http://www.businesstimes.com.sg/spec...-well-20121101
Published November 01, 2012
GCB market weathers latest cooling measure well
5 caveats lodged for October; deals total $122m, comparable to Sept and Aug
By Kalpana Rashiwala
Done deals: The latest deals involve a six-bedroom Leedon Park bungalow (above) and a Balinese-styled four-bedroom bungalow at Sian Tuan Avenue - PHOTO: 16A LEEDON PARK
[SINGAPORE] The market in Good Class Bungalow Areas appears to have fared relatively well in October, despite a possible pullback in activity predicted by some players following the introduction of measures early last month to restrict tenures for housing loans and lower loan-to-value (LTV) limits for longer tenure loans.
CBRE's analysis shows five caveats were lodged last month totalling $122 million, with the possibility of more streaming in over the coming weeks for deals inked last month. The initial October tally mirrors September's performance - six deals done at $128 million - and that of August (six transactions totalling $119 million). In July, four deals were done for $84.5 million.
October's caveats include two transactions of vacant sites - at Swettenham Road and Jervois Hill.
The Swettenham Road deal involved a freehold hilltop site with land area of 15,450 square feet. It sold for $21.98 million or $1,423 per square foot (psf). RealStar represented the seller, a Singaporean doctor, while DTZ represented the buyer.
At Jervois Hill, bungalow investor George Lim picked up a 15,094-sq-ft plot for $25.8 million. This works out to $1,709 psf.
In the same month, Mr Lim sold a Leedon Park bungalow for $33 million or $2,110 psf on its 15,640-
sq-ft land area. The property, which Mr Lim developed, has six bedrooms and a pool. It has obtained BCA's Greenmark Gold Plus award and was completed last year. Newsman Realty was involved with both deals. Another deal last month was the two-storey Olive Road bungalow sold by the estate of the late philanthropist Khoo Oon Teik for $26.1 million or $1,114 psf. The deal was brokered by Knight Frank.
A property at Kingsmead Road (near Coronation and Victoria Park roads) also changed hands for $15.1 million or $1,776 psf on land area of 8,504 sq ft in October.
Typically GCBs have a minimum land area of 1,400 square metres (15,069 sq ft). However, when GCB Areas were gazetted in 1980, they included some slightly smaller existing sites. Nonetheless, these are still considered GCBs as they would be bound by the other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further sub-divided and they cannot be built more than two storeys high (plus an attic and a basement).
RealStar Premier Group managing director William Wong suggests that most of the caveats for bungalows in GCB Areas for October involved deals which originated in September or early October before the restrictions on home loan tenures took effect. "There was a slowdown in activity and transactions in October as anticipated due to the new measures introduced. Nevertheless, I foresee pent-up demand and a pick-up in transactions early next year, provided no further cooling measures are unveiled."
However, Newsman Realty managing director KH Tan has not seen any slackening in activity. "The past eight weeks have been my busiest this year in the GCB market - in terms of viewings, negotiations and deals." Newsman brokered three deals in October and has another three that are nearly done, he added.
CBRE's analysis of caveats captured by URA Realis and SISV Realink shows that in Q3, 16 deals in GCB Areas were done totalling $332 million, down from 18 transactions at $359 million in Q2 2012. Year to date, the tally is 48 transactions totalling $1.04 billion.
Meanwhile, a 24,207-sq-ft freehold plot in the Holland Rise GCB Area has been put on the market. Knight Frank, the sole marketing agent for the site, says the indicative guide price for the vacant plot is $1,300-$1,500 psf on land area.
The expression of interest exercise for the property closes on Nov 22. The property is situated on elevated ground, at one of the highest points in the exclusive Holland Rise GCB estate," says Knight Frank executive director, investment (commercial sales) Mary Sai. The plot is about 500 metres from Holland Village MRT Station and the shopping and dining establishments in Holland V.
From Oct 6, the Monetary Authority of Singapore has capped the maximum tenure for all home loans at 35 years. In addition, for new loans with tenures exceeding 30 years or loan periods extending past the borrower's retirement age (65 years), the LTV limit has been capped at 40 per cent for borrowers with one or more outstanding housing mortgages and 60 per cent for those with no outstanding home loan.
While a lower LTV was not expected to affect the well-heeled set who make up GCB buyers, some observers had predicted a knee-jerk slowdown in activity.
RealStar's Mr Wong said that for smaller bungalows outside GCB Areas as well as semi-detached properties, "we've seen a couple of cases where potential buyers had to re-do their sums on cash outlay and monthly mortgage payment, which led them to eventually withdraw from the purchase".
Nonetheless, RealStar has handled several boutique bungalow deals lately - at Berrima Road, near Raffles Town Club ($9.5 million or $1,705 psf on land) and in the University Road area ($14.4 million or $1,778 psf). In Sian Tuan Avenue near Binjai Park/
Yarwood Avenue, a Balinese resort styled bungalow fetched $10.388 million ($1,751 psf). The bungalow has four bedrooms.
RealStar represented the buyer and Jones Lang LaSalle, the seller.
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