the market after the earlier strong sales momentum. Owners of the remaining bungalows in GCB Areas (GCBAs) that are still available for sale have raised their price expectations. New listings are fewer than before - and even then at higher prices.

"The market is entering a consolidation phase, with buyers contemplating whether to match sellers' prices."

Tay added that tighter restrictions to contain the surge in Covid cases also limit viewing activity.

List SIR's analysis of URA Realis caveats data downloaded on Oct 6 shows 18 transactions in GCBAs totalling S$526.8 million in the third quarter of 2021 (with the latest deal dated Sep 27). This is lower than the 31 deals totalling S$896.6 million in the second quarter of 2021 but higher than 12 deals totalling S$335.6 million in Q3 2020.

Year to date, the tally stands at 73 transactions adding up to S$2.1 billion. The whole of 2020 saw 46 deals amounting to S$1.1 billion.

Not reflected in the URA data is a bungalow in Chatsworth Road being sold at close to S$65 million or S$3,276 per square foot (psf) on the freehold land area of 19,839 sq ft.

On site is a part one-storey, part two-storey house built about two decades ago. The house, which is currently leased, is on a down slope. It has five ensuite bedrooms and a pool, among other facilities.

Sitting on a rectangular plot of land, the bungalow has a resort-style design although the property looks dated. Observers note that the property has significant redevelopment potential, with an existing built-up area of only about 7,000 sq ft. Assuming the buyer plans to redevelop the property, the S$3,276 psf on land area would be a record for bungalow redevelopment land in the Chatsworth Park GCBA.

Diagonally across the road from the house, two adjoining vacant sites of slightly above 15,000 sq ft each were transacted in April by the family of Stamford Land executive chairman CK Ow for S$2,600 psf. Next to these two plots is an old two-storey house on almost 15,000 sq ft of land for which a deal was entered into at S$1,867 psf in August last year.

That said, the psf price for the latest bungalow deal is in line with current market pricing for a GCB in liveable condition in the Chatsworth locale, say observers. The bungalow is being sold by a Singaporean marine conservationist in her 30s to a naturalised Singapore citizen.

Word in the market is that Realstar Premier brokered the sale, but it has declined to comment.

Bungalows in the 39 gazetted GCBAs are the most prestigious form of landed housing in Singapore, with strict planning conditions to preserve their exclusivity and low-rise character. One generally has to be a Singapore citizen to be allowed to acquire a landed property in a GCBA.

Over in Cluny Hill, an old bungalow a stone's throw from the Singapore Botanic Gardens is changing hands for S$48 million or S$2,665 psf on the land area of 18,010 sq ft.

The buyer is property group Far East Organization; the bungalow is slated for redevelopment. It was sold by former Singapore Cabinet minister Yeo Ning Hong and his wife via an expression of interest exercise that closed in early August.

While some market watchers had expected the property to fetch closer to S$3,000 psf amid the ultra-buoyant sentiment at the time, the transacted price price is nevertheless 80 per cent higher than the S$1,482 psf that the Soh family behind lifestyle developer Meir Homes paid for the next-door plot in 2018. The family is now redeveloping the 14,843 sq ft site into a bungalow. Earlier this year, it inked a deal to sell the bungalow to local technopreneur Tommy Ong for S$63.7 million - or a record S$4,291 psf for a GCB. When completed, the house will have two levels plus a basement and an attic; in all, it will have six bedrooms and a swimming pool.

Seasoned observers say that comparing bungalow prices in GCBAs can be tricky at times as each bungalow is unique, with factors such as the plot shape, whether it is at, above or below the road level, and the gradient of the land among the factors that come into play. More subjective considerations also come into the picture. "The beauty and value of each GCB is in the eye of the beholder," quipped a bungalow owner.

All eyes are now on whether a fresh psf record price will be set for a four-year old bungalow in Jervois Hill owned by the family of Wah Loon Engineering founder Alan Chong.

The house, on 15,094 sq ft of land, was developed by seasoned bungalow investor George Lim. It has two levels and a basement. Its iconic design includes a floating sculptural staircase at the entrance hall. The basement has a large car park for nine to 10 cars in addition to a wine cellar, an aquarium, a home theatre, a gym and a guest bedroom.

The five other bedrooms in the house all have walk-in wardrobes.

The house comes with a lift and has a built-up area of about 12,000 sq ft. Chong paid S$41.2 million for the house around mid-2018, reflecting a then-record price of S$2,729.52 psf on land area.

Prior to his purchase of the property, Chong was in the news earlier the same year (2018) for selling a majority stake in Wah Loon Engineering to Vinci Energies Asia Pacific, a subsidiary of Euronext Paris-listed Vinci. Chong retains a minority stake in Wah Loon Engineering and remains its managing director.

He also owns shophouses in Keong Saik Road, Boat Quay and Geylang. He and his daughter, Eileen, have ventured into the F&B business, opening two Japanese restaurants - Kyoten along Yong Siak Street in the Tiong Bahru area and Kei Hachi in Keong Saik Road. Chong bought a majority stake in Leung Sang Hong Kong Pastries earlier this year and has relaunched the brand with a new flagship outlet in Bugis Village.