Heading for a 10-year high


Luxurious: The view from a waterfront property for sale in the North Cove of Sentosa Cove in Singapore. The level of sales deals in the six months to June 30 was the best half-year performance in 11 years. — Bloomberg

SINGAPORE: The total value of good class bungalow (GCB) deals is heading for a 10-year high if sales continue at the blistering pace they have set so far this year.

There have been 68 sales totalling S$2.05bil (RM6.3bil) from Jan 1 to Aug 20, up 392% from the 21 deals worth S$415.8mil (RM1.2bil) in the same period last year, noted List Sotheby’s International Realty.

That S$2.05bil (RM6.3bil) total is also 88% above the S$1.09bil (RM3.3bil) of sales racked up in 46 deals done last year, the real estate services provider added.

JLL Singapore said the level of deals in the six months to June 30 was the best half-year performance in 11 years, a striking outcome given the pandemic and severe recession that resulted in gross domestic product (GDP) contracting 5.4% last year.

List Sotheby’s executive director Lewis Cha said that the spike in value this year might be due to the sale of new-build GCBs and bungalows on large parcels in excess of 25,000 sq ft.

The previous high was in 2010, when 120 bungalows were transacted at a total of S$2.24bil (RM7bil) as Singapore’s economy was recovering from the global financial crisis, said List Sotheby’s.

While the number of deals so far this year may not be as high as it was a decade ago, the average GCB price has jumped 66% to about S$30mil (RM92.52mil), compared with S$18mil (RM55.51mil) in 2010, List Sotheby’s research director Han Huan Mei said.

A slew of digital economy entrepreneurs have paid top dollar for homes in recent months.

Two major GCB deals were struck in the first half of the year. A 32,160 sq ft property built in the 1960s in Nassim Road was sold to the wife of Nanofilm Technologies founder Shi Xu in March for S$128.8mil (RM397.22mil) – the highest-value GCB transaction recorded in the first half of this year – or a land rate of S$4,005 (RM12,351) per sq ft (psf).

A 14,844 sq ft bungalow in Cluny Hill went to a local tech entrepreneur in his 30s at a sky-high rate of S$4,291 (RM13,233) psf, or S$63.7mil (RM196.45mil), in April.

Interest has grown from business owners and entrepreneurs in technology-related sectors, which are benefiting from the pivot towards digitalisation spurred by the pandemic.

“Some GCB buyers are also crypto investors, and second-generation ultra-high-net-worth Singaporeans in their mid-to late 30s,” said Bruce Lye, co-founder of real estate agency SRI.

Singaporean Chew Shou Zi, the chief executive of Chinese video-sharing app TikTok, is buying a property in the Queen Astrid Park GCB area for S$86mil (RM265), which works out to about S$2,700 (RM8,326) psf on a site of just over 31,800 sq ft.

Gaming company Razer co-founder and chief executive Tan Min-Liang is acquiring a home in Third Avenue for S$52.8mil (RM162mil), or S$1,706 (RM5,261) psf, on a 30,954 sq ft freehold site.

The family of Grab co-founder and chief executive Anthony Tan has bought a freehold property in the Bin Tong Park GCB area for S$40mil (RM123mil).

The price translates to S$1,851 (RM5,708) psf, based on the 21,602 sq ft site – exceeding the last transacted price of S$1,685 (RM5,196) psf, or about S$37mil (RM114.1mil), for a bungalow in Bin Tong Park last December.

Ian Ang, the 28-year-old co-founder and chief executive of gaming chair company Secretlab, splashed out S$51mil (RM157mil) in just a week on two luxury properties – a good class bungalow in Caldecott Hill and a penthouse near the Botanic Gardens.

Last November, Ang was granted an option to buy a S$36mil (RM111.02mil) bungalow in Olive Road on June 14. The price translates to S$1,537 (RM4,740) psf, based on the 23,424 sq ft site – exceeding the last transacted price of S$744 (RM2,294) psf for a bungalow in nearby Andrew Road.

Han noted that the sales momentum began last November, underpinned by low interest rates and “driven by new millionaires whose businesses benefited from the crisis, families upgrading to their first bungalow and those buying for legacy purposes or investment yield”.

GCBs are prized assets because of their long-term investment value and limited stock.

There are fewer than 3,000 in 39 gazetted GCB areas, which is less than 1% of total private housing stock in Singapore, according to JLL.

The Republic’s expected economic recovery and safe-haven reputation also augur well for the GCB sector, drawing the super-wealthy to set up family offices and homes here.

While land rates across all GCB locations have increased this year, Tricia Song, CBRE’s head of research for South-East Asia, noted that the rise has not been uniform, with the biggest jump seen only in coveted locations such as Nassim.

CBRE Research found that land rates have increased from S$1,419 (RM4,376) psf last year to S$1,736 (RM5,353) psf this year – a rise of about 22% – but are up nearly 62% from 2010. — The Straits Times/ANN

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