In the exclusive world of the ultra-rich, the Good Class Bungalows (GCBs) market has seen a significant increase in performance this year compared to 2023, according to Han Huan Mei, director of research at List Sotheby’s International Realty.
Based on data from URA Realis, there have been 22 GCB transactions worth $612.05 million as of Dec 20. Additionally, another 13 deals, collectively valued at over $700 million, have been completed this year without caveats lodged, as buyers seek anonymity. This brings the estimated total for 2024 to 35 GCB transactions worth approximately $1.32 billion, exceeding the previous high of $1.186 billion achieved in 2022.
In contrast, 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.”
Chart-topping GCB deals
The highest record-breaking deal is the sale of a GCB at Tanglin Hill for $93.888 million. The property, sitting on a freehold site of 15,150 sq ft, has a built-up area of 29,660 sq ft. This transaction sets 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. Although no caveat was lodged for the property, based on the land area of 28,111 sq ft, the price reflects a land rate of $2,988 psf.
The highest-priced deal based on caveats lodged was for a GCB on Cluny Hill that was sold for $52 million. This property, sitting on a freehold plot of 15,141 sq ft, is relatively new, which drove a land rate of $3,434 psf.
Another major 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, highlighting the strong demand for ultra-luxury properties in Singapore.
District 10 remains the most sought-after district
Sandrasegeran points out that 16 of the recorded GCB transactions this year took place in prime District 10, which includes the highly coveted areas of Tanglin, Bukit Timah, and Holland Road.
“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.
Sustained buying activity
According to Sandrasegeran, GCB transactions were evenly spread throughout the year, with buying activity climbing from July onwards. “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 signaled 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: 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.
Money laundering crackdown had a dampening effect on the market
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Han from List Sotheby’s adds that the GCB market slowed down last year as buyers were deterred following the island-wide arrests of suspects in Singapore’s biggest money laundering case.
“The money laundering crackdown had a dampening effect on the market, causing some genuine buyers to pull back to avoid media attention,” she says. “Transactions also took longer to close due to heightened scrutiny and stricter checks on buyers’ identities and sources of funds.”
Up-and-coming wealthy take the stage
According to Tay, 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.
He adds that ultra-wealthy and newly naturalized Singaporeans also contribute to the exclusive pool of GCB buyers who prefer sizable plots in prime districts. However, the number of naturalized citizens buying GCBs still remains low compared to local wealthy individuals.
According to research from List Sotheby’s, the cost of developing a new GCB from the ground up is estimated at about $1,000 psf and takes several years to complete. Hence, most buyers are looking for relatively new bungalows in move-in condition to minimize 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.”