Jan 10, 2010

Top-end bungalows fetching top dollar

100 deals worth $1.6b done last year, with average price soaring to $826 psf

By Joyce Teo

The market for the segment of Singapore's most coveted homes - bungalows on sprawling prime land called good class bungalows (GCBs) - did very well last year, and is expected to remain fairly strong this year as the economy improves.

Average price on a per sq ft basis reached a high of $826 last year, up from $820 in 2008 and $681 in 2007, according to CB Richard Ellis.

The property consultancy's data also showed that a total of 100 GCB deals worth $1.59 billion were done last year, making it the second-highest volume recorded after the 119 deals in 2006.

Despite the weak market, a new record price was set last year when a 25,231 sq ft GCB at upscale Leedon Park near Holland Road was sold in October for $1,407 psf, or $35.5 million overall.

It broke the previous psf record of $1,308 psf for a White House Park GCB sold in August 2007, experts said.

GCBs are special because they are big and, more importantly, exclusive. They typically sit on plots of at least 1,400 sq m, or 15,070 sq ft, in size and can be found only in 39 prime gazetted areas such as Nassim Road.

'The GCB market is typically viewed as a barometer for the residential market,' said property consultancy firm Savills Singapore's director of investment sales and prestige homes, Mr Steven Ming.

'With anticipated economic recovery this year and a market fuelled by liquidity and cheap lending, the GCB market can be expected to remain strong this year.'

Deals may slow a little this year though, but prices are likely to continue to rise, albeit slightly, said CBRE's director of luxury homes, Mr Douglas Wong.

'GCBs are evergreen products. They can withstand stormy weather as proven by the crisis last year. When the market goes down, GCB prices can still hold very well.'

Mr Ming too believes that deals will likely slow this year. Many of those who wanted to buy a GCB would have done so last year, he said.

'Because of the sudden market resurgence last year, buyers went into the market as they were afraid that they would be priced out,' he added.

Demand is still strong but deals in the next three months may slow because sellers are a lot more optimistic than the buyers, explained Newsman Realty managing director K. H. Tan.

GCB owners include well-known chief executive officers, businessmen and celebrities.

China-born gongfu star Jet Li, who has acted in Hollywood movies, bought one in Bukit Timah for nearly $20 million last year after he became a Singapore citizen.

Two new groups of buyers have emerged for GCBs in the past two years, said CBRE's Mr Wong.

He is seeing more young professionals and entrepreneurs in their late 30s buying GCBs to live in.

Another growing pool of buyers comprises new citizens as well as permanent residents who have obtained approval to buy landed homes.

Quite a few China-born new citizens bought GCBs in the past year, experts said.

GCB buyers are typically more savvy and would be the first to react to any market upturn, said Mr Ming.

'If the GCB market were to move, you can expect the rest of the landed market to follow.'

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