Good Class Bungalow (GCB) transactions in Singapore hit $1.85 billion year-to-date, an increase of 7.3 percent from the $1.72 billion deals recorded last year, based on CB Richard Ellis's analysis of URA Realis caveats information.
However, according to The Business Times, at least $100 million worth of GCB deals are expected to be exercised before the year ends.
The $1.85 billion worth of GCB deals so far this year includes 101 transactions, slightly lower that the 109 GCBs sold in 2009 and 119 in 2006. The average price of GCBs sold has also risen 27.1 percent from $831 psf in 2009 to $1,056 psf for YTD 2010.
Among the successful deals recorded in the GCB market includes the sale of a bungalow at 18 Astrid Hill for $28.4 million, or approximately $1,500 psf based on the land area of around 18,939 sq ft.
Interestingly, a neighbouring bungalow in Astrid Hill was also sold for $25 million in November, or around $1,169 psf on a land area of 21,377 sq ft. It was previously transacted in February for $18.6 million, giving its seller a profit of $6.4 million or approximately 34 percent more.
Douglas Wong, director for luxury homes at CBRE, said the increase in the average price of GCBs are largely due to the economic growth of the country, its ability to lure ultra high net worth individuals, its limited stock, and the opening of the two integrated resorts.
“GCBs have also appealed to ultra high networths seeking a hedge against inflation, especially given Singapore's political stability,” said Mr. Wong.
CBRE predicted 100 GCB transactions next year worth approximately $2 billion, with an average price appreciation of between 8 percent and 10 percent.
“The GCB market is set to remain firm based on the interplay of demand and supply factors. Like an evergreen product, GCBs will continue to attract well-heeled local businessmen, bankers, doctors and lawyers as well as permanent residents,” he said
William Wong, managing director at RealStar Premier Property, is also optimistic about the GCB market in 2011.
“We'll be seeing more PRs turning to Singapore citizens next year and this will allow them to buy bigger-plot GCBs or more than one GCB. I believe there will be shortage of big-plot GCBs to meet the demand of some of these ultra-rich new citizens. Prices of GCBs in prime locations such as Tanglin will likely hit above $2,000 psf next year from about $1,800 psf currently.”