Market for Good Class Bungalows tenacious despite economic headwinds

Demand in the last few years can be attributed to a rise in newly naturalised citizens

Feb 23, 2023

In 2022, 44 bungalow deals in the Good Class Bungalow (GCB) Areas were sealed, going by figures from the caveat database of the Urban Redevelopment Authority (URA).

This is a sharp drop from the 90 deals recorded in 2021. Nevertheless, bungalow prices increased sharply over the same period, showing what ultra-high-net-worth investors are willing to pay because they still see value in them.

The total transaction value of S$1.186 billion in 2022 works out to S$1,870 per square foot (psf) on land area. This land rate is 10.5 per cent higher than the figure of S$1,692 psf in 2021, which is, in turn, 14.6 per cent higher than the S$1,477 psf in 2020. The average price psf does not take into account differences between bungalows in terms of location, size, shape and terrain of the land plot, nor the age and design of the building.

The larger price growth in 2021 was due to the sale of two bungalows at above S$4,000 psf – a new record for the GCB market. In one sale in March 2021, a GCB on a 32,159 square foot (sq ft) plot in Nassim Road was bought by Jin Xiao Qun, wife of Nanofilm Technologies founder Shi Xu, at S$128.8 million or S$4,005 psf. It was reported that the bungalow would be redeveloped.

In the other sale in April 2021, a new bungalow that was still under construction at Cluny Hill was bought by Tommy Ong, founder of Stamped.io, for S$63.7 million or S$4,291 psf. It has a land area of 14,843 sq ft.







While the performance in 2022 seems low compared to 2021, it is still higher than the last low point in 2013 – both in terms of the number of deals and total value. The low point in 2013 followed a series of cooling measures rolled out by the government, including the additional buyer’s stamp duty for investment properties.

The support for demand and value in 2022 and in the last three to five years prior could be attributed to a rise in newly naturalised citizens entering this market compared to 2013, when most of the buyers were mainly from well-to-do local families.

Sales momentum in the GCB market slowed in 2022, partly due to the turn of global economic climate and prolonged uncertainties from geopolitical issues. In addition, due to the increase in GCB prices in 2021, some sellers also raised their expectations.

For example, asking prices for most GCBs were above S$2,000 psf in 2022. Those in more central locations were even seeking prices of S$3,000 psf. As such, GCB prices continued to climb through the year.

Caveat data showed that GCBs in Belmont Park, Cornwall Gardens, Leedon Park and Oei Tiong Ham Park were sold at between S$2,050 psf and S$2,500 psf in 2022, compared to between S$1,350 psf and S$2,050 psf in 2021.

Over at Binjai Park, Kilburn Estate and Swiss Club Road, which are less prime areas by market perception, GCB deals in 2022 were contracted at between S$1,350 psf and S$2,050 psf, compared to a lower range of S$1,300 psf and S$1,550 psf in 2021.

Most of the deals that took place could be attributed to a genuine pool of buyers – mainly locals and newly naturalised citizens – who want to own a prized asset like a GCB for their own occupation. Therefore, the impact of the hike in ABSD in September 2022 on actual buyers is minimal, as most were buying under their first property count.

Rents soar to new heights

The rental market for bungalows in the GCB areas have been grabbing headlines in the past two years. In June 2022, a 12-year-old bungalow in Queen Astrid Park was reportedly leased at S$200,000 a month, or S$2.4 million a year. Statistics from URA showed that a GCB in Dalvey Estate was leased in April for S$150,000 per month; another at Jalan Asuhan (off Dunearn Road) was leased at S$128,000 per month. Through the year, some 40 bungalows were leased at monthly rentals of S$50,000 and above, compared with only 18 in 2021.

These bungalows were able to command super-high rents because they were relatively new, well-designed and may have included designer finishes and fittings.

Their tenants include top management of multinational corporations who need a large residence to entertain clients and visitors, and well-heeled foreigners who are applying for Singapore permanent residency or citizenship.

The reasons for renting a GCB vary from individual to individual. Some Chinese and Europeans are willing to pay a premium to rent a GCB just to experience the lifestyle that it offers. Some who were living in penthouses previously decided to switch to a bigger house as a result of the Covid-19 pandemic.

Our analysis of the rental trend of bungalow clusters in Districts 10, 11 and 21 show that the rate of rental growth picked up significantly from 2020, at the start of the pandemic.



As at 2022, the Botanic Gardens cluster commanded the highest average monthly rent of S$37,000, which is unsurprising because it comprises Cluny Hill, Cluny Park, Dalvey Estate and Nassim Road, which surround the Unesco Heritage Site of Singapore Botanic Gardens.

The next most popular cluster is Tanglin, covering Chatsworth Park and Ridley Park, commanding an average rent of S$33,000 per month. In third place is the Dunearn Road cluster, with an average monthly rent of S$32,000. This cluster includes Bukit Tunggal, Chee Hoon Avenue and Raffles Park.

What lies ahead

With the Federal Reserve’s announcement of a 25-basis-point rate hike on Feb 1, and that “a couple more” rate hikes that would follow, inflationary pressure is still present amid global geopolitical tensions.

Potential buyers are likely to step back and observe the direction and momentum of the global economy in the first half of 2023.

Another factor that could put a temporary pause on sales is the latest increase in buyer’s stamp duty (BSD) announced by the government on Feb 14. It is an effective form of wealth tax – buyers who can afford higher value properties will have to pay a higher stamp duty. That said, we have observed that most GCB buyers have a very long-term view when they commit to buy the property. These are buyers with ample liquidity on the ground, actively looking for reasonably priced assets for their own family’s occupation. Once the initial knee-jerk reaction is over, demand will return as the new BSD rates become the new norm.

A silver lining in the pandemic years is that Singapore managed to establish itself well, gaining a reputation for being a stable financial hub in the Asia-Pacific, with transparent and business-friendly policies and a safe environment for residents. This has attracted the ultra-rich from all over the world to set up family offices (FOs) here.

According to Loh Kia Meng, co-head of private wealth and family office practices at law firm Dentons Rodyk, there were 400 FOs in Singapore in 2020. By 2021, the number had jumped to 700. The Monetary Authority of Singapore disclosed that between January and April 2022, another 143 were added, bringing the total to 843. The total number as of end-2022 has yet to be published, but Loh expects the number to cross 1,200.

It is reasonable to expect that some of these FO applicants would contribute to the demand for GCBs and other luxury homes in Singapore, especially when they meet the qualifying criteria to become permanent residents and citizens.

Our view is that the transaction volume of GCBs in 2023 will remain the same as, if not higher than, in 2022. While prices of GCBs are likely to hold firm, there could still be surprises because the luxury market tends to be sentiment-driven. A case in point is the three freehold bungalows in Nassim Road that have been put on the market by Cuscaden Peak Investments with an asking price of S$5,200 psf. Should there be a keen investor who offers to buy them, the deal will elevate the price horizon of GCBs in 2023.

Han Huan Mei is research director; Steve Tay is senior associate vice-president at List Sotheby’s International Realty