Year of the Boar kicks off with mega bungalow deals

/ EdgeProp Singapore |

February 16, 2019 2:00 PM SGT

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Word on the street is that a Good Class Bungalow (GCB) plot of 26,000 sq ft at Leedon Park was sold for $50 million ($1,923 psf) recently. This marks the third GCB deal done this year so far.

On Feb 5 – the first day of Chinese New Year – a GCB on Ewart Park, off Holland Road, was sold for $30 million. The GCB sits on a relatively large plot of 27,000 sq ft. The price therefore translates to $1,111 psf.

The GCB at Ewart Park which was sold for $30 million on the first day of Chinese New Year (Credit: Samuel Isaac Chua/EdgeProp Singapore)

“It’s a very fair price,” says Bruce Lye, managing partner of property brokerage firm, Singapore Realtors Inc (SRI), who brokered the sale. The GCB has an “auspicious house number” and a 60m wide frontage, he adds.

The buyer is said to be a Chinese national-turned-Singapore citizen. The last transaction done for a GCB at Ewart Park was almost two years ago: It was for a property sitting on a land area of 15,468 sq ft that changed hands for $15.93 million ($1,030 psf) in April 2017, according to a caveat lodged with URA Realis then.

As the house at Ewart Park was built about 10 years ago, Lye expects the new owners to either refurbish the property or tear it down and rebuild after completing the purchase. The GCB had been on the market for six months with negotiations ongoing for the last three months. “The buyer and seller happened to come to an agreement on the eve of Chinese New Year and concluded the deal the following day,” adds Lye.

The house at Ewart Park was built about 10 years ago (Credit: SRI)

He is also marketing two other GCB plots in Ewart Park: one is a new GCB sitting on a 34,000 sq ft site that can be sub-divided into two smaller GCBs sites; the other is also a new house sitting on a 38,000 sq ft site. Both properties are on the market with a price tag of $58 million each.

Near-record price

The first GCB deal of the year was concluded on Jan 23, according to a caveat lodged then. The property was a bungalow at Jervois Hill sitting on a land area of 15,199 sq ft. It was sold for $30.88 million ($2,032 psf).

The seller of the Jervois Hill GCB was a Singaporean couple originally from Hong Kong. As their children have grown up and moved out of the family home, the couple has decided to sell the house as it was too big for them, says Steve Tay, senior associate VP at List Sotherby’s International Realty (List SIR), who represented the sellers in the sale.

The first GCB transaction of 2019 was a bungalow at Jervois Hill which was sold for $30.88 million (Credit: List SIR)

The buyers are believed to be a couple with young children, who intend to move in with their parents as the house is ideal for a multi-generational home. Realstar Premier represented the buyer.

In psf terms, the Jervois Hill transaction in January was the second highest transaction in the GCB estate. The highest psf price achieved in Jervois Hill was for a newly completed GCB at the other end of the road. It fetched $41.2 million or $2,728 psf in June last year. The deal was brokered by KH Tan, founder and managing director of Newsman Realty. It was a record price in psf terms, not just in Jervois Hill, but also an all-time high for a GCB deal to date.

“Generally, sellers prefer to put their properties on the market for sale with the hope of getting a price close to the record price achieved,” notes William Wong, founder and managing director of Realstar Premier Group.

The swimming pool of the house at Jervois Hill, which is said to have been sold to a multi-generational family (Credit: List SIR)

Eye-popping deals in 2018

Newsman’s Tan is also said to have brokered the sale of the biggest GCB deal to date: It was for a Nassim Road property sitting on a freehold site of 42,515 sq ft that fetched $105.3 million ($2,477 psf).

Another deal above $100 million last year was for a house sitting on a 66,452 sq ft, freehold plot at 14 and 14A Nassim Road. It was formerly the home of the Tan family of private investment firm Siang Kuang, and was sold for $218 million to Hong Kong-listed Shun Tak Holdings, controlled by Pansy Ho, daughter of Macau casino kingpin Stanley Ho.

The site at Nassim Road is not zoned as a GCB and can therefore be redeveloped into a luxury condo with a plot ratio of 1.4 and gross floor area of 93,033 sq ft, according to CBRE which brokered the sale. Hence, the purchase price translated to $2,744 psf per plot ratio (ppr), including development charge.

The property at Nassim Road that was purchased by Shun Tak Holdings in June last year (Credit: CBRE)

Shun Tak also purchased Park House for $375.5 million, or a record price of $2,910 psf ppr for an en bloc site. Both deals were done in mid-June, the month before the property cooling measures were introduced.

Whether there will be another bungalow deal above $100 million this year remains to be seen. If Cheng Wai Keung, chairman of listed property developer Wing Tai Holdings, were to put his GCB on the market this year, “we could see another mega deal”, says Newsman’s Tan. In April 2013, Cheng had offered the property for sale with a $300 million price tag. The GCB sits on an elevated, 85,000 sq ft, freehold site on Nassim Road.

New high in psf price

Newsman’s Tan is confident that this year could see a new benchmark “in terms of psf price” in the GCB segment.

He is currently marketing a new GCB located on Cluny Road opposite the Botanic Gardens. Last year, he received an offer of $45 million for the new house which sits on a freehold land area of more than 15,000 sq ft. The owner, however, is holding out for $50 million. If that price is achieved, it will set a new record “above $3,000 psf”, notes Tan. “For choice locations near Botanic Gardens, such as Nassim Road, Cluny Road, Lermit Road and Dalvey Estate, people are willing to pay a premium,” he adds.

The former home of the late Lim Kim San at Dalvey Road was sold for $93.9 million last Oct (Credit: JLL)

SRI’s Lye agrees. “Demand for such premium locations and plots remains high. Prices in these areas are expected to increase this year.” He reckons there are a handful of plots in these coveted neighbourhoods that are currently on the market. “Whether a deal is done depends on who is willing to pay the premium prices,” he says.

“Pent-up demand” post-cooling measures

The pickup in GCB deals since 4Q2018 is attributed to “owners being more realistic with their asking prices after the property cooling measures kicked in”, says Lye.

Besides owners adjusting their prices, Realstar’s Wong sees “pent-up demand” contributing to the increased activity. “It usually takes six to nine months for the market to stabilise after new measures have been introduced,” he observes. As it’s now more than six months since the property cooling measures were implemented last July, Wong sees buyers who had stood on the sidelines now re-entering the market in search of their “dream property”.

The buyer of the GCB at Ewart Park is said to be a Chinese national turned Singapore citizen (Credit: SRI)

Anecdotally, about 20% of the buyers are Singapore citizens who were originally Chinese nationals, Wong observes. The others include Indonesians-turned-Singapore citizens as well as upgraders from smaller landed properties.

Realstar Premier is marketing a GCB in the King Albert Park area in District 21 that is on the market for $30 million ($918 psf). In District 10, the property agency is marketing half a dozen GCBs, including a property in Leedon Park for $35 million ($1,845 psf); another one on Swettenham Road for $30 million ($1,628 psf); and one on Lermit Road for $42 million ($2,417 psf).

GCB transaction volume in 2019 is expected to be “about 20% higher” than last year’s, says Wong. However, in terms of total value, he foresees a drop from last year. “In 2018, we saw many big plots sold,” he adds.

The bungalow at Faber Park that was sold for more than $10 million (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Newsman’s Tan agrees. Besides the Nassim Road deal that went for $105.3 million, another mega GCB deal was the sale of a bungalow sitting on a 52,059 sq ft plot on Dalvey Road that fetched $93.9 million ($1,804 psf) last October. The seller was the estate of the late Lim Kim San, former minister and first HDB chairman.

Downsizing, wealth distribution

Tan sees three types of sellers in the GCB market today: those conducting estate sales as property tax becomes heftier; parents who want to downsize as their children have grown up and gone abroad; those who are getting on in age and want to downsize to a smaller property. “There are also those who are sitting on a big GCB plot of 20,000 to 30,000 sq ft, and are looking to downsize to a smaller bungalow as well as buy a bungalow for each of their children,” he adds. “It’s a form of wealth distribution.”

The pick-up in transactions has not been confined to GCBs but has also extended to the other tiers of the landed housing segment, such as the smaller bungalows and semi-detached houses, says Wong.

The bungalow at Vanda Crescent fetched $12.9 million recently (Credit: SRI)

SRI’s Lye can attest to that. Including the sale of the GCB at Ewart Park for $30 million, Lye sold two other bungalows – one located at Vanda Crescent for $12.9 million, and another at Faber Park for over $10 million. In all, he sold three bungalows worth close to $55 million in the week leading up to Chinese New Year.

Some of the GCB owners who have downsized still want to live in a house. “A lot of them are sentimental about their garden,” says Lye. “Some are so attached that they want to bring their plants with them to the next house.”

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