In the world of the ultra-wealthy, the market for Good Class Bungalows (GCBs) has been performing exceptionally well this year compared to 2023, according to Han Huan Mei, Director of Research at List Sotheby’s International Realty. As of December 20, 22 GCB transactions totalling $612.05 million have been recorded in URA Realis. Additionally, 13 more GCB deals, with a total value of over $700 million, were completed this year without caveats lodged, as buyers preferred to remain anonymous. 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, there were only 18 GCB transactions in 2023, 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 highlights the high demand for GCBs as a highly coveted asset among ultra-high-net-worth buyers.”
Chart-topping GCB deals
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Leading the pack is the sale of a GCB at Tanglin Hill for $93.888 million. The property, situated on a freehold site measuring 15,150 sq ft, features 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 $84 million purchase at Bin Tong Park by Xiang Yangyang, daughter of Chinese nickel billionaire Xiang Guangda, according to a document search, 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.
Based on caveats lodged, the highest-priced deal was for a GCB on Cluny Hill that changed hands for $52 million. The property sits on a freehold plot of 15,141 sq ft, and is relatively new. Hence, it fetched a land rate of $3,434 psf.
Another big-ticket 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 epicenter of the GCB market, with multiple high-value deals reaffirming its position 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.
Sustained buying activity
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 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: 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.
“In terms of market demand, the money laundering crackdown had an impact, causing some genuine buyers to hold 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.”
Up-and-coming wealthy take the stage
In recent years, a new generation of ultra-wealthy Singaporeans has emerged in the GCB market, with a notable 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 naturalized Singaporeans also contribute to the exclusive pool of GCB buyers who prefer sizeable plots in prime districts. “However, the number of naturalized 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 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 is likely to 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 the complexity of tracking market activity.”