GCB deals down in Q3

NINE bungalows in Good Class Bungalow (GCB) areas were transacted at a total of nearly S$177 million in the third quarter, down from 11 deals worth S$282 million in the second.

The Q3 showing was, however, ahead of the seven deals that closed for a total S$167 million in the third quarter of last year.

In the first nine months of this year, the GCB sale tally was 24 deals totalling S$554 million, slightly ahead of the 22 transactions worth S$511 million in the corresponding year-ago period.

Among the deals entered into in Q3 2015 was that for a freehold bungalow in Tanglin Hill that went for S$25 million; the price works out to S$1,539 per square foot (psf) on 16,243 sq ft of land area.

Mapletree Investments chief executive officer Hiew Yoon Khong, the winner of the Outstanding CEO of the Year award at this year’s Singapore Business Awards, is buying the property from a low-profile property development company, a caveats search showed.

The property was previously transacted for S$10 million in 2006.

Singapore Christie’s International Real Estate managing director Samuel Eyo described the recent S$1,539 psf price for the property as “very reasonable” for the location, taking into account that the new owner is likely to rebuild the house.

“Assuming it will cost about S$500 psf on gross floor area of about 10,000 sq ft to build a new home, the break-even cost will amount to close to S$2,000 psf on land area,” said Mr Eyo.

Tanglin Hill is a popular GCB location because of its proximity to Orchard Road, he noted.

Data from URA Realis shows that there has been a general pick up in landed property deals.

DTZ’s analysis of URA Realis data shows that 326 landed homes changed hands in Q3 2015, up from 304 in Q2, and 246 transactions in Q3 2014.

In the first nine months of this year, the value of landed residential properties sold reached S$3.54 billion, up from S$3.07 billion in the same period last year. However, the latest figure is still shy of the S$5 billion transacted in the first nine months of 2013.

Lee Nai Jia, regional head for South-east Asia at DTZ, said:

“Demand for landed homes has increased as buyers find the current prices attractive enough. Most of the buyers are purchasing for owner occupation for their children or for multi-generational family living. Additionally, the limited stock for landed properties makes them an appealing asset to investors for capital appreciation.”

Besides owner occupiers and investors, developers have also been on the prowl for old houses to redevelop.

Last month, Roxy-Pacific inked a deal to buy an old bungalow sitting on 19,474 sq ft freehold site along Sea Avenue near Marine Parade. Roxy’s executive chairman Teo Hong Lim said the group plans to redevelop the site into a five-storey apartment project with about 25 units; the site is zoned for residential use with a 1.4 plot ratio (ratio of maximum gross floor area to land area) under the 2014 Master Plan.

The purchase price works out to S$789 per square foot per plot ratio.

“It is hard to find landed housing sites for redevelopment these days, partly because the government has increased the minimum plot size for apartment development to 1,000 sq metres (10,764 sq ft). Moreover, most of the big bungalows which can be redeveloped into apartments under the Master Plan have already been redeveloped.”

Expectations of owners are are also still ahead of the market, Mr Teo added.

For instance, in the Telok Kurau area, owners would be looking at about S$1,000 psf on land area, or S$700-plus psf ppr, which would translate to a breakeven of more than S$1,000 psf, he said.

Earlier this month, boutique property group Pinnacle Assets picked up an old freehold bungalow at 3, East Coast Avenue for S$46.38 million, or S$1,025 psf on the 45,249 sq ft land area.

The site is zoned for three-storey mixed landed housing and large enough for potential redevelopment into 14 to 18 conventional landed housing units, comprising a mix of terrace and semi-detached houses.

Ian Loh, executive director of investment and capital markets at Knight Frank who brokered the transaction said: “While such big plots for landed housing development are relatively rare, one can still find pockets of smaller plots with an old house on it that can be redeveloped into two to three new homes.”


More landed homes sold amidst price drops

MORE landed homes are being sold now that prices have fallen significantly from their 2013 peak.

From the start of this year to April 30, 316 landed homes changed hands, a 15.3 per cent jump year on year, going by caveats lodged.

Experts said prices have come down to attractive levels and are unlikely to fall much further.

Prices of landed properties were down 7.2 per cent in the first quarter, from their peak in the third quarter of 2013.

“Supply of landed properties in prime areas is limited, and buyers may be trying to get some good deals as developers may have to sell to avoid Qualifying Certificate penalties,” said Mr Samuel Eyo, managing director of Singapore Christie’s Homes.

Another factor driving sales is that developers and buyers are anticipating the Additional Buyer’s Stamp Duty (ABSD) for second-time buyers will be tweaked – at the latest, by the end of the year – said Realstar Premier Group managing director William Wong.

Many developers are buying sites for redevelopment – typically old bungalows to be torn down and rebuilt – with the expectation that demand will have returned once the houses are ready.

These include sites at Robin Road, Hillcrest Road and Oriole Crescent.

Sales by Realstar, which specialises in bungalows, have nearly returned to levels last seen two to three years ago, when Realstar was doing about 20 deals a month. This number fell by over 50 per cent during the last two years.

Mr Wong said: “This year should be a good year for the landed housing market.”

More viewings and negotiations are occurring in the Good Class Bungalow market as well, said Mr Douglas Wong, CBRE head of luxury homes.

This includes interest from newly-minted citizens.

A furnished bungalow in Bishopsgate sold at a record $2,190 per sq ft last month, or $33 million, to a China-born Singapore citizen.