SINGAPORE - Good class bungalows (GCBs) may be the most prestigious segment of landed property in Singapore but the market is still lukewarm.
This contrasts with another posh landed segment, Sentosa Cove. Sales at the waterfront area have gone up to seven this year, compared with just four for the same period last year.
A caveat was lodged on June 12 for the largest GCB sold this year but overall, the number of bungalows with a minimum plot size of 1,400 sq m - the technical definition of a GCB development- sold in the first half of this year was 10, down from the 11 sold in the same period last year, according to caveats filed.
The latest GCB sold was a $46 million bungalow in Queen Astrid Park, on a 29,709 sq ft site, reportedly purchased by the family who controls oil trading group Hin Leong.
The Urban Redevelopment Authority designates "good class bungalow areas", including plots of land in districts 10, 11 and 20 which are areas in Bukit Timah and Caldecott Hill, and "GCB development".
The URA sets planning conditions to preserve GCBs' exclusivity and low-rise character. Only Singapore citizens are allowed to buy landed residential properties in GCB areas under a policy change that took effect in the second half of 2012.
But smaller bungalows in these areas are proving more popular.
According to CBRE's analysis of caveats filed with URA, 20 sales have been made in GCB areas so far this year with values totalling $432.2 million. These include properties which have a plot size of less than 1,400 sq m.
This is much higher than the 14 transactions which took place in the same period last year, totalling $298.36 million.
Mr Douglas Wong, CBRE Realty Associates' head of luxury homes, said that the market this year has been driven by "multiple small sized deals".
He said that the profile of buyers remain consistent, including corporates and entrepreneurs in their 40s, with interest from new citizens, particularly those originally from China.
However,he did not expect this year's sales to top that of last year's total of 37 transactions.
"We expect 30 to 35 GCB transactions this year as sellers are more motivated to preserve capital and wait for market sentiment to improve. Prices are likely to be flat," he said.
Mr Alan Cheong, senior director of research and consultancy at Savills, said the GCB transactions this year were of a lower dollar per square foot basis, reflecting poorer location, and or site characteristics.
"What is holding the market back is that the 'creme de la creme' sites are still hard to come by with owners either refusing to sell at all cost or at exorbitant prices," he said.
"Therefore, what gets transacted will be for GCBs that are in the normal rather than the superior grade in terms of location and land dimensions."
According to Savills' analysis, average per square foot prices for the year to date is $1,201, 9 per cent less compared with last year,
He added that while transacted prices may be below last year's, it does not imply that there is any intrinsic decline in the value of the GCBs, but reflects the types of GCBs which have been sold.