Published November 16, 2006

Record spending by S'poreans on good class bungalows this year

75 properties snapped up for $752m in 9 months


THE local rich spent a record $752 million on 75 good class bungalows (GCBs) in the first nine months of this year, exceeding the $733 million they forked out in the whole of last year, according to a report by Knight Frank.

The property company's analysis of caveats lodged also shows $281.1 million of GCB transactions were recorded in the third quarter of this year - a 43.3 per cent surge from Q2.

The number of GCBs sold also grew in Q3 - to match the record 28 transactions in Q4 2005. The 28 sales in Q3 represented a 27.3 per cent increase quarter on quarter and 33.3 per cent increase year on year.

Whereas the high-end condominium market is being driven by foreigners, Knight Frank's director of research and consultancy Nicholas Mak says most GCB buyers are Singapore's own, 'rich, famous and powerful'. A few permanent residents may have bought GCBs, but they are allowed only one, and only with official approval, he noted.

Mr Mak said that although most GCBs are bought as long-term investments, prices have been rising faster than rents. Average transacted prices in the past four quarters have risen 20 per cent year on year to $481 per square foot (psf) of land area. Q3 prices surged 29.7 per cent year on year to $429 psf. In prime areas like Nassim and Tanglin, prices have hit $600-$630 psf.

Rents, however, have increased 10-20 per cent on average, Mr Mak said. For prime GCBs in the Nassim and Tanglin areas, rents can be $25,000-$30,000 a month.

Knight Frank believes GCB prices could climb a further 10-15 per cent, though Mr Mak reckons strong demand and prices are a result of some 'profit-taking'.

Of the 91 GCBs sold between Q4 2005 and Q3 2006, 12 are known to have been bought and sold within that 12-month period, with an average price increase of about 30 per cent. The biggest increases were for GCBs in Peirce Road (108.8 per cent) and Fourth Avenue (45.1 per cent).