Sentosa Cove bungalow fetches record $39m

IN the latest sign of a revival in the high-end bungalow market, a seafronting bungalow at Cove Drive has changed hands at $39 million, a record absolute price for a bungalow in the upscale waterfront residential district of Sentosa Cove.

This surpasses the previous high of $36 million for a bungalow on Paradise Island that was transacted in 2010. That worked out to $2,403 per square foot (psf) on land area of 14,983 sq ft for the waterway-facing property.

In the latest deal at Cove Drive, the price works out to $2,448 psf based on the land area of 15,929 sq ft. The property is understood to have been sold by a Singaporean to a buyer from India who is said to be involved in the resources sector. The completed bungalow includes five bedrooms, a spacious living area and an entertainment room.

Residential properties on Sentosa Cove have 99-year leasehold tenure.

On mainland Singapore, too, talk in the market is that another headline-grabbing price may be set in a Good Class Bungalow Area (GCBA) involving a vacant plot at Jervois Hill. The agreed price is said to be $31 million or about $2,050 psf based on the freehold site’s land area of around 15,120 sq ft. A Singaporean investor is thought to have entered a deal to sell the land to a party who is said to have paid a higher-than-normal option deposit. The deal also involves a completion period of one year – longer than the usual three months. Word on the street is that the buyer will be applying to become a Singapore citizen.

Purchases of landed homes on mainland Singapore by foreigners (including permanent residents) is restricted. Such buyers have to obtain permission from the Land Dealings (Approval) Unit or LDAU. Applicants have to fulfil certain criteria before permission is granted, including being a Singapore PR and making significant economic contribution to the country.

Sentosa Cove is the only place in Singapore where non-PR foreigners may buy a landed home, though still subject to LDAU approval. A foreigner (including a PR) may own only one landed home in Singapore (including Sentosa Cove) and this must be used for own occupation. The land area for the property must not exceed 15,000 sq ft.

Property market watchers say the $2,050 psf for the Jervois plot is a new high for the area. That’s the kind of pricing one would expect in the Nassim and Dalvey areas.

Last week, BT reported that motoring tycoon Peter Kwee had sold a vacant plot of about 23,920 sq ft at Nassim Road for about $47.8 million or $2,000 psf.

The psf record price for a GCBA is held by 6 Chatsworth Road, which transacted at $2,081 psf in July last year. This slightly surpassed the previous record of $2,038 psf for 16 Cluny Road set in February 2011. That deal in turn broke the previous high of $1,899 psf for 32H Nassim Road in October 2007. However, the Chatsworth bungalow and 32H Nassim Road have smaller land areas than the typical minimum GCB plot size of 15,069.50 sq ft.

When GCBAs were gazetted in 1980, they included some smaller existing sites. These are still considered GCBs as they would be bound by the other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further sub-divided.

Another recent GCBA deal is at Wilby Road, where an old two-storey bungalow sold for $15.2 million or $1,093 psf. The site area is 13,906 sq ft. RealStar Premier Group represented the buyer. Other recent bungalow deals outside GCBAs are said to include a property at Jalan Arnap in the prime One Tree Hill locale, which fetched $12.5 million or about $1,710 psf based on land area of about 7,300 sq ft. On site is an over 30-year-old bungalow.

At Jalan Jambu Ayer in the Binjai Park area, an old bungalow on a rectangular plot with land area of about 7,212 sq ft and wide frontage of about 17 metres is understood to have changed hands recently for $9 million or about $1,248 psf. At Sunset View in the Clementi area, RealStar brokered the sale of a freehold bungalow for $7.5 million or $1,190 psf based on land area of 6,302 sq ft.

After an initial knee-jerk reaction to the introduction of the additional buyer’s stamp duty (ABSD) that took effect on Dec 8, house hunters have started to return to the bungalow market since the Chinese New Year period.

On Sentosa Cove, foreign interest is returning, with potential buyers from places like China, Indonesia and India. They come from a range of backgrounds, including, industrialists (eg in the coal-mining industry) and even developers from China. Some have children studying in Singapore while others find Singapore an interesting global city. They believe there’s room for substantial price appreciation in Singapore bungalow prices.

On the GCB front, Coldwell Banker Realtors managing director Alexs Chua said although transaction volumes have slipped, transacted prices are generally holding well.

‘Some sellers are revising their prices now – not because prices are set to fall but rather they have realised they had overpriced right from the start. In the prime GCB locations such as Nassim, Dalvey or Tanglin, sellers would rather withdraw their properties from the market than lower their prices.

‘However, in the less prime GCB estates where demand is not as strong, some sellers have adjusted their asking prices and usually these are the motivated ones. Those who don’t need to sell their GCBs acknowledge that this is not exactly the best time to do so,’ he added.

Under the ABSD regime, PRs pay 3 per cent ABSD on their second and subsequent residential property while Singaporeans pay the same ABSD rate on their third and subsequent residential property. Foreigners, however, must pay 10 per cent ABSD on any residential property purchased in Singapore.

Source: Business Times – 1 March 2012

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