PropNex Picks

June 15, 2022

Good Class Bungalows Remain Sought After But Limited Availability

The blistering pace of sales of good class bungalows (GCBs) in 2021 has slowed considerably this year and the sales volume looks on track to underperform last year’s bumper transactions.


For year-to-22 May 2022, an estimated 21 GCBs valued at a combined $550.6 million were transacted, according to URA Realis caveat data analysed by PropNex Research. It is unlikely that sales would touch the high of 2021, where 88 GCBs amounting to more than $2.5 billion were sold (see Chart 1). The GCB data compiled by PropNex Research reflects transactions for bungalows sold in GCB Areas (GCBAs).


That the robust sales have cooled this year is unsurprising, as the availability of GCBs for sale has tightened on the back of 2021’s impressive performance. Prospective buyers and GCB owner are also assessing the market following the price growth and strong demand last year.

Chart 1: GCB transactions and total value from 2019 to May 2022*


Source: PropNex Research, URA Realis (*data retrieved 1 June 2022)

Outlook remains positive

Despite the heightened uncertainties and economic headwinds, PropNex’s GCB and Prestige Landed team noted that the buying interest in GCBs remains keen, likely outstripping the supply of properties listed for sale on the market. In Singapore, there are some 2,800 GCBs in 39 gazetted areas – they are the most exclusive private residential properties here and are commonly tightly-held.

Although the sales volume has thinned in the first five months of 2022, the average transacted unit price based on land area has continued to trend up – rising to $1,967 psf compared to $1,685 psf in 2021 (see Graphic 1). Looking ahead, asking prices are also expected to remain firm amid the steady demand and limited stock, said Henry Benjamin Lim, Head of GCB and Prestige Landed.


Graphic 1: Average unit prices comparison

Based on caveats lodged, the top GCB deal in January to May this year was the sale of a property in Chancery Lane for about $66.1 million (see Table 1) – translating to $1,931 psf on land area. The property which sits on a 34,216 sq ft freehold land was reportedly sold to Kelsey Cheng Tan, wife of Kester Tan who is the son of a Filipino tycoon.

The next priciest GCB transacted this year was along Olive Road – in the Caldecott GCB Area - which changed hands for $50.2 million in April. The price works out to $1,800 psf on land area of 27,909 sq ft. Media reports indicated that the buyer is the grandson of the late property magnate and hotelier Wee Thiam Siew.

The GCB deal which achieved the highest unit price on land area thus far in 2022 is in Oriole Crescent at $2,767 psf on land area of about 10,481 sq ft and sale price of $29 million. The freehold property is located in the exclusive Bukit Timah neighbour.


Table 1: Top 10 GCB deals in January to May 2022*


Source: PropNex Research, URA Realis (*data retrieved 1 June 2022)

GCB demand drivers
Most GCB buyers are ultra-high net worth individuals and business owners, including those of tech start-ups. For many Singaporean GCB buyers - especially the new citizens as well as the second to and third generation of the wealthy family - the property is usually their first home purchase and hence they will not be affected by the hike in the additional buyer’s stamp duty (ABSD) in December 2021.

Meanwhile, the impending increase in the property tax rate in Singapore is also not expected to impact GCB sales as buyers tend to be wealthy and would be able to absorb the higher tax. Moreover, they may also expect capital values to rise in the future, thereby mitigating the property tax hike.

In fact, the demand for landed homes could stay elevated as would-be buyers look for more “defensive assets” to park their funds in. Landed homes – particularly GCBs – are in extremely limited supply in land-scarce Singapore, making them a good store of value over time. To this end, freehold GCBs are also seen by owners as a way to preserve and grow wealth as well as legacy planning, by handing down the property to future generations. With inflation climbing higher, residential properties could also be a hedge against inflation risks, as their values tend to appreciate over a period of time.

Chart 2: URA Property Price Indices for Non-Landed and Landed Private Homes

Source: PropNex Research, URA


Looking at the URA property price indices for Non-Landed Private Homes and Landed Private Homes, one could discern that the rate of increase in landed home values has outpaced that of non-landed homes (see Chart 2).

In Q1 2022, landed home prices rose by 4.2% quarter-on-quarter, but non-landed home values fell by a marginal 0.3% from the previous quarter. With index readings of 205.3 for landed homes and 167.9 for non-landed homes – both indices have reached a new peak in Q1 2022.

For the full year 2021, landed home prices jumped by 13.3% (index reading 197 as at Q4 2021) - partly driven by the strong GCB market - while non-landed values rose by 9.8% (index reading 168.4 as at Q4 2021).

Renewed appetite for real estate

As the Singapore economy reopens with the lifting of most Covid-19 restrictions, more investors are expected to return to the market. And Singapore real estate is likely to be a beneficiary of the safe-haven capital flows amid the pandemic-lockdowns and uncertainties around global growth due to the Ukraine-Russia war.

In addition, Singapore – which is projecting a 3% to 5% GDP growth in 2022 – continues to be a highly attractive investment destination, with its stable political environment and currency, pro-business policies, safety, and well-developed infrastructure.

PropNex GCB And Prestige Landed Department has a list of GCBs and Landed Houses for your selection. You may wish to check out this tropical resort-like GCB in Brizay Park that is up for sale. Contact Henry to schedule a viewing today.

More PropNex Picks