2023: Good Class Bungalows Return


During the first eleven months of 2022, the Good Class Bungalow (GCB) Singapore housing market which is home to the country’s priciest houses, had just 43 deals with a combined total revenue of $1.157 billion. This represents a drop of 55% from 2021, when $2.57 billion was exchanged for 90 GCBs.

According to Han Huan Mei, director of research at List Sotheby’s International Realty, “some investors have delayed purchases until estimates of global rate rises become evident due to concerns about the growing cost of financing, greater inflation, and an approaching recession.”
In 2023, we anticipate a slowing in the GCB sales pace. “Next year’s sales won’t be as crazy as they were in 2021,” says GCB specialist and managing director KH Tan of Newsman Realty. It will be very much like this year’s.

According to real estate experts, the dramatic price hikes in bungalows over the last three years may be attributed to the sellers’ persistently rising pricing expectations. As a result of the sale of a 32,160 square foot freehold property in the highly sought-after Nassim Road region for $218.8 million ($4,005 psf), the most significant revisions were made. In absolute terms, this March 2021 GCB transaction was the costliest of all of last year.

Jin Xiao Qun, Dr. Shi Xu’s wife, bought the house. The seller is Sukmawati Widjaja, nicknamed Oei Siu Hoa, whose family runs Sinar Mas Group.

The Nassim Road property was the most expensive GCB in psf terms for one month until Cluny Hill, acquired for $4,291 psf in April 2021, took the title. Tommy Ong, creator of Shopify review app Stamped.io, spent $63.7 million for the GCB while it was still being built. Seller Sebestian Soh, founder and director of Meir Homes, will finish the home for the buyers. Cluny Hill GCB was his first. In 2023, Meir Homes will launch a second GCB.

The Nassim and Cluny districts were the meccas of these record-breaking trades, which kicked off a surge of asset price changes over the whole GCB market. Steve Tay, of List Sotheby’s International Realty, said prices hit a new barrier in 2021 and are unlikely to go below that level.Newsman Realty’s Tan believes that GCB values in Nassim and Cluny, near the Singapore Botanic Gardens, are $4,500 psf to $4,800 psf. Most GCB locations will stabilize, although Nassim and Cluny will “keep rising.”

Requested sums have unquestionably increased. Cuscaden Peak Investments put up for sale three GCBs on Nassim Road in late September. The GCBs are located on lots of between 15,131 and 15,542 square feet, and they are listed for between $78.68 million and $80.82 million, reflecting an average price of $5,200 per square foot. The exclusive marketing firm, RealStar Premier, received three proposals but was prohibited by the terms of the agreements to reveal their contents.
Tan, from Newsman, believes that if the three GCBs on Nassim Road reach $5,000 psf, it will be an industry first.

Expanded market of potential buyers

Tay of List Sotheby’s notes that despite the gloomy macroeconomic forecast, Singapore is “a stable financial centre with clear and business-friendly policies as well as a secure environment for its citizens.” Despite stricter rules enforced by the Monetary Authority of Singapore in regards to a rise in managed assets and the employment of local employees, he adds that a record amount of family office applications have been filed in Singapore, with close to 900 established in 2022 to date.

According to Tay, many people are applying for Singapore permanent residency under the Global Investor Programme (GIP). He claims that some Permanent Residents have also become citizens of Singapore. Those who are able to get Singaporean citizenship will wish to purchase a GCB as a proper residence for their status and familial requirements.
These purchasers, “together with locals, particularly the new generation with recently acquired money, who consider GCBs the peak of landed property and a status symbol coupled with enormous living areas for the families’ demands,” will drive the market for GCBs in 2023, according to Tay.

Ultra-high net-worth individuals (UHNWIs) are relocating to Singapore from all around the world, according to Tan of Newsman. However, he notes, the majority of GCB market participants are from Asia, including China, India, and Indonesia.

For this reason, purchasers are still interested in GCBs that are “priced in accordance with reasonable market values” with regards to their location and land features, as stated by List Sotheby’s Tay. “Most transactions that closed this year included sellers who were prepared to decrease their price expectations in order to match bids from purchasers.”

Tan, of the Newsman, agrees. He claims that “customers were prepared to pay premium pricing for a GCB” in 2017. They are taking more care this year.

Additionally, detached home values have reached all-time highs. In April of this year, a developer on Camborne Road sold a brand-new single-family home for $3,433 psf, despite the fact that the freehold lot was just 4,370 square feet in size. Wong notes that this home sold for the most ever paid for a detached property in Dunearn Estate, located in highly desirable District 11.

This year, a pair of single-family homes on neighboring Cassia Drive fetched $22 million. Both properties were freehold single-family homes; one was located on a 9,973-square-foot lot and sold for $2,206 per square foot in January, whereas the other, which was located on a 10,625-square-foot lot, sold for $2,071 per square foot in April of this year. As compared to the detached home on Oriole Crescent, the land costs for both projects were less expensive.

Wong forecasts a sluggish first half of 2023 for the GCB market but strong second half growth. Despite a possible 20% annual decline in GCB transactions, he predicts that prices will be constant at best and “may even witness a slight gain of 2% to 5%” in the next year.

About the author