In the highly exclusive world of the ultra-rich, the Good Class Bungalows (GCBs) market has seen significant growth this year compared to 2023, reports Han Huan Mei, director of research at List Sotheby’s International Realty.
As of December 20, data from URA Realis shows 22 GCB transactions worth $612.05 million. Additionally, 13 more GCB deals, with a collective value of over $700 million, were completed without caveats being lodged, as buyers sought anonymity. This brings the estimated total for 2024 to 35 GCB transactions worth approximately $1.32 billion, according to List Sotheby’s estimates, surpassing 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 data in January 1995.
“This points to the fact that the GCB market has been more active than what official transaction data reveals,” says Han. “It also reaffirms the coveted status of GCBs as highly desirable assets among ultra-high-net-worth buyers.”
Notable GCB transactions
Leading the pack is the sale of a GCB at Tanglin Hill for a whopping $93.888 million. The property, situated on a freehold land area of 15,150 sq ft, 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 a document search. 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.
Based on caveats lodged, the highest-priced deal was for a GCB on Cluny Hill that changed hands for $52 million. Sitting on a freehold plot of 15,141 sq ft, this relatively new property commanded a land rate of $3,434 psf.
Another significant transaction 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. The purchase 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. This highlights the strong demand for ultra-luxury properties in Singapore.
District 10 remains a key market for GCBs
Sandrasegeran also observes that GCB transactions were evenly spread throughout the year, with buying activity picking up from July. “Overall, the fact that we saw GCB deals closing throughout the year suggests strong buying interest for these top-tier properties despite external economic factors, such as inflation and high interest rates in the first eight months of the year,” he says.
According to Steve Tay, co-founder and executive director of his eponymous boutique luxury agency in Singapore, the trajectory of interest rates signaled by the US Federal Reserve (Fed) was the main driver of stronger buying sentiment in the GCB market during the second half of the year, rather than the rate cuts themselves.
The Fed implemented three rate cuts this year: 50 bp in September, 25 bp in November, and 25 bp in December 18. Anecdotally, Tay says most GCB buyers who were hesitant about making purchases became more serious about discussions from July onwards, with most deals closing in the last quarter of this year.
The GCB market slowed down last year due to buyers holding back following the widespread 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.”
New, up-and-coming wealthy buyers in the market
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 newly naturalized ultra-wealthy Singaporeans also contribute to the exclusive pool of GCB buyers who prefer sizeable plots in prime districts. However, the number of naturalized citizens purchasing GCBs remains low compared to local wealthy individuals, says Tay.
According to research from List Sotheby’s, the cost of developing a new GCB from the ground up is estimated at around $1,000 psf, and construction can take several years to complete. As a result, most buyers prefer relatively new bungalows in move-in condition to minimize renovation works, observes Han.
“The GCB market is likely to continue its positive momentum, with demand from ultra-high-net-worth individuals driving high-value transactions,” says Sandrasegeran of SRI. “The preference for privacy among GCB buyers and sellers may result in continued off-market transactions, making it more challenging to track market activity.”