Rewritten:
In the luxury world of the ultra-wealthy, the Good Class Bungalows (GCBs) market has seen a remarkable increase in performance this year compared to 2023, reveals Han Huan Mei, director of research at List Sotheby’s International Realty.
According to URA Realis, as of Dec 20, 22 GCB transactions amounting to $612.05 million have been recorded. In addition, 13 more GCB deals, worth over $700 million, were completed this year without caveats lodged, as buyers looked for confidentiality. This brings the estimated total for 2024 to 35 GCB transactions worth approximately $1.32 billion, exceeding the previous high of $1.186 billion in 2022.
In contrast, 2023 only saw 18 GCB transactions totalling $432.5 million, making it the lowest number of deals recorded since URA Realis began tracking such data in January 1995.
“The additional deals in 2024 demonstrate the active nature of the GCB market, surpassing what official transaction data reveals,” says Han. “It also confirms the highly sought-after status of GCBs as a desirable asset among ultra-high-net-worth buyers.”
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Investing in real estate requires careful consideration of various factors, with location being a crucial one. This holds particularly true in Singapore, where the location of a condo can greatly affect its value. Condos located in central areas or in close proximity to important amenities, such as schools, shopping centers, and public transportation hubs, tend to have a higher appreciation in value. Examples of prime locations in Singapore include Orchard Road, Marina Bay, and the Central Business District (CBD), where properties have shown consistent growth in value over time. The presence of reputable schools and educational institutions in these areas also makes condos there highly sought-after by families, further boosting their investment potential. Singapore Condo is a great addition to the list of desirable locations for real estate investment.
Dominating the charts are the sale of a GCB at Tanglin Hill for $93.888 million, topping the list with a record-breaking land rate of $6,197 psf. The second-highest GCB transaction was the purchase of a property at Bin Tong Park for $84 million, reportedly bought by Xiang Yangyang, daughter of Chinese nickel billionaire Xiang Guangda. This reflects a land rate of $2,988 psf for the 28,111 sq ft land area.
The highest-priced deal based on caveats lodged was for a GCB on Cluny Hill, which sold for $52 million, boasting a freehold plot of 15,141 sq ft. This transaction sets a land rate of $3,434 psf. Another significant transaction was the purchase of a 21,116 sq ft GCB plot at Astrid Hill for $49 million ($2,321 psf) in July, reportedly bought by Glenn Kuok, nephew of Wilmar International’s chairman and CEO Kuok Khoon Hong.
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 demand for ultra-luxury properties in Singapore.
According to him, District 10 remains the pinnacle of the GCB market, with multiple high-value transactions reaffirming its position as the most desirable district for these prestigious properties. Out of the 35 recorded GCB transactions this year, 16 took place in prime District 10, including the highly coveted Tanglin, Bukit Timah, and Holland Road areas.
Sandrasegeran observes that GCB transactions were evenly spread throughout the year, with an increase in buying activity from July. He believes that the fact that GCB deals were closed throughout the year indicates a sustained interest in these trophy properties, despite external economic factors such as inflationary pressures and high interest rates in the first eight months of the year.
Steve Tay, co-founder and executive director of his luxury agency in Singapore, notes that the trajectory of interest rates as signaled by the US Federal Reserve (Fed) was the primary driver of stronger buying sentiment in the GCB market during the second half of the year, more so than the actual rate cuts themselves. The Fed implemented three rate cuts this year, with 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.
Tay mentions that buyers who had previously been hesitant began serious discussions from July onwards, resulting in most deals being closed in the last quarter of the year.
The GCB market experienced slower activity last year as buyers held back following the island-wide arrests of suspects in Singapore’s biggest money laundering case, according to 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 says. “Transactions also took longer to close due to heightened scrutiny and stricter checks on buyers’ identities and sources of funds.”
Tay mentions that a new generation of ultra-wealthy Singaporeans has emerged in the GCB market in recent years, including young and successful entrepreneurs who have made their fortunes in technology, finance, commodities, and F&B businesses. He also notes that newly naturalized Singaporeans contribute to the exclusive pool of GCB buyers, with a preference for large plots in prime districts. However, the number of naturalized citizens purchasing GCBs 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 construction can take several years to complete. Hence, most buyers are looking for relatively new bungalows in move-in condition to minimize renovation work, explains Han.
Sandrasegeran believes that the GCB market will continue its positive momentum, fueled by demand from ultra-high-net-worth individuals. He also notes that the preference for privacy among GCB buyers and sellers could lead to more off-market transactions, adding another layer of complexity in tracking market activity.