Edge Property reported in an exclusive yesterday that a Good Class Bungalow on Nassim Road, set a new price record by being sold for $230 million. The report added that the sale set “a new record in terms of absolute transacted price, (and at) 84,544 sq ft, it’s one of the largest freehold GCB plots on Nassim Road that remain intact today.”
The Good Class Bungalow belonging to local property tycoon and chairman of Wing Tai Holdings, Cheng Wai Keung, is believed to be bought by a Singapore-owned trust, SG Casa.
The same property came to the market for sale in 2013 with an asking price of $300 million. The 85,000 square-foot property located near the Botanic Gardens includes a swimming pool, a tennis court and a two-storey home.
While land parcels within Good Class Bungalow areas are required to have a minimum plot size of 1,400 sqm, land plots that are smaller than that are still considered GCBs as long as they are located within the 39 gazetted GCB areas. There are only an estimated 2,800 GCB plots island-wide.
Propertyguru reported that “Property agents, however, believe that the record may have been broken by British billionaire, James Dyson, who recently acquired a bungalow along Cluny Road. The bungalow faces the Singapore Botanic Gardens and has a land area of around 15,100 sq ft.”
Due to its limited supply and the prestige associated with these large bungalow plots, a Good Class Bungalow is often sought after by well-heeled Singaporeans.
“Prices of GCBs have been on a steady increase since 2016. Last year in 2017, some 45 GCBs were transacted at an average price of $21 million per bungalow plot. To date, there have been about 19 recorded transactions of GCBs within the first 5 months of this year, with the prices averaging at $25 million each – a significant increase of 19 per cent from last year’s average,” said Mr Karamjit Singh, Senior Consultant at JLL.
“At $16 million for the land, this offering is an attractive price for buyers looking to enter the GCB market,” Mr Singh added.
2017 was a bumper year for GCB and with the sales of a few of these luxury properties sold in the first few months of this year, it certainly looks like the good run is all set to continue into the next. Based on caveat records from the Urban Redevelopment Authority’s Real Estate Information System (URA REALIS), 37 GCB sales were transactions in the year 2016 with a total value of $789 million. In 2017, 41 GCB with a cumulative value of $867 million changed hands.
JLL Reasearch said in February 2018 that they expected Good Class Bungalow segment to remain sought after, but cautioned however that pricing and the available stock for sale will remain key considerations for buyers.
Under a policy change that took effect in the second half of 2012, only Singapore citizens are allowed to buy landed residential properties within Good Class Bungalow areas.
The Urban Redevelopment Authority (URA) has gazetted 39 GCB areas, which are the pinnacle of Singapore’s landed housing segment. The URA has stipulated strict planning conditions for GCB to preserve their exclusivity and low-rise character. URA also requires GCB to have a minimal plot size of 1,400 sq m or 15,069 sq ft – but those with land plots smaller than the stipulated size when the 39 GCB areas were gazetted in 1980 are still classified as as such.
The JLL Research further noted that the buyer pool for GCB was small and that new citizens who were originally from China, were prominent buyers of such exclusive property.
Besides the new citizens, buyers of GCB also comprised of Singapore corporates, ultra-high-net-worth Singaporean families and Singaporean entrepreneurs in their 40s. Coveted address, prestige, exclusivity, wealth-preservation quality and measure of their financial success, were all reasons for such buyers to seek GCB.
Many high net-worth individuals who became Singapore citizens around a year ago believe that the time is ripe to invest in GCB. This positive sentiment about the GCB is driven by the buoyant private residential market. The many prominent en bloc sales since the middle of 2017, has also contributed to the positive market sentiments.
Despite the restricted demand pool, prospective sellers are expected to raise or be firmer on their price expectations in 2018, said JLL. This is because sellers are mindful that GCB will further enhance the wealth preservation quality for the buyers.
But the prices of GCB are expected to be tempered by Additional Buyers’ Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR) requirements.
Mr Paul Ho, chief mortgage consultant of icompareloan.com, believes that the price of GCB will rise in tandem with the generally positive sentiments surrounding real estate in Singapore.
“As the sales proceeds start to come in from the en bloc sales completion from now till 2019, landed properties will hot up,” Mr Ho said.
Mr Ho added that buyers of Good Class Bungalows stand to potentially save tens (if not hundreds) of thousands of dollars if they engage the services of a mortgage broker for their purchase of the high end property.
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