Good Class Bungalows Fetch Record Prices
The bungalow of HDB’s former chairman was sold last year for nearly $94 million. (Photo: JLL)
Despite a slowdown in the property market, prices of Singapore’s good class bungalows (GCBs) continue to soar to record heights even though foreigners are not allowed to acquire this type of asset, reported Bloomberg.
With just about 2,500 units across the city-state, GCBs – which can only be purchased by Singapore citizens – range from colonial era homes to architect-designed modern houses with expansive landscaped gardens, cantilevered verandas and infinity pools.
Aside from the citizenship requirement, GCBs must have a land area of 1,400 sq m, with the house – which should not be more than two storeys high – taking up not more than 35 percent of the site.
A recent blockbuster deal saw Hong Kong-based oil trader Winson Group chairman Tony Tung acquire a bungalow located near the Botanic Gardens for $105.3 million – reportedly a record price for a GCB.
A Singaporean member of the Tsai family, who made a fortune out of insurance in Taiwan, also purchased a bungalow for $93.9 million.
Market watchers expect more records to be broken soon. In fact, a bungalow near the Botanic Gardens is set to enter the market with an asking price of $3,500 psf – surpassing the previous record set last year at $2,700 psf, revealed KH Tan, managing director at Newsman Realty, which is handling the sale.
“Due to scarcity and exclusivity, the GCB market has always been regarded as the jewel of the residential market and a coveted trophy asset to the well-heeled community,” said CBRE director of capital markets Sammi Lim. “GCBs have proven to be a resilient asset class through market cycles.”
This seems to be the case again as Singapore home prices have been on the downtrend lately following the government’s release of additional property cooling measures last year. In the three months ended 31 December 2018, home prices dipped 0.1 percent, ending five consecutive quarterly gains.
The growing number of millionaires in the city-state also helped underpin activity in this market segment. CBRE revealed that the number of GCB transactions rose 47 percent in the second half of 2018 from H1 2018.
Typical buyers of GCBs are super-wealthy locals as well as foreigners who have received their citizenship, said Tan.
“The super rich want to buy the best diamond, the best car, so in Singapore residential, the Good Class Bungalow is the best you can get,” noted Tan.