The good class bungalow (GCB) market reported an improvement in sales during the first quarter, with sellers lowering their asking prices to attract buyers, reported The Business Times.
“Owners who bought GCBs several years ago have found it profitable to sell at today’s prices rather than later, in view of the uncertainties in the economic outlook,” said Douglas Wong, Head of Luxury Homes at CBRE Realty Associates.
Based on CBRE data, there were nine transactions collectively valued at $209 million in Q1 2016. In the previous quarter, the number of deals was the same, but it only reached $161 million, while there were only four sales in Q1 2015 with a combined value of $95 million.
However, prices of these exclusive landed homes are estimated to have declined by nearly 15 percent from their peak in 2013, said Realstar Premier Group Managing Director William Wong, adding that prices could also see another marginal drop of two to five percent as a few GCBs were recently sold at below market valuations.
CBRE’s Wong also expects prices to fall slightly for the rest of 2016, given a build-up in pent-up demand and the strong holding power of most owners.
“When owners lower their price expectations, buyers who have identified a property they fancy will start biting, in the fear that someone else may beat them to it and they’ll miss the (chance) to buy their dream home. When buyers jump into the market in this fashion, owners will start to hold prices,” he explained.
Looking ahead, CBRE expects a total of 30 to 35 GCB transactions for the whole of 2016 versus last year’s 33 deals, with an overall value of $715 million.
On the other hand, Realstar predicts a 20 to 30 percent growth in volume, while total sales value may rise by just 20 percent due to the lower prices of some GCBs sold earlier this year.
Newsman Realty Managing Director KH Tan, who has noticed an increase in GCB viewings recently, forecasts that prices could increase by five percent for the entire year.
“We’re receiving more serious offers, unlike in Q4 last year, when many potential buyers were still throwing low-ball numbers at owners.”