Residential Market News Extract - 27 July 2012

GCBA deals double in Q2; transaction value up 60%

Activity in Singapore's Good Class Bungalow (GCB) Areas perked up in the second quarter after an initial knee-jerk slowdown in Q1 in reaction to the additional buyer's stamp duty (ABSD) introduced last December.

A caveats analysis from CBRE shows that the number of deals in GCB Areas has doubled from nine in Q1 to 18 in Q2. The value of transactions has also risen by around 60 per cent - from Q1's $224 million to $359 million in Q2.

And the momentum seems to be continuing into the third quarter. An option is said to have been exercised earlier this month for a two-storey bungalow on elevated grounds at Oei Tiong Ham Park off Holland Road at $17.5 million, which works out to $1,614 per square foot (psf) on freehold land area of about 10,844 sq ft.

A few days ago, a deal is said to have been entered into for a bungalow at Olive Road at $30 million or $1,185 psf. On the nearly 25,320-sq-ft site, in the Caldecott Hill Estate GCB Area, is a two-storey bungalow with a pool and an outhouse. The buyer is expected to tear down the existing property and redevelop the site.

A bungalow on Peirce Hill could also be changing hands at around $25 million, which would work out to $1,650 psf. The land area is about 15,150 sq ft and the property is part of City Developments' Peirce Villas project, which was completed in 2000. June's GCB transactions include a property at Old Holland Road which was sold for $20.8 million or $959 psf and a White House Park Road bungalow that sold for $24.8 million ($1,649 psf).

The average price of transactions in GCB Areas in first-half 2012 was $1,370 psf, up about 7 per cent from the $1,276 psf average for full-year 2011's transactions.

Analyst predicts 2012 will end with 50-55 deals totalling around $1-1.1 billion - similar to last year's tally of 57 deals adding up to $1.16 billion. The record year was 2010, with 133 transactions totalling $2.4 billion.

GCBs typically have a minimum plot size of 15,069.46 sq ft, but when GCB Areas were gazetted in 1980, they included some smaller existing sites. These are still considered GCBs as they would be bound by other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further subdivided.

Source: Business Times – 27 July 2012

Rentals of luxury apartments fall 0.8%

Monthly rentals of luxury apartments fell 0.8 percent in Q2 this year due to tighter immigration rules.

The consultancy stated that stricter immigration controls affected spill-over leasing demand from foreigners who cancelled or postponed their buying decisions due to the additional buyer’s stamp duty (ABSD).

Although enquiries picked up towards the tail end of Q2 2012, tenants with tightened housing budgets kept a lookout for more affordable housing alternatives in the high-end market segment while expatriate families with comparatively bigger housing budgets diverted their attention to landed properties, in search of a relatively more private and spacious environment.

Consequently, average monthly gross rents of luxury/super-luxury apartments dropped 0.8 percent quarter-on-quarter to S$5.64 psf in Q2.

Source : PropertyGuru – 26 Jul 2012