In the world of the super wealthy, the Good Class Bungalows (GCBs) market has surpassed expectations this year compared to the previous year, according to Han Huan Mei, director of research at List Sotheby’s International Realty. As of December 20, 22 GCB transactions worth $612.05 million were lodged with URA Realis. In addition, 13 more GCB deals, worth over $700 million, were completed without caveats being lodged, as buyers preferred to remain anonymous. This puts the estimated total for 2024 at 35 GCB transactions worth approximately $1.32 billion, surpassing the previous high of $1.186 billion achieved in 2022.
In comparison, only 18 GCB transactions were recorded in 2023, amounting to $432.5 million – the lowest number of deals since URA Realis began keeping track in January 1995.
“The additional deals in 2024 show that the GCB market has been more active compared to what official transaction data reveals,” Han points out. “It also reinforces the status of GCBs as a highly coveted asset that is constantly sought after by ultra-high-net-worth buyers.”
Top-ranking GCB deals
The highest-value transaction this year was the sale of a GCB at Tanglin Hill for $93.888 million. This property, occupying a freehold site of 15,150 sq ft, boasts a built-up area of 29,660 sq ft. This deal set a new record with a land rate of $6,197 psf.
The second-largest GCB transaction was the purchase of a property at Bin Tong Park for $84 million by Xiang Yangyang, daughter of Chinese nickel billionaire Xiang Guangda, according to records. However, no caveat was lodged for the property. Based on the land area of 28,111 sq ft, the price translates to a land rate of $2,988 psf.
The highest-priced deal based on caveats lodged was for a GCB on Cluny Hill, which sold for $52 million. Siting on a freehold plot of 15,141 sq ft, the relatively new property fetched a land rate of $3,434 psf.
Another significant transaction was the purchase of a 21,116 sq ft GCB plot at Astrid Hill for $49 million ($2,321 psf) in July. The property is said to have been bought by Glenn Kuok, nephew of Wilmar International’s Chairman and CEO, Kuok Khoon Hong. This translates to a land rate of $2,321 psf.
Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI), notes that at least 14 transactions this year were valued at $20 million or more, highlighting the strong demand for ultra-luxury properties in Singapore.
District 10 remains the top choice
“District 10 remains the cornerstone of the GCB market, with multiple high-value deals reaffirming its status as the most sought-after district for these prestigious properties,” says Sandrasegeran. Sixteen of the recorded GCB transactions this year were located in prime District 10, including Tanglin, Bukit Timah, and Holland Road.
Sustained buying activity
Sandrasegeran observes that GCB transactions were evenly spread throughout the year, with buying activity picking up in July. “Overall, the fact that we saw GCB deals closing throughout the year suggests sustained buying interest for these trophy properties despite external economic factors, such as inflationary pressures and the presence of high interest rates in the first eight months of the year,” he says.
Steve Tay, co-founder and executive director of his boutique luxury agency in Singapore, says that the trajectory of interest rates signalled by the US Federal Reserve (Fed), rather than the rate cuts themselves, was the main driver of stronger buying sentiment in the GCB market in the second half of the year.
The Fed carried out three rate cuts this year, with the most recent being a 25 basis point (bp) reduction on December 18, following earlier cuts of 50 bp in September and 25 bp in November. Tay says that most GCB buyers who had been holding back on their purchases began more serious discussions from July onwards, with most deals closing in the last quarter of the year.
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Money laundering crackdown dampens market in 2023
The GCB market slowed down last year as buyers stepped back following the island-wide arrests of suspects in Singapore’s largest money laundering case, says Han from List Sotheby’s.
“The money laundering crackdown had a dampening effect on the market, causing some genuine buyers to pull back to avoid media attention,” she adds. “Transactions also took longer to close due to heightened scrutiny and stricter checks on buyers’ identities and sources of funds.”
Newly wealthy individuals enter GCB market
A new generation of ultra-rich Singaporeans has emerged in the GCB market in recent years, with a good number of young and successful entrepreneurs who have made their fortunes in technology, finance, commodities, and F&B businesses, says Tay. He adds that newly naturalised Singaporeans with a high net-worth also contribute to the exclusive pool of GCB buyers who prefer large plots in prime districts. However, the number of naturalised citizens buying GCBs remains low compared to local high net-worth individuals, Tay points out.
According to research from List Sotheby’s, the cost of building a new GCB from scratch is estimated at around $1,000 psf, and it takes several years to complete. Therefore, most buyers prefer relatively new bungalows that are ready for move-in, to minimize renovation work, says Han.
“The GCB market is expected to maintain its positive momentum, driven by demand from ultra-high-net-worth individuals,” says Sandrasegeran from SRI. “The preference for privacy among GCB buyers and sellers could mean continued off-market transactions, making it challenging to track market activity.”