GCB volumes next year expected to be similar to 2022 levels amid price gap

All eyes are on the trio of Nassim Road bungalows, which, if sold at an expected record price, could raise prices across the GCB market, say agents

Dec 16, 2022

THE volume of transactions in Good Class Bungalow (GCB) areas next year is expected to be about the same as this year, amid a widening price gap between buyers and sellers.

So far this year, there have been 43 deals in GCB areas totalling S$1.16 billion, based on the analysis of URA Realis caveats data downloaded on Dec 13 by List Sotheby’s International Realty (List SIR). (The latest transaction was dated Nov 18.)

This marks a sharp fall from the 90 transactions amounting to S$2.57 billion last year.



Bungalows in GCB areas are the creme de la creme of Singapore’s landed housing market.

GCB agents expect prices to remain generally stable in 2023, though some transactions will be closed at record per-square-foot (psf) prices.

All eyes in the market have been on Cuscaden Peak Investments’ three freehold bungalows in Nassim Road. Talk in the market is that bids of close to S$5,000 psf on land area have been received. Potential buyers who would like to acquire all three bungalows can be expected to ask that the owner amalgamate the three sites to create a plot 45,937 square feet (sq ft) in size, before they exercise the option to purchase. The amalgamation process could take around six months, say observers.

The three bungalows are expected to break the S$4,005 psf record price for bungalow redevelopment land in a GCB area. This was set in March 2021 by Nanofilm Technologies International founder Shi Xu’s wife, Jin Xiao Qun, when she bought an old bungalow on a 32,159 sq ft site along the same road.

The record price on a new-bungalow basis in a GCB area, S$4,291 psf, was also set last year. This was when local technopreneur Tommy Ong bought a freehold bungalow under construction on a 14,843 sq ft plot along Cluny Hill. He paid S$63.7 million for it.

“A successful sale of Cuscaden Peak Investments’ bungalows on Nassim Road at a record psf price will move the needle in terms of market sentiment and elevate GCB pricing expectations,” said Steve Tay of List SIR.

Realstar Premier, the exclusive marketing agent for the three bungalows, declined comment.

List SIR’s analysis shows that the average price in terms of psf of land for deals in GCB areas in the year to date is S$1,889 psf, an increase of 11.6 per cent from S$1,692 psf last year. The 2021 figure was in turn 14.6 per cent higher than 2020’s.

However, these average psf prices do not take into account the differences between bungalows, such as their location, age/condition, built-up area, orientation and terrain, said Han Huan Mei, research director at List SIR.

Like-for-like comparison

Realstar Premier founder William Wong said that to make a more like-for-like comparison, one could study transactions of older bungalows in GCB areas likely to have been bought for redevelopment. This allows a focus purely on land cost without factoring in the condition of the house.

On this basis, Wong said the price of GCB redevelopment land has increased by 20 per cent to 30 per cent this year. This was a slower rise than the increase of 30 per cent to 50 per cent in 2021. In both years, the upper end of the range was mostly for prime locations such as the Cluny and Dalvey areas near the Singapore Botanic Gardens, and the Chatsworth and Tanglin areas near the Orchard belt.

The lower end of the range for price increases has applied to less-prime areas such as the Bukit Timah and Holland stretches.

One generally has to be a Singapore citizen to be allowed to buy a landed property in a GCB area.

Bungalows in the 39 gazetted GCB areas are the most prestigious form of landed housing in Singapore, with strict planning conditions stipulated by the Urban Redevelopment Authority (URA) to preserve their exclusivity and low-rise character.

With only around 2,700 such properties on this island, there is thus “rarity value” to owning one of these homes.

Newsman Realty’s managing director, KH Tan, said: “The buyer-seller price gap this year has widened vis-a-vis 2021. GCB prices shot up last year, easily by 25 to 30 per cent if not more, depending on location; as a result, sellers raised their price expectations this year...

“However, with the Russia-Ukraine war, rising interest rates and global economic slowdown, potential GCB buyers have been more careful this year, and only want to pay fair market value. This is unlike the situation in 2021, when buyers rushed in and were more willing to match sellers’ asking prices, for fear of missing out.”

While some observers brush off the impact of rising interest rates on the well-heeled, Tay of List SIR said: “I think rising interest rates play a big part in terms of buyers’ target quantum in purchasing a GCB, because they do not want to be unduly leveraged and pay a high cost for funds...

“They are also mindful of the higher construction costs and interest rates if they take up a construction loan.”

Agents noted a few changes in the profiles of buyers between this year and the last. “There are far fewer buyers who are in tech and cryptocurrency because these segments were hit this year,” said Tan of Newsman.

Realstar’s Wong had another observation – that newly-minted citizens accounted for a higher percentage of GCB buyers this year than last year.

Besides local ultra-high-net-worth individuals and families, new citizens from China have been actively scouting for GCBs in the past few years.

List SIR’s Tay said: “Moreover, we saw increased interest in GCBs this year from newly-naturalised citizens hailing from Indonesia, Malaysia and India. This trend is likely to continue in 2023.”

While the outlook is likely to remain cautious next year, given the rising interest rates and high inflation amid geopolitical tensions, Singapore has positioned itself well, gaining a reputation for being a stable financial hub, Tay added.

Family offices, PRs and new citizens

He noted that the number of family office applications has gone up in the last few years, with some applicants getting on board the Global Investor Programme, under which they become eligible to apply for Singapore permanent resident (PR) status if they meet the required criteria.

“A percentage of these PRs have also applied to be Singapore citizens. If successful, they will add to the pool of new buyers for GCBs in 2023, especially for bigger plots above 20,000 sq ft, which are limited in supply.”

Tay said he was confident that GCB transaction volumes would remain the same next year as 2022 levels – if not higher.

Mary Sai, executive director of capital markets at Knight Frank Singapore, also said that “there are still a lot of people wanting to park money in the Singapore luxury landed housing market of GCBs”.

“There will still be a price upside in 2023, maybe at a more moderate pace than this year, given all the uncertainties. Buyers will use the high interest rates and weaker macro situation to try and hammer out a good deal for themselves. They are unlikely to pay an excessive premium, unless there is a property they truly like, and it is the only one they have set their eyes on,” she added.

Realstar’s Wong’s advice to potential buyers is: “Prices are unlikely to go south. They will continue to rise, albeit more slowly. If you find something you like with a reasonable price, go for it.”

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