Good Class Bungalows – Fewer sales but Prices Up

2, 400 in 39 gazetted areas. 49 sold in 2012. That’s the GCB real estate market for you.

Good class bungalow in Binjai Park.

Good class bungalow in Binjai Park.

Despite the property cooling measures implemented last year, the buyers are still biting and the prices remained resilient. Although the restrictions of a 16 per cent seller’s stamp duty and 60 per cent loan-to-value ratio may have stopped some in their tracks, the psf pricing of these rare commodities have risen 10 per cent to $1, 276 psf. The limited supplies definitely has a part to play. But perhaps as more are investing for the longer term and are more likely to be home occupiers, they may be willing to pay more. GCBs can be found in the Nassim, Dalvey, Tanglin, Binjai Park, Leedon Park, Ridout Road, and Chatsworth Road area.

The highest selling Good Class Bungalow in 2012 was one in Ridout Road which went for $60.6 million. Bought for $37 million by former goldman Sachs banker Thomas Chan, it changed hands in late March and now belongs to the Tecity Group which falls under the control of the family of the late OCBC Bank chairman Tan Chin Tuan. The second most expensive GCB sold, in Leednon Park, was for a much lower amount at $33 million. At 10, 800 sq ft, it holds six bedrooms and a pool.

The value of these bungalows seem only set to rise in then new year, though perhaps at a slower pace, depending on whether the weak market sentiment set about by the Europe debt crisis will take a turn for the better. Even as Singapore braces herself for slower growth this year, the global economy will affect Asia perhaps in a bigger way this year than the last.

Many units in High-end residential projects unsold

At least 8 residential property developments are reaching the end of their 2-year sales deadline and if they do not sell all their units by the stipulated date, the property developers will have to foot the deadline extension bill to buy themselves more time.

Martin No38Most are high-end private apartments such as The Marq on Paterson Hill, Hilltops in Cairnhill Circle, Scotts Square in Scotts Road, Martin No. 38 and Residences at Emerald Hill. One of the reasons cited for the dip in sales in the high-end market was the additional buyer’s stamp duty. Foreign home demand seems to however to going way off the charts to the luxury landed properties in Sentosa Cove with a number of bungalows going for sky-high prices of late.

But if you’re thinking that prices might start dropping, it might be way to early to wish for a christmas present. Industry experts say property developers are unlikely to drop the prices as this may affect their reputation and stir up unpleasant sentiments amongst earlier buyers. However they might give incentives such as stamp duty absorption or rental guarantees.

Ultimately, it might just boil down to a matter of how much holding power these developers have and how the immigration and housing policy change over the next year.

Hot property alert – Seletar Hills

In an enclave surround by greens, just off the grid enough to be comfortably private with a growing number of amenities nearby, the old estate of Seletar Hills is getting a revival, it seems. Property buyers are increasingly looking out for homes in that areas, landed private homes to be specific. These semi-detached and terrace houses are the target of both local and foreign professionals.

Seletar View Cluster housingAlthough only accessible by car or limited buses, it is nevertheless drawing attention. The new aerospace park and Seletar Airport nearby are probably impetus enough to warrant investors seeing a possible rise in value of properties there. The Greenwich V mall boasts a new Cold Storage supermarket and the district is also in the process of welcoming another shopping mall, The Seletar Mall, by 2014. It’s an area which has yet to see many high-rise condominium projects, with the newest residential developments being The Greenwich.

Even though at least a decade old, the older condominium projects such as Nim Gardens and Mimosa Park, have already seen a 12 per cent rise. With another 1, 000 units entering the property market within the next five years, it could be the next dark horse in Singapore’s real estate scene.

Sentosa Cove home prices reach yet another high

At $32.5 million, more than $4 million more than the previous high of $28.2 million in 2010. The 10, 111 sq ft bungalow at Ocean Drive was sold at $3, 214 psf.  As one of the only areas where foreigners can purchase landed properties, Sentosa Cove has been seeing hearty responses from property investors this last quarter.

Sentosa Cove Bungalow.

The prestige, luxury and exclusivity of Sentosa Cove has lured many foreign home buyers to the area and Urban Redevelopment Authority (URA) data has shown a rise of 1.1 per cent in landed property alone. Overall, the residential property prices rose 0.6 per cent.

Across on the mainland, Serangoon landed properties registered the highest growth with a 33 per cent gain. 156 properties were sold in the third quarter of this year alone. As land becomes more scarce and home sizes shrink, landed properties have become rare and thus reflected in their sales value. Do you know how much your landed property is worth and what should be watching out for when purchasing an existing landed home? How should you work out the numbers and how much should you put aside for reconstruction, renovation and maintenance?

New private homes sales up 84% in a month

Certainly not a margin to be scoffed at. At a 3-year high, new private non-landed residential properties have been enjoying a cool ride on the property wave. The National Development Ministry reported numbers of up to 26,800 HDB flats, 22,400 non-landed private homes and 1,100 landed homes nearing completion by 2014. Though these numbers were pre-dated to before the announcements of the home loans curb, industry players are nevertheless positive about the future outlook for the real estate market.

Skies Miltonia private condominium in Yishun with an expected TOP of 2016. 

A year-on-year comparison with 2010 will show that the number of new home sales by developers within the first 9 months of this year has already topped that of a full year in 2010 – and we still have 3 months left of 2012. Knight Frank research head, Png Poh Soon is expected the year’s total to reach 21,000.

Reasons for the pickup of sales in September could be due to the comparably low number of sales in August due to the Hungry Ghost Month as well as the narrowing gap between resale and new units. But this might mean that the pricing of new launches will determine their uptake and demand in the months to come.

Property investment not as easy as before

For cash-rich property investors who have holding power, buying property right now might be a win-win situation. But for the other folks out there, its risky business.

City Square Residences at Kitchner Link used to go for $1000 psf in 2009. Now it is going for $1,600 psf.

In the 1960s, properties went for between $10,000 to $100,000. Now resale private properties are going for hundreds of thousands, and most of them crossing the million dollar mark. Landed property prices are going off the charts as well. In 2006, flipping properties within a few months and making back your downpayment amount of a few hundred thousand, if not more, kept the momentum going in the real estate market. Then came the 2008 crisis. Property buyers who dared to foray into the then-unstable property market might have made a tidy sum if they had been able to hold on to their properties, but now, making a 100 or 200 per cent upside is no longer a guarantee.

Need to live near schools along the Bukit Timah stretch? Units at Cascadia private condo apartments are available for rent.

As the government delivers on their promise to roll out more HBD flats and with new properties nearing completion within the next two to five years, another roller coaster ride might be in the the books. Instead of the fast lane, property investors might now have to take a slow but steady route – through rental. What this would mean is that investing in smaller units, or units which are easier to rent out in popular locations, could be the way to go. As long as Singapore remains a stable hub of trade and commerce in the region, the demand for rental units will exist. The motivation behind property investment decisions may need to change. Don’t hope for a windfall. Rather, give more thought to the type of property which will give you long-term returns.

Any takers for a $82-million Bungalow?


Despite the wavering global economy, most of the cash-rich will remain cash-rich. Thus a $82-million price tag on an Adam Road bungalow is not surprising. And it wouldn’t be surprising either that someone might take the offer up sooner than expected.

Chee Hoon  Avenue bungalow sold at $28-million. Which other areas in Singapore have bungalows available for sale or rent?

Situated on Jalan Asuhan, also know as “Bankers Lane”, near Serene Centre and Coronation plaza, this 45,155 sq ft site will now also feature a major transport node, the up-and-coming Botanic Gardens MRT Station. It will also be near enough to a range of good schools along the Bukit Timah stretch, but yet exclusive enough to have an extensive land area to call your own.

As one of the few remaining good class bungalows in Singapore, the mere size of this plot of land makes it rarer than rare. And if it’s too rich for the taste, it can also be split into two, making perhaps a profit for the new owner. The most recent big-ticket sale in the same area was a $28-million Chee Hoon Avenue property.

Will the latest cooling measures however, be a deterrent to potential property investors?


PropNex CEO: What Seniors & Singles Should Be Thinking About Right Now

In this exclusive one-on-one interview with at the recent Expo at Marina Bay Sands, CEO of PropNex and Singapore’s leading real estate expert Mohamed Ismail Gafoor discusses the latest trends in the Singapore and Malaysia property market. He also provides valuable advice for 2 growing demographic groups in Singapore: seniors who own a house and are planning for their life after retirement, and singles under 35 contemplating their first studio home purchase.

Mohamed Ismail speaking to a full crowd at the iProperty Expo at Marina Bay Sands

Q. You have often emphasized that landed housing in Singapore is by far the best choice for real estate investors. Could you tell us why? 

Landed property will always be a goldmine – for the simple reason that land is in limited supply, and Singaporeans will always consider owning a landed house to be their ultimate dream.

However, not all landed properties are created equal. While the government can still release sites for landed properties with a 99-year lease, the existing stock of freehold landed properties are highly limited. I would lean away from landed properties with a 99-year lease as they present unique challenges for their owners. It is much harder for leasehold landed properties to meet the criteria for enbloc, as a 100% owner consensus is required – as compared to private condos more than 10 yrs old which need only 80%. There is only a 20-25% price difference at the entry-level for freehold vs. leasehold for landed properties, but the key advantage of freehold landed homes is that it provides for perpetual ownership, making it a much better deal.

Q. What are the possible implications of the proposal to double the entry price at which foreigners can buy real estate in Malaysia?

First of all, I can certainly understand the rationale behind such a policy proposal. Just as what has happened in Singapore, the Malaysian government is concerned about a property bubble forming, and likewise they also have to address the growing public concerns on the ground about rising property prices.

In spite of this, I remain very confident that the M$1 million minimum price for foreign purchasers of Malaysian property will not be a blanket limit across all states. In particular, such a policy would not be advantageous for the state of Johor especially when the entire Iskandar project is still at the infancy stage of development. It is likely the MY$1million minimum purchase price will apply to properties in the downtown KL region, but highly unlikely for areas such as Ipoh and Malacca.

As many well-off Singaporeans have already been picking up units well above the MY$1 million mark, it will not be surprising if they remain willing to pay for a good product which is still relatively affordable, particularly given the strength of the Singapore currency. Those most likely to be affected by the higher entry price are HDB upgraders, who have been mostly buying lower-tier fringe properties.

Q. What should senior citizens keep in mind when deciding if they should opt for the LBS (Lease Buy-Back Scheme), or “downsizing” to a studio flat instead?

PropNex CEO Mohamed Ismail

The LBS has the advantage of allowing seniors to continue to stay in the same flat in the same environment they have grown used to after many years. While some may be concerned about “outliving” the 30 years remaining on the lease under this program, the reality is that there are many seniors who will require specialized care at a health-care facility by that age. Hence, although the take-up rate for the LBS scheme has been low, I do see some do see some merit in this program.

However, I consider “downsizing” to be the more exciting option among the two.  Downsizing to a studio apartment allows seniors to be able to completely cash-out on their existing property and use part of the proceeds to buy a smaller elder-friendly property at a reasonable price. Living in an elder-friendly community with adapted facilities (e.g.: lifts and ramps) will also provide a close-knit community where seniors can grow old together. Furthermore, having a lump sum payment in hand also gives one a greater feeling of strength and security. However, the inherent risk in “downsizing” is that seniors who do not have necessary skill or discipline to manage their funds can lose everything very quickly. Hence, deciding which option to go is very much an individual decision.

Q: What advice do you have for single working professionals under the age of 35 who are contemplating investing into a private studio flat for their own-stay?

As Singapore’s population continues to increase, it is inevitable that property sizes will shrink. Although shoebox unit sizes in Singapore are still decent compared with cities such as Tokyo and Hong Kong, it is undeniable that reduced space and high density will lead to a compromised lifestyle.

For single working professionals who want to move out of their parent’s house into their own home for lifestyle reasons, I would say that it is perfectly okay to buy studio apartment –  but they really need to look out for the PSF (price per square feet) they are paying. Although the quantum of studio apartments may be low, all capital appreciation is ultimately a by-product of rental yield. Hence, the risk is that if rentals do not go up much, there is limited room for capital to appreciate. Paying high prices for an entry-level studio flat in the outlying areas could mean there may be limited scope for rental appreciation.