The Business Times
Thursday, Oct 11, 2012
SINGAPORE - The volume of deals in Good Class Bungalow Areas (GCBAs) slipped in the third quarter, based on a preliminary analysis of caveats by CBRE Research.
Between July and September, 14 such properties changed hands for a total $285.1 million, down from 18 transactions at $358.8 million in Q2.
Last Friday's announcement by Monetary Authority of Singapore (MAS) restricting the tenure for housing loans and lowering loan-to-value (LTV) limits for long-tenure loans to property investors is not expected to have a major impact on GCB buyers, who are typically ultra-rich Singaporeans.
However, at least one major GCB agent predicts a slowdown in activity this quarter, as buyers and sellers wait to assess the impact of the new measures.
RealStar Premier Group managing director William Wong said: "As with any new government measures, there'll always be an impact in the short term - one to three months. But the effect of this measure seems to be marginal on the GCB market, compared with past measures."
He expects sales to pick up again next year, starting in the second quarter.
Mr Wong and other GCB agents told BT that even before MAS's announcement, banks were generally giving loans of only 50-60 per cent of valuation for GCBs, against loans of up to 80 per cent for the general housing market.
Starting last Saturday, MAS lowered the LTV limit to 40 per cent for borrowers taking housing loans exceeding 30 years or loans extending past their retirement age (65 years), where these borrowers have one or more outstanding housing mortgages.
A 10-20 percentage point drop in LTV, while amounting to between $2 million and $4 million on a $20 million bungalow purchase, is unlikely to make much difference to most buyers in this group, said Samuel Eyo, director of prestige homes at Savills Singapore.
He said: "GCB buyers are typically high net worth Singaporeans.
They tend to be prudent and gear conservatively - if they gear at all - on a big-ticket investment like a GCB."
Among recent bungalow deals in GCBAs is one for a property in Gallop Road, which was sold for $28 million or $1,874 psf on a freehold plot measuring 14,940 sq ft.
The two-storey house, completed a few years ago, has a basement large enough for at least five cars; it also has six bedrooms, a guest room and a swimming pool.
Its built-up area is around 10,000 sq ft.
The bungalow is being sold by boutique developer and investor Satinder Garcha.
The buyer, represented by RealStar, is believed to be a currency trader who recently sold a GCB in Oriole Crescent. Both he and the seller, represented by Newsman Realty, are Singapore citizens.
A freehold bungalow in Margoliouth Road, off Stevens Road, changed hands last month for $20 million, or at $1,572 psf on land area of around 12,725 sq ft.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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