Excellent year for the GCB market

Excellent year for the GCB market
Dec 17, 2009 - PropertyGuru.com.sg

The Good Class Bungalow (GCB) market recorded 100 transactions in the first 11 months of 2009, which is worth $1.6 billion in totality.

The figure, which is based on analysis done by CB Richard Ellis (CBRE), is nearly double the $827 million, or 51 deals valued for 2008.

The value also exceeded the $1.23 billion total value transacted in 2006, but the number of transactions this year is still lower than the recorded 119 deals in 2006.

According to Credo Real Estate, GCB prices could have increased 5 to 10 percent this year. In addition, the real estate company estimates a further 5 to 15 percent GCB price projection by 2010. “Current GCB prices are not far off the peak levels established between mid-2007 and mid-2008,” said Credo Real Estate managing director, Karamjit Singh.

The GCB market is expected to remain strong next year as the Singapore economy recovers and as the country attracts more wealthy citizens. But some observers expect a small slide in transactions as strong demand increased earlier this year after a year of brisk sales.

CBRE director for luxury homes, Douglas Wong, predicted 80 to 90 GCB deals in 2010 worth $1.2-$1.4 billion.

William Wong, managing director for RealStar Premier Property Consultant, foresees easing numbers of GCB deals next year. “Demand is still strong, but the pool of buyers right now is not as big as, say, earlier this year. Most of those who wanted to buy a GCB have already bought this year, so demand has been substantially satisfied for now.”

“Of course, the buying pool may expand again, for instance, as more high net worths from overseas become Singapore citizens,” he added.

A positive Mr. Singh noted, “Demand for GCBs is poised to remain robust as Singapore's economy begins to grow again and the rich get to feel richer. GCBs are also popular investment tools played by seasoned high net worth individual investors when they smell capital appreciation potential.”

This year’s strong response was largely due to buyers who decided to make a commitment before home prices further increased, said Mr. Wong. This is amid the sudden improvement in real estate market sentiment when the stock market recovered.