Buying interest steady for Good Class Bungalows

The number of sales of Good Class Bungalows (GCBs) remains below the level they were at before the Total Debt Servicing Ratio was imposed in mid-2013, but there remains buying interest for this rare type of property.

Developer OUE said on Thursday that it is buying two GCB plots in Nassim Road for $56.58 million.

The price of about $1,652 per sq ft (psf) across both plots was deemed attractive, given the last GCB sale in Nassim Road was for about $2,000 psf in February 2012.

But prices have not fallen significantly, even though another recent sale was at less than $1,000 psf in Victoria Park Close.

Said Newsman Realty managing director K. H. Tan: “Some GCB prices have been high as well. When prices are low, they have their special reasons.”

This is comparable with 19 sites and a total value of $470.99 million sold in the same period last year, according to an analysis by CBRE.Thirty-three of these sites with a total value of $714.78 million were sold last year, up from 28 sites worth $626.14 million in 2014.

The interest in GCBs mirrors the greater interest in prime properties recently, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia.

“People are taking advantage of the slight correction in prices,” he added. “They are looking for opportunities to upgrade to better locations, bigger plots and more prestigious addresses.”

CBRE Research expects 25 to 30 GCBs to be sold this year, given a narrowing price gap between sellers and buyers.

Sellers tend to be Singaporeans looking to move on to the next property, while buyers include new citizens, noted Mr Samuel Eyo, managing director of Singapore Christie’s International Real Estate.

Mr Zhang Yong, founder of a popular steamboat chain, bought a Gallop Road bungalow for $27 million in March, or at $1,700 psf. Newly minted Singaporeans from Indonesia have increasingly been looking around as well, noted Mr Tan.

Some of the GCBs on sale include one in Bukit Tunggal Road, with a price tag of $38 million.

It has a built-up area of about 14,000 sq ft and land size of 20,355 sq ft, said marketing agent Jeffrey Sim, senior vice-president of Edmund Tie & Co Property Network.

He added: “I can’t say the market is back, but I have many potential buyers and some are looking for their second or third GCB.”

The company is also featuring a GCB in Dalvey Estate at its upcoming auction. The indicative price is $30 million for the property, which has a floor area of 12,500 sq ft and is on a 15,211 sq ft site.

Based on caveats lodged and including OUE’s purchase, 19 sites in GCB areas have been sold so far this year, with a total value of $438.17 million.