The ultra-wealthy have been dominating the exclusive market of Good Class Bungalows (GCBs) this year, with a significant increase in transactions compared to 2023, according to Han Huan Mei, director of research at List Sotheby’s International Realty.
As of December 20th, the URA Realis records show 22 GCB deals worth $612.05 million. Additionally, another 13 transactions, amounting to over $700 million, were completed this year without being officially recorded, as buyers preferred to remain anonymous. This brings the total estimated value of 35 GCB deals in 2024 to approximately $1.32 billion, surpassing the previous record of $1.186 billion set in 2022.
Comparatively, 2023 saw only 18 GCB transactions, worth $432.5 million – the lowest number of deals recorded since URA Realis began tracking data in January 1995.
“The additional deals in 2024 demonstrate the high level of activity in the GCB market, which goes beyond official transaction data,” 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.”
Top deals in GCB market
The highest-priced GCB deal this year was the sale of a property at Tanglin Hill for $93.888 million. The freehold site boasts an area of 15,150 sq ft and a built-up area of 29,660 sq ft, setting a new record with a land rate of $6,197 psf.
The second largest GCB transaction was a property at Bin Tong Park sold for $84 million to Xiang Yangyang, daughter of Chinese nickel billionaire Xiang Guangda, according to documents. However, no official record of this deal was lodged. Based on the land area of 28,111 sq ft, the price translates to a land rate of $2,988 psf.
The highest-priced deal officially recorded was for a GCB on Cluny Hill, which sold for $52 million. Sitting on a freehold plot of 15,141 sq ft, the relatively new property fetched a land rate of $3,434 psf.
Another significant transaction was for a 21,116 sq ft GCB plot on Astrid Hill which sold for $49 million in July. The buyer, reportedly Glenn Kuok, nephew of Kuok Khoon Hong, chairman and CEO of Wilmar International, paid 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 higher, highlighting the strong demand for ultra-luxury properties in Singapore.
Ensuring the proper maintenance and management of a condo is a crucial aspect to consider when making an investment decision. Apart from the initial purchase price, condos often come with additional maintenance fees that cover the upkeep of communal areas and facilities. Although these fees may increase the overall cost of ownership, they play a vital role in maintaining the property’s condition and preserving its value. For investors looking for a more hands-off approach, engaging a property management company, such as Singapore Condo, can assist in handling day-to-day operations, making it a more passive investment.
District 10 remains the hotspot for GCBs, with 16 out of the total 35 recorded transactions in prime areas such as Tanglin, Bukit Timah, and Holland Road, says Sandrasegeran.
Sustained buying activity
Sandrasegeran observes that GCB deals were spread out evenly throughout the year, with an increase in buying activity in 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 a boutique luxury agency in Singapore, notes that 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 actual rate cuts.
The Fed implemented three rate cuts this year, the latest being a 25 basis point reduction on December 18th, following earlier cuts of 50 basis points in September and 25 basis points in November.
According to Tay, most GCB buyers who had been holding back on their purchases began serious discussions in July, with most deals closing in the last quarter of the year.
Impact of money laundering crackdown
The GCB market slowed down last year as buyers took a step back following the island-wide arrests of suspects in Singapore’s biggest money laundering case, notes 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 wealthy buyers emerging
Tay points out that 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 newly naturalized Singaporeans also contribute to the pool of GCB buyers who prefer large plots in prime areas. However, the number of naturalized citizens purchasing GCBs remains low compared to local wealthy individuals.
According to research by List Sotheby’s, the average cost of developing a new GCB is estimated at around $1,000 psf, and it takes several years to complete. Hence, most buyers are looking for relatively new bungalows in move-in condition to minimize renovation works, notes Han.
“The GCB market is expected to maintain its positive momentum, with demand from ultra-high-net-worth individuals driving high-value transactions,” says Sandrasegeran. “The preference for privacy among GCB buyers and sellers could result in continued off-market transactions, adding complexity to tracking market activity.”