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PRICES of Singapore’s most desirable homes - good class bungalows (GCBs) - have shot up by about 20 per cent in the first two months of this year alone and are set to climb further.

This follows a record year in 2005, when 104 GCB deals worth about $845 million were recorded, according to property consultancy Savills.

In a report yesterday, another property consultancy, Jones Lang LaSalle, said that the average per sq ft (psf) price of GCBs had increased to $476 psf by mid-February, up from $394 psf in the second half of last year, when prices first showed signs of picking up.

In the first half of last year, average GCB prices were languishing at $375 psf, it said.

And between 2002 and 2004, average GCB prices were just a little higher at about $385 psf, it said.

To qualify as a GCB, the homes must sit on at least 1,400 sq m, or 15,070 sq ft, of land.

They are found only in the 39 areas set aside for their construction, including Nassim Road, Leedon Park and Chatsworth Park.

But a new supply of qualifying land has come from the sub-division of large plots within these areas.

Jones Lang LaSalle’s head of research for South Asia, Dr Chua Yang Liang, said that at least 10 GCB deals have been done so far this year, including a deal for a 15,108 sq ft Ladyhill Road site that came with a house and was sold at $662 psf or $10 million. Just before that, a Bishopsgate site was sold at $579 psf or $9.8 milion.

Most of the deals done last year were between $6 million and $10 million. ‘As the economy picked up in 2005, more transactions above the $10 million mark were recorded,’ said Dr Chua. ‘GCBs are observed to be the first to react positively whenever there is a recovery in the property market.’

GCB buyers are mostly chief executives, high-end professionals and successful businessmen who have the advantage of better market knowledge to help them decide based on where they see the property and business cycles heading, said Dr Chua.

Indeed, said Savills Prestige Homes’ director, Mr Steven Ming: ‘GCB buyers are well-connected businessmen. Obviously, they see something in the market. They see that prices are rising.’

He expects prices to rise by 10 per cent to 15 per cent this year, on the back of an improving economy and the increasing rarity of good quality sites for sale. Knight Frank’s Mr Douglas Wong, who handles GCB deals, also sees a similar double-digit rise this year.

Said Mr Ming: ‘Prices are catching up. For example, in the Swettenham Road area, the GCBs there which cost below $7 million a few years ago are now going for over $9 million.’

In top addresses such as Bishopsgate and Cluny Hill, GCBs that cost around $580 psf last year could cross $600 psf this year, he said.

Source : Straits Times - 23 Mar 2006