Although the overall quantity and value of Good Class Bungalow (GCB) transactions in 2019 is predicted to become lower than that of the former year, analysts noticed that this is tendency is anticipated, citing the uncertain financial climate as a potential explanation, reported The Business Times.
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A analysis of URA data by Listing Sotheby’s International Realty (List SIR) reveals that at the year-to-date, 34 deals worth $645.7 million have already been finished in Singapore’s GCB areas.
Market watchers have said that in addition to the above figures, for which buyers made caveats, there’s potentially around $400 million in deals closed last year that weren’t caveated, which might make 2018’s tally to around $1.4 billion.
The Business Times also estimated that so far this year, there are at least 500 million of transactions in GCB areas that have yet to be listed in URA’s Realis system.
They include transactions that weren’t caveated or for which caveats may have not listed lately although not captured by the Realis system because of a time lag.
These matters make the total year-to-date amount to almost $1.15 billion.
Analysts: Dip Because of High Asking Costs And Weaker Market
“That is partly as a result of a cost gap; with owners generally still asking high costs regardless of the weaker economy,” she mentioned. “From the perspective of buyers, who’d incorporate the top brass of companies, they may be adopting a cautious stance regarding weaker business requirements, and delaying their conclusions.”
Newsman Realty managing manager KH Tan said GCB costs in ultra-prime locations such as near the Botanic Gardens and Nassim, have largely increased by 10% this year. Costs from the Holland belt were more stable while people in Bukit Timah area have softened.
“Basically, currently there are just two classes of buyers. First are the newest citizens, that are ready to devote if they find something that they enjoy. Their taste is brand-new bungalows in prime locations such as Nassim and near the Botanic Gardens; hence prices in those areas have increased,” he explained.
“Our local buyers have a tendency to go longer for another GCB areas, and they have a tendency to be a little more cautious to perpetrate as the US-China trade problem remains continuing. When demand is slow, the purchase price may be milder as compared to prime locations.”
Tan additionally believes that transaction volume in 2020 is going to probably be similar to 2019’s degree.
“Local buyers that have set purchases on hold because of the trade war will come back into the market after waiting for a year. New taxpayers that are ready to devote will be purchasing when they see something they enjoy.”
But he noticed that the Additional Buyer’s Stamp Duty (ABSD) remains a major challenge in closing deals.
“Many potential buyers fall the idea of purchasing because of the ABSD for second and next house purchase is quite large.”