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PROPERTY: Demand for bungalow sites expected to rise

Landed home prices likely to continue last year’s surge and jump by up to 15% this year, say analysts

PROPERTY analysts believe this will be the year for mid- and mass-market properties to shine – but they say demand for landed homes should also remain favourable.

They expect prices of landed homes to climb by 10 per cent or even as much as 15 per cent this year.

That sort of rise may not be spectacular but is still substantial as it comes off a high base last year, when prices of such homes are estimated to have risen 25 per cent to 27 per cent, according to property consultancy Knight Frank.

A year earlier, in 2006, the price climb was just 6.7 per cent.

‘The landed home sector was a laggard compared with non-landed homes,’ says Knight Frank director of research and consultancy Nicholas Mak. ‘It started to pick up last year when people noticed that it was slightly undervalued.’

Good-class bungalows, in particular, attracted strong demand as wealthy homebuyers zeroed in on these large and exclusive houses in prime districts.

But demand for smaller bungalows remains fairly strong too as such properties are limited in supply, says Ms Grace Ng, the deputy managing director of agency and business services at Colliers International.

And what supply there was has dwindled. Many have been redeveloped into semi-detached and terrace houses as a result of the favourable property market conditions of the past two years, she said.

Bungalow sites do not come along often, but there are a few available at this month’s auctions.

Ms Ng said Colliers has a distinctive bungalow that will be put up for sale this month. Located in the Siglap area, the two-storey bungalow has an ‘English cottage’ architectural design and is one of the few bungalows in the area.

The design was inspired by the houses the owner and her late husband saw during their postgraduate years in Britain.

The 4,695 sq ft property – in its original condition – was built in the 1950s and has an indicative price of $3.6 million or $766 per sq ft (psf).

Recent transactions in the same area – district 15 – ranged between $650 psf and $780 psf for two-storey detached houses.

Two large bungalow sites aimed at small developers or investors are also up for auction, at other houses.

One is in Branksome Road, off Tanjong Katong Road. It has a land area of 12,847 sq ft and an indicative value of $900 psf to $950 psf.

Ms Mok Sze Sze, the head of auctions at Jones Lang LaSalle, said this site has the potential to be redeveloped into a conventional landed project or a cluster housing project with six to eight units.

Cluster bungalows in the area are going for about $3.6 million to $4 million each, she said.

Knight Frank too will be auctioning a landed property, at the end of the month: a 14,170 sq ft site in Clacton Road off Meyer Road. It has an indicative value of $1,000 psf to $1,200 psf and can be redeveloped into three bungalows, said the firm’s executive director (auctions), Ms Mary Sai.

Recently, demand for landed homes has also come from those who pocketed lump sums in cash from collective sales, said Mr Mak.

‘Landed homes have always been a different class because foreigners can’t buy them,’ he said.

The market is much smaller than that for condominiums and apartments, which also means it will not be as liquid, said Mr Mak.

In addition, buyers nowadays are not prepared to pay too high a price above valuation, said Ms Ng of Colliers International.

This is due to high construction costs, cautious market sentiment, and the steep price increase over the past two years, she said.

 

Source: The Sunday Times 13 Jan 08

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