16 GCB transactions have happened in the first two months of 2021, which is the first time since 2010. Photo: SRI
Singapore’s Good Class Bungalow (GCB) market had a good start in 2021, registering nearly $424 million of deals during the first two months of the year, or nearly 40% of the tally for the whole of 2020, reported The Business Times (BT).
URA Realis’ caveats data showed that there were 16 GCB transactions since the start of 2021, with the latest deal dated 23 February.
Han Huan Mei, Research Director at List Sotheby’s International Realty (List SIR), noted that the last time sales volume for the first two months of the year reached double-digit was in 2011 and 2010, with 12 and 18 deals, respectively.
“Incidentally, 2010 was the period in which the Singapore economy was recovering from the Global Financial Crisis, aided by the opening of the two integrated resorts,” she said as quoted by BT.
BT noted that the final tally of GCB deals for the first two months of the year is expected to increase in the coming weeks should more caveats be lodged.
While anyone can acquire a non-landed private house in Singapore, one has to be a Singapore citizen to be able to buy a landed property within a GCB area (Singapore Permanent Residents/foreigners may also buy GCBs with special approval from the Singapore Land Authority).
Considered the most prestigious form of landed housing in the city-state, bungalows within the 39 gazetted GCB Areas come with strict planning conditions to preserve their low-rise character and exclusivity.
One of the recent transactions is the $30.88 million GCB in Pierce Road. An entity controlled by SC Global Developments’ Simon Cheong is selling the property, while the buyer is understood to be Luxasia Director Sabrina Chong, who is also the daughter of Luxasia founder Patrick Chong.
The sale is understood to have been brokered by Newsman Realty.
Also changing hands is a property along Old Holland Road. The property is being sold by two individuals for $28 million to Ali Maghami, a naturalised Singapore citizen.
In December 2019, Maghami sold a 77% stake in feeder and shortsea operator Feedertech Group to Danish carrier service Unifeeder.
He retained the remaining 23% stake in Singapore-based Feedertech, which he founded in 2003.
Steve Tay of List SIR represented the sellers, while Newsman Realty acted for the buyer.
Realstar Premier also saw brisk sales activity, brokering five GCB transactions that are reflected in URA Realis caveats data so far this year. It has three more deals for which buyers are yet to exercise the options to purchase.
GCB market’s strong sales momentum continues after ending 2020 on a high note, with 46 transactions totalling $1.09 billion, up from 20 deals amounting to $782 million in 2019.
While transactions were slow during the first half of 2020 due to COVID-19 pandemic and the resulting lockdown as well as the restriction on property viewing, GCB transactions made a strong comeback during the second half.
Aside from the low interest rate environment and pent-up demand, observers also pointed to the narrowing price gap as another crucial factor in sealing GCB deals.
Realstar Premier Founder William Wong attributed the continuing sales momentum within the GCB market to the fear of missing out, particularly in the competition for prized assets within prime locations.
He expects the strong momentum to continue in Q2 2021 and extend into Q3 2021, before slowing down in Q4 2021 as he anticipates the price gap to gradually widen.
“Some sellers are beginning to adjust their price upwards or withdraw their properties from the market. Within the next one to two quarters, those which are reasonably priced would have been sold, leaving behind properties which are probably over-priced,” said Wong as quoted by BT.
“Also new GCB listings have higher price tags, which makes it more difficult to get buyers.”
List SIR Executive Director Lewis Cha shared that some owners have “withdrawn their properties from the market – be it a change of their intention to sell, or their desire to wait for prices to rise further”.
“This mismatch between demand and supply may lead to a slowdown in sales activity as well as an upward pressure on prices,” he said as quoted by BT.
Barring unforeseen circumstances and/or the imposition of property cooling measures, Cha expects around 60 GCB to be transacted this year, with prices increasing by 5% to 10%.
Wong, on the other hand, expects more than 60 GCB transactions for this year, with prices increasing 7% in prime area such as Dalvey, Cluny, Chatsworth and Tanglin.
“In the not-so-prime areas such as Brizay Park, Old Holland Road, the Binjai and Yarwood areas, prices are likely to rise by another 3-5% in 2021 after going up 2-3% in 2020,” he added.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
