Slower sales for Good Class Bungalows

Property agents have been reporting a drop in Good Class Bungalow (GCB) sales, as the gap between asking and offer prices widens.

About S$750 million worth of sales have already been closed so far this year, for the residential market’s ultra-elite segment in Singapore. In 2010, a record S$2.3 billion worth of GCB deals were witnessed.

Among the latest transactions in Singapore’s GCB areas is the 21,388 sq ft plot in Leedon Park, which was sold for around S$29.8 million (S$1,395 psf). The buyer is believed to be an experienced Singaporean GCB investor.

In addition, a bungalow on Dalvey Road was sold this month for S$34 million (S$1,688 psf), while a GCB in Binjai Park was sold last month at S$17 million (slightly more than S$1,300 psf).

Raymond Ng Ah Hua, Executive Chairman of Enviro-Hub Holdings, is one of the Singaporeans who acquired a GCB this quarter. He is said to have purchased a 69,546 sq ft property on Yarwood Avenue last April at S$59.5 million (S$856 psf), the largest GCB transaction so far this year.

Douglas Wong, Director of CB Richard Ellis (CBRE), believes that the slower GCB sales this year is partly due to the withdrawal of speculative activity, following the implementation of the hefty seller’s stamp duty (SSD).

He added that the decrease in loan-to-value (LTV) limit to 60 percent for those with an existing mortgage has also affected some GCB buyers owning more than one property.

“However, prices have remained firm as owners have holding power. In fact, their price expectations have kept on going up due to the limited supply of GCBs. As a result, many owners are not willing to sell unless the price is irresistible,” said Wong.

“Also, if they were to sell their GCBs, they know it will be difficult to find replacement GCBs, plus the January cooling measures will apply to any new purchase.”

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