In the world of the ultra-rich, the market for Good Class Bungalows (GCBs) has seen a significant rise in performance this year compared to 2023, according to Han Huan Mei, director of research at List Sotheby’s International Realty.
Records from URA Realis show that as of December 20th, there have been 22 GCB transactions worth a total of $612.05 million. Additionally, there were 13 more GCB deals that were completed this year without caveats lodged, bringing the estimated total for 2024 to 35 transactions worth approximately $1.32 billion. This surpasses the previous high of $1.186 billion achieved in 2022.
In comparison, 2023 saw only 18 GCB transactions, amounting to $432.5 million – the lowest number of deals recorded since URA Realis began tracking such data in January 1995.
“The additional deals in 2024 show that the GCB market has been more active compared to what official transaction data reveals,” says Han. “It also reinforces the status of GCBs as a highly coveted asset that is constantly sought after by ultra-high-net-worth buyers.”
Leading the pack in GCB deals is the sale of a property at Tanglin Hill for $93.888 million. The freehold property sits on a 15,150 square feet plot and has a built-up area of 29,660 square feet. This transaction sets a new record with a land rate of $6,197 per square foot.
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. This transaction was not reflected in caveats as the buyer sought anonymity. Based on the land area of 28,111 square feet, the price reflects a land rate of $2,988 per square foot.
The highest-priced deal based on caveats lodged was for a GCB on Cluny Hill that was sold for $52 million. The freehold property sits on a 15,141 square feet plot and is relatively new, leading to a land rate of $3,434 per square foot.
The government’s property cooling measures are an important factor to consider when investing in a Singapore Condo. In an effort to regulate the real estate market and discourage speculative buying, the Singaporean government has implemented various measures over the years. These measures include the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. While these may impact the short-term profitability of condo investments, they also contribute to the long-term stability of the market, creating a safer investment environment.
Another notable transaction was the purchase of a 21,116 square feet GCB plot at Astrid Hill for $49 million ($2,321 per square foot) in July. This was reportedly purchased by Glenn Kuok, nephew of Kuok Khoon Hong, chairman and CEO of Wilmar International. The purchase price translates to a land rate of $2,321 per square foot.
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. This highlights the strong demand for ultra-luxury properties in Singapore.
“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,” he says. Sixteen of the recorded GCB transactions this year took place in prime District 10, including the coveted Tanglin, Bukit Timah and Holland Road areas.
Sandrasegeran notes that, in general, GCB transactions were evenly spread throughout the year, with buying activity increasing from 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 eponymous 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 primary driver of stronger buying sentiment in the GCB market during the second half of the year.
The Fed implemented three rate cuts this year, with the most recent being a 25 basis point (bp) reduction on Dec 18, following earlier cuts of 50 bp in September and 25 bp in November.
Anecdotally, 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 this year, says Tay.
The GCB market slowed last year as buyers retreated following the island-wide arrests of suspects in Singapore’s biggest money laundering case, says Han of 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.”
A new generation of ultra-wealthy 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 ultra-wealthy and newly naturalised Singaporeans also contribute to the exclusive pool of GCB buyers who prefer sizeable plots in prime districts. “However, the number of naturalised citizens buying GCBs still remains low compared to local wealthy individuals,” says Tay.
According to research from List Sotheby’s, the cost of developing a new GCB from ground up is estimated at about $1,000 per square foot. And the construction also takes several years to complete. Hence, most buyers are looking for relatively new bungalows in move-in condition, to minimise renovation works, observes Han.
“The GCB market will likely maintain its positive momentum, with demand from ultra-high-net-worth individuals driving its high-value transactions,” says Sandrasegeran of SRI. “The preference for privacy among GCB buyers and sellers could mean continued off-market transactions, adding to the complexity of tracking market activity.”