Record price set for Sentosa Cove bungalow; GCB in Cluny Hill goes for $1,841 psf but overall volumes dip
Published September 25, 2010
By KALPANA RASHIWALA
THOSE looking to buy the most luxurious bungalows in Singapore may not have turned up in huge numbers this past quarter, but they have signed under impressive figures on their cheque-books.
Another record price has been set on Sentosa Cove. This time a prime seafronting bungalow along Ocean Drive on a 7,690 sq ft plot area has been sold for $2,536 per square foot (psf) on land area. This surpassed the earlier record of $2,403 psf posted just in May this year for a bungalow on Paradise Island; however that property has a bigger land area of about 14,983 sq ft resulting in a much higher absolute price of $36 million.
The latest deal, which took place last month, amounted to $19.5 million. The bungalow is near The Coast at Sentosa Cove condo. Its buyer is understood to be Indian citizen Dalip Kumar Seth, the boss of Sunrise & Co Pte Ltd, a sporting goods wholesaler/distributor which represents the Yonex and Mikasa brands. He is a Singapore permanent resident.
On the mainland too, the Good Class Bungalow (GCB) market saw a near-record price last month.
A house at Cluny Hill was sold for $28 million or $1,841 psf based on its land area of 15,210 psf. On a psf basis, this is believed to be the second highest price ever achieved in the GCB market, surpased only by the $1,899 psf that was recorded in 2007 for 32H Nassim Road. However, that was for a smaller land area of 13,423 sq ft.
GCBs are an exclusive housing form on mainland Singapore governed by stringent planning requirements. There are only about 2,400 such bungalows in Singapore's 39 gazetted GCB Areas. Typically the minimum land area of a GCB is 1,400 sq metres (15,069 sq ft).
However, when GCB Areas were gazetted in 1980, there were some existing sites within these areas smaller than 1,400 sq m. They are still considered GCBs due their surrounding environment and are bound by the other planning requirements for GCBs such as a maximum two-storey height.
Market watchers note that the $1,841 psf for the latest deal at Cluny Hill surpasses the $1,800 psf which a GCB at Nassim Road sold for in April this year. That property is on 24,187 sq ft land area, reflecting an absolute price of $43.53 million.
Among the other major GCB deals in Q3 are a $21 million (about $1,300 psf) deal at Swettenham Green; the buyer is understood to be plastic surgeon Woffles Wu.
There was a also a transaction at Chatsworth Road for $25 million or $1,499 psf. The seller is understood to be Pacific Asset Management's managing director and chief investment officer Ho Tian Yee.
CB Richard Ellis' analysis shows that the average price for GCBs sold so far this year is $1,050 psf, about 26 per cent higher than the $831 psf for GCB transactions for the whole of 2009.
Rising prices have widened the gap in expectations between buyers and sellers and slowed down demand this quarter, say some industry players like CB Richard Ellis director (luxury homes) Douglas Wong.
Based on the property consultancy's analysis of URA Realis caveats captured upto Sept 23, a total 16 GCB deals have been done this quarter for a total $253.4 million - down from 36 transactions for $777.7 million in Q2 and 31 deals at $516.2 million in Q1.
The final number for Q3 may be higher since the quarter is not over and more caveats may be filed over the next few weeks.
Despite the weaker volume this quarter, the 83 deals clinched year-to-date have a total sale value of nearly $1.55 billion - just 10 per cent shy of the record $1.72 billion for the whole of last year, when there were 109 deals. CBRE believes the market is on track to achieving about 100-120 GCB transactions amounting to $1.8 billion for full-year 2010.
'Demand for GCBs has slowed in the third quarter primarily because the price expectations between owners and buyers have widened. On one hand, owners can afford to hold as they're not in a hurry to sell; on the other, buyers can afford to purchase but are not prepared to pay what the owners are asking,' says Mr Wong.
This trend had set in even before the government announced measures to cool the property market on August 30 and had no direct impact on the GCB market, he reckons.
Agreeing, RealStar Premier Property managing director William Wong says: 'Reducing the maximum loan-to-valuation from 80 per cent to 70 per cent (for those already servicing existing mortgages) doesn't affect buyers in this segment as most would borrow around 50-70 per cent - if they borrow at all.'
Another cooling measure - extending the 3 per cent sellers' stamp duty to the sale of properties within three years of purchase - also will only have a marginal impact as most bungalow buyers purchase with a mid- to long-term perspective, he adds. 'Right now we're facing another stand-off phase which usually happens whenever there's a new announcement.
'Some bungalow buyers are waiting and hoping to see a drop in price but most sellers are not reducing. Instead quite a number have actually revised their prices upwards lately in view of the buoyant economy, coupled with a better-than-expected stockmarket performance,' Mr Wong says.
This price gap will probably mean fewer transactions in the next two to three months, he reckons. Giving a similar take, CBRE's Mr Wong predicts relatively slow sales until perhaps early next year, by which time pent-up demand would have built up. 'That's when we're likely to see an increase in GCB transactions again.'
Source: http://www.businesstimes.com.sg
