Kalpana Rashiwala The Business Times Tuesday, Feb 17, 2015 -

Indonesian mining tycoon Low Tuck Kwong is said to be the party selling a Good Class Bungalow (GCB) along Swettenham Road for S$23.52 million.

This translates into S$1,543 per square foot based on the freehold land area of 15,239.53 sq ft.

Mr Low and his family are said to reside in the two-storey freehold bungalow, which has four spacious bedrooms and a swimming pool. RealStar Premier brokered the sale. Analysts noted that the transacted price is lower than the S$30 million the seller had been asking as recently as nine months ago.

Mr Low's family is also said to be negotiating to sell another property on Swettenham Road, which is an investment property that the family has held for rental income.

Both properties are said to be held by Mr Low's children, who are Singapore citizens. Mr Low himself was a Singaporean who changed his nationality to Indonesian; he is now understood to be a Singapore permanent resident.

26 Good Class Bungalows sold for $588 million

He is the founder of Indonesian coal producer PT Bayan Resources and also controls Manhattan Resources, which is listed on the Singapore Exchange. As well, Mr Low is a key investor in the company that developed the Connexion project above Farrer Park MRT Station.

Word in the market is that the Low family is consolidating its properties in the locale by selling the two GCBs on Swettenham Road and moving to a brand-new large bungalow the family is building on nearby Peirce Hill.

Another GCB transaction inked this year was at Gallop Road that changed hands for S$24 million or S$1,564 psf on land area. On site is an old two-storey bungalow with a basement and a pool, on a downward-sloping site.

The buyer, who is understood to be Quek Kon Hui, managing partner of Apac Capital Partners, is likely to rebuild the house, say market watchers.

According to data compiled by CBRE, 28 bungalows totalling S$626.14 million were transacted in GCB areas last year, lower than the 29 transactions that amounted to nearly S$682 million in 2013. In 2012, there were 54 deals totalling S$1.17 billion.

Newsman Realty managing director KH Tan said the biggest challenge to GCB transactions remains the total debt servicing ratio (TDSR) framework and additional buyer's stamp duty (ABSD). "Buyers who have the money and want to buy for investment are not happy to pay the ABSD of 7 per cent or 10 per cent.

On the other hand, if they were to buy in the names of their wife or children who do not own any properties (in a bid to avoid ABSD), they may be affected by TDSR as their family members may not have sufficient income to qualify for a loan under the TDSR framework."

Based on CBRE's data, the average price per GCB deal eased 5 per cent to S$22.36 million in 2014 from a record S$23.52 million in 2013. "It is likely that the average price of GCBs with land areas of about 15,000 sq ft will hover around $22 million each this year, taking into account the location, size, age, design, terrain, frontage, etc, of the individual properties.

The market should clock in about 20-30 sales in GCB areas in 2015," said Douglas Wong, head, luxury homes at CBRE Realty Associates.

RealStar Premier Group CEO William Wong estimates that GCB prices have dropped about 5-8 per cent since the introduction of the TDSR framework in June 2013. "There will still be a drop in prices this year, but it will be marginal, probably about 2 to 3 per cent towards year-end.

We are close to an equilibrium point where sellers' asking prices are close to some buyers' expectations," he added.

Mr Wong of RealStar predicts about 30 per cent increase in transaction volumes this year, with the momentum starting to pick up after the Chinese New Year period. "During good years, the second quarter has been the best quarter for GCB deals."

Outside GCB areas, luxury bungalows on mainland Singapore have seen a much steeper price drop of around 10 per cent post-TDSR, he added. "For example, a brand new three-storey boutique bungalow in Bukit Timah area on about 5,000 sq ft of land used to transact at S$12-plus million; now it is about S$11-ish million," noted RealStar's Mr Wong.

Based on caveats data, a few sizeable bungalow deals were sealed recently outside GCB areas.

These include a pair of adjacent properties along Holland Road (in the Chip Bee Gardens estate) that sold for an identical S$1,592 psf on their respective land areas. The two properties were sold by different sellers, but to the same set of three buyers, on the same day in January this year.

One bungalow, on 6,987 sq ft of land, fetched nearly S$11.12 million; and the other, with a land area of 7,150 sq ft, sold for S$11.38 million.

In the Berrima Road area in the Dunearn Road vicinity, a bungalow sold for S$22.3 million or S$1,573 psf based on its land area of 14,173 sq ft. It was picked up by a boutique developer, DDS Development.

- See more at: http://business.asiaone.com/news/min....81z99IPE.dpuf