Good class bungalows soar in price

Source : Straits Times – 20 Jul 2010

Sales in first half pass $1b mark, and demand unlikely to flag: Report

THE priciest homes just keep getting pricier, with the values of upmarket, prime-area bungalows rocketing this year, and sales totalling more than $1 billion in the first six months.

And just to underline the boom in what are called ‘good class bungalows’, a Nassim Road house sold in April for $43.5 million, that is $1,800 psf and just shy of the record $1,899 psf set in 2007 for a plot along the same road, according to a Savills Singapore report.

The most expensive bungalow sold this year in terms of overall price was a sprawling Leedon Park plot that went last month for a whopping $59.4 million, or $1,419 psf.

Good class bungalows tend to be big and exclusive, and are arguably Singapore’s most coveted landed homes.

They typically sit on plots of at least 1,400 sq m, or 15,070 sq ft, and can be found in 39 prime gazetted areas such as Nassim Road.

In the first half of this year, sales of good class bungalows reached about $1.12 billion, which is about 81 per cent of the value done last year, said Savills.

There were 54 deals done in the first six months, compared with 24 in the same period last year, it said.

Prices have continued edging higher on the revived demand from well-heeled buyers, added Savills.

The average price of good class bungalows rose from $928 psf in the first quarter to $1,082 psf in the second and is now 36 per cent higher than a year ago.

‘This year we are seeing more demand from ultra-rich, new citizens and PRs in the market, which could possibly have resulted in the higher volume and prices,’ said the firm’s director of prestige homes and investment, Mr Steven Ming.

An agent who declined to be named added: ‘Some new citizens from China are still looking for good class bungalows.’

He said the market has quietened down a bit recently as the gap between buyers’ and sellers’ price expectations widens.

CB Richard Ellis director (luxury homes) Douglas Wong said: ‘Good class bungalow prices have continued to rise since 2007 and through the global financial crisis. Owners’ expectations are still high due to the limited supply.’

Some sellers have been asking for higher prices after hearing talk of a Cluny Road bungalow achieving a record price of slightly over $2,000 psf, agents said.

Buyers may be sitting on the sidelines but they are likely to come back to market soon when they realise that prices are not going to fall, Mr Wong said.

The managing director of RealStar Premier Property, Mr William Wong, said he has already seen some local investors returning to the good class bungalow market recently.

But foreign buyers are few and far between. They need special permission and must be permanent residents to own landed property.

Foreigners who are not permanent residents can buy landed homes in Sentosa Cove, subject to government approval.

In recent years, the typically smaller landed homes in the 99-year leasehold gated residential enclave have also seen exceptional prices.

Average prices of Sentosa Cove bungalows rose 55 per cent to $1,959 psf in the second quarter over the same period a year ago, said Savills.

In the first half, there were 35 caveats lodged for bungalows in Sentosa Cove compared with 36 for all of last year, it said.

Just over half of this year’s bungalow caveats were lodged by Singaporeans.

China accounted for 10 deals, the largest of the foreign buying contingent.

But Mr Ming said that good class bungalow prices are looking more attractive than the prices of leasehold Sentosa Cove bungalows.

He added that good class bungalow prices may rise by a further 5 to 10 per cent this year, given the more robust economic recovery and the fact that the buyer base has expanded.