Despite softer prices, the Good Class Bungalow (GCB) market recorded 34 transactions in 2015 totalling $730 million, up from the 28 deals amounting to $626 million in the year before, reported The Business Times.
GCBs are considered the most prestigious type of landed housing in Singapore due to the planning constraints imposed by the Urban Redevelopment Authority (URA), which has designated 39 locations in mainland Singapore as GCB Areas.
The latest figure is the market’s best showing since 2012, when 54 GCBs were transacted for $1.17 billion.
William Wong, Managing Director at Realstar Premier Group, believes GCB prices fell by 10 to 15 percent last year.
“A good GCB in a location such as Dalvey/Holland which used to be able to sell at $30-32 million a year ago will probably be able to fetch $25-27 million at best now.”
The price drop is generally due to weaker economic sentiment globally and in Singapore, he said.
“Also owners are more realistic in their pricing especially for those who have not been able to find a buyer after putting their property in the market for more than a year. Coupled with the fact that there are quite a few GCBs transacted below $20 million, this has somehow brought the overall asking prices of GCBs a notch down,” he added.
Samuel Eyo, Managing Director of Singapore Christie’s International Real Estate, also acknowledged that prices fell by about 10 percent last year. Aside from deteriorating economic sentiment, he attributed the price drop to higher interest rates.
Although GCB prices declined in 2015, the year witnessed two record price transactions – the $91.7 million paid for 35 Ridout Road, or the biggest sale recorded on absolute quantum price basis within a GCB area, and the $33 million sale of a three-year-old bungalow in Bishopsgate, which marked a record psf land price at $2,190 psf within a GCB Area.
Looking ahead, Eyo expects GCB prices to dip by around five percent this year if the government does not ease the property cooling measures and interest rates continue to rise.
Wong, on the other hand, expects GCB prices to continue falling in the first half of 2016 in the absence of any positive stimulus – prior to stabilising in the second half.
“I expect to see a 10 percent increase in transaction volumes for the whole of 2016 amid a better matching of pricing expectations between buyers and sellers.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
