In the world of the ultra-rich, the Good Class Bungalows (GCBs) market has shown exceptional performance this year compared to 2023, according to Han Huan Mei, director of research at List Sotheby’s International Realty. As of December 20, data from URA Realis reveals 22 GCB transactions worth a total of $612.05 million. In addition, there were 13 more GCB deals worth over $700 million completed this year, without caveats lodged, as buyers preferred to remain anonymous. This brings the estimated total for 2024 to 35 GCB transactions, amounting to a whopping $1.32 billion, according to List Sotheby’s estimates. This surpasses the previous high of $1.186 billion recorded in 2022.
Comparatively, 2023 only saw 18 GCB transactions, totaling $432.5 million – the lowest number of deals since URA Realis began tracking 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 constantly sought after by ultra-high-net-worth buyers.”
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Top GCB transactions
The most significant transaction was the sale of a GCB at Tanglin Hill for $93.888 million. This property, located on a freehold land of 15,150 sq ft, has a built-up area of 29,660 sq ft. This sale set a new record with a land rate of $6,197 psf. In second place was the purchase of a GCB 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 this property. Based on the land area of 28,111 sq ft, the price translates to a land rate of $2,988 psf.
According to caveats lodged, the highest-priced deal was for a GCB on Cluny Hill, sold for $52 million. This property sits on a freehold land of 15,141 sq ft and is relatively new, thus fetching a land rate of $3,434 psf. Another notable 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 acquired by Glenn Kuok, nephew of Wilmar International’s chairman and CEO, Kuok Khoon Hong. 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.
Strong buying activity
According to Sandrasegeran, GCB transactions were spread evenly throughout the year, with buying activity picking up 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 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 in the second half of the year. The Fed implemented three rate cuts this year, with the most recent being a 25 basis point reduction on December 18, after earlier cuts of 50 basis points in September and 25 basis points in November. Anecdotally, most GCB buyers who had been holding back on their purchases started engaging in more serious discussions from July, with most deals closing in the last quarter of the year, says Tay.
Slowed market in 2023
The GCB market experienced a slowdown 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.”
Emerging wealthy buyers
In recent years, a new generation of ultra-wealthy Singaporeans has emerged in the GCB market, with a significant 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 large 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 around $1,000 psf, and the construction can take several years to complete. Therefore, most buyers are looking for relatively new bungalows in move-in condition to minimize renovation works, observes Han. “The GCB market is expected 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 to the complexity of tracking market activity.”