Transactions of Singapore’s Most Expensive Homes Back on Track

BY Realty+

Transactions of Singapore’s most expensive homes — the Good Class Bungalow (GCB) market — wilted in 2022, with 43 deals done at a total sales value of $1.157 billion in the first 11 months of the year. This reflects a 55% plunge from the 90 GCBs that changed hands to the tune of $2.57 billion in 2021.

Significant increases in bungalow prices over the past three years were to blame, with sellers constantly raising price expectations, according to property consultants. The biggest round of adjustments came after the sale of a 32,160 sq ft freehold site in the coveted Nassim Road area that fetched $218.8 million ($4,005 psf). Transacted in March 2021, it was the most expensive GCB last year in absolute terms.

The Nassim and Cluny areas were the epicenters of these record-breaking deals and set off a wave of asset repricing that reverberated across the entire GCB market. “Prices reached a new threshold in 2021, and we are unlikely to see GCB values fall below those levels,” says Steve Tay, Senior Associate Vice-President, of List Sotheby’s International Realty.

Asking prices certainly have. In late September, three GCBs at Nassim Road were launched for sale by Cuscaden Peak Investments. The GCBs sit on land sizes ranging from 15,131 sq ft to 15,542 sq ft, with asking prices from $78.68 million to $80.82 million, or an average of $5,200 psf. Three bids were received, although RealStar Premier, the exclusive marketing agency was not at liberty to disclose what they were citing non-closure agreement.

If the three GCBs at Nassim Road cross the $5,000 psf threshold, it will set a new benchmark,” says Newsman’s Tan. In 2022, the most expensive GCB in terms of absolute price was for a single-storey pre-war bungalow at Chancery Lane sitting on a 34,216 sq ft freehold site in prime District 11. The GCB fetched $66.06 million ($1,931 psf), according to a caveat lodged on March 3. And it is the highest psf price in the neighbourhood.

The GCB that scored the highest psf price this year is at White House Park. It changed hands in August for $45.5 million or $3,017 psf. This year, the GCB that registered the lowest psf price was for a 25,272 sq ft, freehold property on Lornie Road that changed hands for $24.8 million ($981 psf) in January. It was the only GCB transaction this year that fell below $1,000 psf. 

While transaction volume in 2022 is half that of the previous year’s, average prices of GCBs sold have increased 11.6% to $1,889 psf from $1,692 psf a year ago, according to List Sotheby’s Han. She expects GCB prices to hold or ease marginally in 2023.

The 5% hike in additional buyer’s stamp duty (ABSD) for Singaporeans buying their second and subsequent property in December 2021 led investors to set aside a higher cash outlay for their purchases, Han says. “Concerns over the rising cost of debt, higher inflation and a looming recession caused some to hold back on acquisitions until projections of global rate hikes become clearer.”

Hence, according to List Sotheby's Tay, GCBs that are “priced in line with fair market valuations” based on location and land attributes continue to be sought after by potential buyers. GCB prices have gone up so rapidly over the past three years that those who found GCBs out of their reach have switched to detached houses with 8,000 sq ft to 12,000 sq ft land area instead. This explains why overall prices of detached houses have appreciated by about 15% for the whole of 2022.

Tags : Transactions Singapore most expensive homes Good Class Bungalow increases prices Steve Tay Senior Associate Vice-President List Sotheby’s International Realty