FORMER Singapore Land chairman SP Tao has sold a Good Class Bungalow (GCB) on Belmont Road for S$33.5 million or S$1,266 per square foot of land area of 26,456 sq ft. As recently as a year ago, the asking price for the freehold property was around S$50 million.
BT understands that earlier this year, the price tag was lowered to S$39 million before last month’s transaction at S$33.5 million. The existing property on the site was re-built in 2009 and comprises two levels and an attic. The main house is said to have five en suite bedrooms in addition to several function rooms; while a pool, entertainment room for guests and a maid’s room are located in the annexe.
Mr Tao, a near centenarian, redeveloped the bungalow five years ago. He is now said to have a Singapore residence in a prime-district apartment.
Agents told BT that while transacted prices of GCBs generally have softened, additional reasons for the relatively low psf price fetched for Mr Tao’s property could be due to it being located on a downslope, having a small car parking area and a layout that may not appeal to some buyers.
It would not be surprising if the new owner redevelops the property, said market watchers.
Savills Singapore director of prestige homes Samuel Eyo estimates that current market values along Belmont Road are in the S$1,300-1,400 psf range for properties on a downslope and around S$1,500-1,600 psf for upslope properties.
In January this year, Enviro-Hub Holdings boss Raymond Ng disposed of a downslope GCB on Belmont Road for S$30.5 million or S$1,392 psf on land area of about 21,900 sq ft. In July last year, an upslope property along the road was sold for S$22.88 million or S$1,525 psf by seasoned investor Thomas Chan. Each site has an existing bungalow on it.
Also noteworthy is the August 2013 sale of a 21,388 sq ft vacant piece of flat land in Leedon Park nearby for S$1,724 psf, amounting to S$36.88 million.
The Leedon Park area still holds the record psf price for GCBs. This was set in October 2012, when bungalow investor George Lim achieved S$2,110 psf when he sold a newly-built bungalow. Standing on 15,640 sq ft of land, the bungalow spans two storeys and a basement. It has six bedrooms and a pool. The property, which Mr Lim completed building in 2011, obtained Building and Construction Authority’s Greenmark Gold Plus award.
Including Mr Tao’s recent sale of his Belmont property, the tally of deals so far this year in GCB Areas stands at 21 transactions totalling S$503 million. For the whole of last year, there were 29 deals amounting to S$682 million.
Realstar Premier Group CEO William Wong said: “Prices of some GCBs have come down slightly over the past few months and those properties that are reasonably priced then tend to attract buyers. There is still a price-gap between buyers and sellers, but the difference is getting smaller and will continue to be so till end of the year.
“Some sellers’ pricing is realistic, but buyers tend to give lowball offers hoping to secure a bargain. It’s a buyer’s market now.”
A pick-up in transactions is expected in the fourth quarter, with the momentum likely to continue next year. “Owners of GCBs that have been in the market for a long while may have to adjust pricing downwards if they wish to seal a deal. There are still many buyers in the market; the only thing is most are waiting for prices to drop further.”
Mr Eyo said that most owners have the ability to hold as those who bought in the past few years are owner occupiers, while those who bought for investment in earlier years are generally not in a hurry to sell given their low entry cost and the low interest environment. “Buyers looking for a GCB on an upslope or flat land and a regular-shaped site have to be prepared to pay a premium as the supply of such bungalows is not high”.
GCBs are the most prestigious type of landed housing in Singapore, with strict planning constraints.