Sep 10, 2010

Good-class bungalows now pricier

24 out of 75 sold above $20m, with prices rising 20% in a year

By Esther Teo

THE market is booming for good-class bungalows, with prices rocketing to record levels as the growing ranks of the rich fight for a posh address.

Prices have risen more than 20 per cent in a year, with sales being driven by the robust economy and the tight supply of what are the most exclusive homes in the country.

Needless to say, the recent cooling measures are unlikely to have much impact on a market where $20 million seems to be the new norm.

There were 24 bungalows sold above that price out of 75 sales so far this year.

Last year, 21 bungalows out of 109 sales were sold above $20 million, property consultancy CB Richard Ellis (CBRE) said yesterday.

This year, the $20 million level has been surpassed to reach new heights.

In April alone, a series of jaw-dropping prices were set, with 14, Bishopsgate going for $36.3 million; 4, Ewart Park for $39.8 million; and a record $43.53 million for 20B, Nassim Road.

In May, 1, Brizay Park was sold for $35 million.

They helped bring total sales in the first half of the year to about $1.12 billion - about 81 per cent of the total value of last year's transactions.

The priciest bungalow sold last year was at Victoria Park Road. It sold for $38.67 million last October.

Mr Steven Ming, Savills executive director of investment sales and prestige homes, said that prices on a per sq ft (psf) basis have climbed from $835 psf last year to an average of $1,012 psf, a jump of 21.2 per cent.

But some bungalows are attracting prices of up to $1,800 psf.

Mr Alexs Chua, managing director of property agency AC MacGyver, a specialist in landed homes, added: 'More people are becoming millionaires here, so while the demand is increasing, supply has stayed the same...The Singapore economy also grew strongly despite the European debt crisis.'

Experts say that the limited supply of good-class bungalows - there are only about 2,400 in 39 gazetted areas such as Nassim, Dalvey and Tanglin - and Singapore's strong economy were keeping the market buoyant.

The property cooling measures will have 'little or no impact', they add.

While sales volume might slow temporarily as buyers take stock of the new rules, prices are not expected to be affected as most owners view bungalows as a long-term investment and are not in a hurry to sell.

Buyers are also usually cash-rich and rarely borrow more than 60 per cent of the property's price, so the new financing rules are unlikely to affect them.

The managing director of RealStar Premier Property, Mr William Wong, said 80 per cent of the buyers were Singaporeans, with the rest permanent residents (PRs) or PRs who had since acquired citizenship.

Good-class bungalows 'are the creme de la creme of landed property, and with local businesses doing well, some people might want to buy (one) to acquire that status', he said.

Prices on a psf basis were also much lower than a prime condominium, which could go for as much as $3,000 psf, he said.

Typically, only Singapore citizens can own a good-class bungalow, but PRs may get permission to buy small ones with land areas of about 15,000 sq ft.

[email protected]