Interest In GCBs Remain Healthy Despite Cooling Measures
HAN Huan Mei
Caveats lodged up to 22 September show that 29 Good Class Bungalows (GCBs) have been sold in the first nine months of 2018. The total investment amount is $639 mil which works out to $1,462 psf on total land area. This compares with the same number of GCB transactions in January-September 2017 which summed up to $587 mil or $1,274 psf. Effectively, it shows that GCB prices in 2018 are some 15% higher than those in the same period in 2017.
The priciest GCB sold in 2017 was the $46 mil property at Queen Astrid Park on a land area of 29, 709 sq ft whereas in 2018, the most expensive GCB to be sold was the $57 mil property at Leedon Road with a sprawling land area of 43,928 sq ft. The Leedon Road property is also the most expensive GCB sold since May 2015 when a GCB at Ridout Road was claimed at nearly $92 mil.
Despite the latest cooling measures which took effect on 6 July, Q3 2018* alone saw 12 GCBs sold, at a combined value of $260 mil compared to eight bungalows sold for $169 mil in the preceding quarter. The higher number of sales in Q3 could be attributed to some owners who had been holding on to their asking prices accepting offers on the table following the July cooling measures.
While deals are likely to take longer to stitch in the coming months, seasoned and long term investors understand that such cooling measures will help to support long term, sustainable price increases. The profiles of owners and investors of GCBs are blue chip with sound balance sheets. We expect forthcoming demand to come from owner-occupiers primarily, with collectors remaining on the prowl for only the best properties that come on the market.
GCBs are classified as “restricted properties” and only Singapore citizens are allowed to buy landed properties in Good Class Bungalow Areas (GCBAs).
There are about 2,800 plots in the 39 gazetted GCBAs. While most of the GCBAs are located in the traditional prime districts of 10 and 11, as well as neighbouring district 21, two other pockets are found outside the prime districts at Chestnut Avenue in Bukit Panjang (district 23) and Windsor Park in Upper Thomson (district 20).
According to the planning guidelines of Singapore’s Urban Redevelopment Authority (URA), the minimum land size of each GCB is 1,400 sqm or about 15,070 sq ft. GCBs are subjected to a height restriction of two storeys although an attic and basement are allowed. In addition, there are special planning parameters for site coverage control and building setbacks to ensure enough open space around each bungalow and to protect the existing exclusive environment of these established bungalow areas.