Published December 8, 2006

Bungalow sales could exceed $1b in 2006: Savills


SAVILLS Singapore predicts that there could be more than a record $1 billion worth of Good Class Bungalow (GCB) transactions this year, up 18 per cent from the $845 million for the whole of 2005.

Prime property: Savills says that in the next two years the average GCB land price could rise from the present $500-$600 psf to about $800 psf

The property consultancy says that in the next two years the average GCB land price could rise from the present $500-$600 per square foot (psf) to about $800 psf.

Savills director (prestige homes) Steven Ming sees the average GCB land price in prime locations like Nassim, Cluny and Chatsworth rising from about $700 psf to about $1,000 psf over the same time frame. This is in line with Savills' prediction last month that super-luxury condo prices could pass $4,000 psf by 2010.

'Healthy demand, coupled with limited supply and the exclusive lifestyle offered by the GCB market, is likely to encourage prices to move up further,' Savills said in a report yesterday.

Between January and October this year, a total of 94 GCB deals (including GCB land sales) were registered.

While this is still fewer than the 104 deals recorded for the whole of last year, the total transaction value of $985 million in the 10 months has already surpassed the $845 million achieved for the whole of last year, Savills noted.

The average transacted value of a GCB has risen from around $8 million in 2005 to about $10 million in 2006, and Mr Ming predicts the figure will cross the $11 million level next year.

Savills attributes this year's strong price gain to rapid wealth creation, the Singapore growth story and improved market confidence as well as new buyers.

'A GCB has largely been the trophy home of Singaporeans because of prevailing restrictions preventing foreigners from buying them.

'Increasingly, we are hearing that more permanent residents are receiving approvals to buy GCBs, although this group of buyers forms only a small fraction of all GCB transactions.'