Han Huan Mei, director of research at List Sotheby’s International Realty, reveals that the Good Class Bungalows (GCBs) market has experienced significant growth this year compared to 2023 in the exclusive world of the ultra-rich.
According to data from URA Realis as of Dec 20, there were 22 GCB transactions worth $612.05 million. Additionally, there were 13 more GCB deals worth over $700 million that were completed this year without official caveats, as buyers preferred to maintain their anonymity. This brings the estimated total for 2024 to 35 GCB transactions valued at around $1.32 billion, surpassing the previous high of $1.186 billion in 2022.
On the other hand, in 2023, there were only 18 GCB transactions totaling $432.5 million – the lowest number recorded since URA Realis began keeping this data in January 1995.
“This shows that the GCB market has been more active than what the official transaction data reveals,” says Han. “It also highlights the highly sought-after status of GCBs among ultra-high-net-worth buyers.”
Top GCB Deals
The most expensive GCB sold was a property at Tanglin Hill for $93.888 million. The freehold site spans 15,150 sq ft and boasts a built-up area of 29,660 sq ft. This transaction 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 document searches. However, no caveat was lodged for this property. Based on the land area of 28,111 sq ft, the price translates to a land rate of $2,988 psf.
Based on the officially lodged caveats, the highest-priced deal was for a GCB on Cluny Hill which sold for $52 million. The freehold property has a land area of 15,141 sq ft and is relatively new, fetching a land rate of $3,434 psf.
Another notable deal was the sale of a 21,116 sq ft GCB plot at Astrid Hill for $49 million ($2,321 psf) in July. The property was reportedly purchased by Glenn Kuok, nephew of Kuok Khoon Hong, chairman and CEO of Wilmar International. This price 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 Most Sought-After
According to Sandrasegeran, 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. Sixteen of the recorded GCB transactions this year took place in prime District 10, including the coveted Tanglin, Bukit Timah, and Holland Road areas.
Sustained Buying Activity
Sandrasegeran also observes that GCB transactions were evenly spread throughout the year, with buying activity picking up from July. “This indicates sustained buying interest for these trophy properties despite external economic factors such as inflationary pressures and high-interest rates in the first eight months of the year,” he adds.
The Rise in Interest Rates Drives Buying Sentiment
Steve Tay, co-founder, and executive director of his eponymous boutique luxury agency in Singapore, attributes the increase in buying sentiment in the GCB market during the second half of the year to the trajectory of interest rates signalled by the US Federal Reserve (Fed), rather than the rate cuts themselves.
The Fed implemented three rate cuts this year: a 50 basis point reduction in September, 25 basis point reduction in November, and a 25 basis point reduction on December 18.
Tay shares that most GCB buyers who had previously been holding back on their purchases engaged in more serious discussions from July onwards, with most deals closing in the last quarter of this year.
The Impact of the Money Laundering Crackdown
The GCB market saw a slowdown last year as buyers retreated following the island-wide arrests of suspects in Singapore’s biggest money laundering case, according to 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.
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“Transactions also took longer to close due to heightened scrutiny and stricter checks on buyers’ identities and sources of funds.”
Emerging Wealthy Take the Stage
Tay says that a new generation of ultra-wealthy Singaporeans has emerged in the GCB market in recent years, with many young and successful entrepreneurs who have made their fortunes in technology, finance, commodities, and F&B businesses.
Furthermore, newly naturalized ultra-wealthy Singaporeans also contribute to the exclusive pool of GCB buyers who prefer large plots in prime districts. However, the number of naturalized citizens purchasing GCBs remains low compared to local wealthy individuals, says Tay.
Cost of Building a New GCB
Research by List Sotheby’s estimates that the cost of developing a new GCB from scratch is about $1,000 psf, with construction taking several years to complete. Hence, most buyers prefer relatively new bungalows in move-in condition to minimize renovation work, observes Han.
Positive Momentum Expected to Continue
According to Sandrasegeran of SRI, the GCB market is likely to maintain its positive momentum, with demand from ultra-high-net-worth individuals driving high-value transactions. However, the preference for privacy among GCB buyers and sellers could result in continued off-market transactions, making it more challenging to track market activity.