Have fewer GCBs, more semi-detached and terrace homes to better meet landed housing dreams

Absence of GCBs will not deter the super-rich from living in Singapore

Jun 18, 2024

IN Singapore, land gets constantly re-purposed to meet evolving needs, including rising housing demand. Sites previously occupied by schools, golf courses, turf clubs and so forth may get re-purposed to build homes and other amenities.

New Housing and Development Board (HDB) flats will be built in prime areas such as the Greater Southern Waterfront and Bukit Timah.

Yet, despite Singapore’s land constraints, 39 areas are gazetted as Good Class Bungalow (GCB) Areas. Bin Tong Park, Dalvey Estate, Nassim Road, Queen Astrid Park, and Swiss Club Road are among them.

The estimated 2,700 detached homes in leafy, low-density GCB Areas are highly coveted. Recently, a brand new Bin Tong Park bungalow, with land area of 28,111 square feet (sq ft) and built-up area of around 18,000 sq ft sold for S$84 million.

The Urban Redevelopment Authority (URA) imposes strict planning conditions for GCB Areas. For example, a minimum plot size of about 15,070 sq ft is stipulated as the planning norm for newly created bungalows in GCB Areas.

Might housing needs be better served by redeveloping landed homes in GCB Areas into condominium units?

Take a detached house that sits on 20,000 sq ft of land and accommodates one household. The said land parcel may be able to house a new apartment block with a gross floor area of 56,000 sq ft and over 50 households, assuming plot ratio of 2.8.

Nonetheless, there may be sound reasons to keep landed homes as a feature of Singapore’s housing market.

Having different housing types and buildings of varying heights provides for a more interesting urban landscape.

Landed housing aspirations

Crucially, many people aspire to live in landed homes. Between Q4 2019 and Q1 2024, prices of private landed homes rose by 39 per cent, outpacing the 31 per cent jump in prices of private non-landed homes.

Among Singapore residents, household sizes are generally shrinking. However, some residents hanker for the usually larger built-in and/or outdoor spaces of landed homes because they spend much time working from home or want a bespoke landed home which is tailor-made to the needs of its occupants.

A landed home with a good mix of communal and individual spaces may also be ideal for multi-generational living.

Perhaps, land plots in GCB Areas can be redesignated for the building of semi-detached and terrace houses in order to optimise land use and help more people realise their landed housing dreams.

As at Q1, there were 73,517 landed homes – roughly unchanged from that of 73,105 units in Q1 2019. Over this period, the number of private condominiums and apartments excluding executive condominiums increased by 13 per cent from 297,839 to 336,883.

Detached, semi-detached and terrace houses made up 15 per cent, 30 per cent and 55 per cent of landed homes in Q1. The most number of landed homes were in Districts 19, 15, 10, 16 and 20.



If every detached home in a GCB Area gets redeveloped into eight houses, the number of landed homes rises by nearly 19,000 units, thereby growing the landed housing stock by over a quarter.

Generally, only Singapore citizens can own landed homes here. The government approved 34 applications in 2022 and 51 applications in 2021 by permanent residents (PRs) seeking to buy landed homes on the Singapore mainland. Non-PR foreigners may buy landed homes in Sentosa Cove and approvals are generally granted.

Growing the stock of landed homes might help anchor talented Singaporeans with landed housing aspirations to home.

Also, if more locals can own a landed home, some may be encouraged to have more children or embrace multiple generations living together. Multi-generational living under one roof could in turn help seniors age with dignity and avoid loneliness.

Taxing GCBs more

Redesignating gazetted GCB Areas for the building of mixed-landed homes may need to be accompanied by policy changes that nudge owners to part with detached homes in GCB Areas.

Property tax is levied based on the Annual Value (AV) of a home. The AV of buildings is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees.

Perhaps, levy landed home owners a surcharge on property tax based on land area, starting with plot sizes exceeding 10,000 sq ft. The surcharge rate can be progressive. For example, apply the rate of 20 per cent for plots of over 10,000 sq ft, 30 per cent for plots above 15,000 sq ft, 40 per cent for plots exceeding 20,000 sq ft and so forth.

Also, to discourage ownership of large landed homes, possibly tax the passing down of large landed homes by the estates of deceased persons.

Will the absence of bungalows in GCB Areas deter multi-millionaires and billionaires who may bring much economic benefit from living here?

Unlikely. Singapore’s stability, ease of doing business, strong banking system, high level of public safety, good healthcare facilities, reputable educational institutions, transport connectivity, swanky country clubs, Michelin-starred restaurants, great shopping, cosmopolitan society and so on should continue to draw the super rich here.

The wealthy can buy detached homes in Sentosa Cove as well as penthouses or multiple units in luxury condominiums. Perhaps, more penthouses with dedicated lifts could be built to address the needs of the wealthy who are concerned about privacy.

Importantly, land is likely better utilised when an uber-rich family occupies 15,000 sq ft of floor area or more in a high-rise building versus the same amount of space in a detached landed home.

Indeed, the luxury apartment segment, which traditionally draws significant interest from non-PR foreigners, may be hurting. Additional Buyer’s Stamp Duty was doubled in April 2023 for non-PR foreigners buying any home here to 60 per cent.

Having rich locals shift from living in bungalows in GCB Areas to luxury condominiums will give a much-needed fillip to high-end condominiums.

Singapore’s urban landscape is constantly changing. Going forward, making bungalows in GCB Areas a relic can help Singapore optimise land usage and improve as a live, work and play destination.

https://www.businesstimes.com.sg/opi...housing-dreams