The year 2023 is one that most realtors dealing in high-priced property would prefer to put behind them. “2023 is a ‘breather year’,” says Julian Yip, managing director of RealStar Premier, which specialises in marketing landed property. According to Yip, landed property transaction volume this year was the lowest in a decade.

Even the top tier of the bungalow segment — the Good Class Bungalows (GCBs) — saw sentiment eroded by global market uncertainty, property cooling measures in April, and the money laundering scandal that imploded in August.

Based on caveats lodged from January to Dec 4, the tally of bungalow transactions, including GCBs in the prime districts (Districts 9, 10, 11, 15 and 21), was 93 units, down 18% from 113 a year ago in 2022, says Han Huan Mei, director of research at List Sotheby’s International Realty,

Read also: Convicted oil tycoon OK Lim to sell his third GCB for $43 mil

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Within the confines of the 39 GCB designated areas, transaction volume for the first 11 months of 2023 shrank 61% to just 17 units, from 44 last year, according to List Sotheby’s.

By sales value, the plunge in bungalow transactions in the GCB areas was more significant — down 66% y-o-y to $406.12 million for 2023 ytd, from $1.186 billion in 2022.

The fall is even steeper when compared to 2021, a record year, which saw 90 bungalow transactions in GCB areas worth over $2.57 billion in sales, according to Han.

Since 2021, however, many sellers have progressively raised their price expectations by as much as 40%, says Steve Tay, co-founder and executive director of the eponymous Steve Tay Real Estate (STRE).

KH Tan, founder and managing director of Newsman Realty, who focuses exclusively on the marketing of luxury bungalows, attributes the contraction in transaction volume to elevated interest rates and GCB prices having risen too fast in the past two years. Another reason is the price gap that emerged as sellers insisted on their asking prices and buyers retreated to the sidelines to wait for a “more opportune time to buy”, he says.

According to Tan, another reason could be the slowdown in the tech sector and the cryptocurrency crash after the collapse of the FTX Crypto Currency Exchange in November 2022. That had in turn dented demand for luxury bungalows from entrepreneurs in the tech and crypto sectors.

Read also: Versace-inspired Good Class Bungalow on Old Holland Road hits the market at $66.7 mil

Standout GCB deals 

While transaction volume and total sales value have slumped, the average transacted price for bungalows in the prime districts increased 6.7% to $2,017 psf in 2023 ytd, from $1,891 psf in 2022, says Han of List Sotheby’s.

Some of the bungalows transacted in 2023 also achieved new highs in their neighbourhood, according to STRE’s Tay. He points to a bungalow on a 14,211 sq ft site at Jalan Harum that he brokered. The property fetched $32.8 million ($2,308 psf) in April, the highest in Oei Tiong Ham Park in terms of absolute price.

Then, in July, a smaller GCB of 8,726 sq ft at Jalan Harum changed hands for $22.8 million ($2,613 psf), the highest psf-price achieved in Oei Tiong Ham Park. RealStar brokered the deal.

Another bungalow brokered by STRE’s Tay was an 11,083 sq ft property at Caldecott Close that changed hands in August for $22 million ($1,985 psf). In July, another bungalow of 10,931 sq ft changed hands for $22.25 million ($2,036 psf). These are the two highest in both absolute and psf prices achieved in the Caldecott Hills Estate.

Based on caveats lodged, the most expensive GCB sold this year was a 16,396 sq ft bungalow at Jalan Asuhan that changed hands for $42 million ($2,562 psf) in May 2023.

The highest psf price achieved was for a bungalow at Woollerton Drive on an 8,646 sq ft, freehold site that fetched $24.4 million or $2,822 psf in March, List Sotheby’s Han says.

Read also: Former minister Mah Bow Tan sells Good Class Bungalow at Holland Rise for $50 mil

“In popular GCB locations, the norm for the land price of a good plot — excluding the value of the house — is above $2,500 psf,” says RealStar’s Yip. “GCBs below $30 million in these areas are rarely available today.”

The most significant GCB deal in 2023 was the sale of a portfolio of three GCBs on Nassim Road by Cuscaden Peak for $206.7 million, or a record $4,500 psf, in April. RealStar brokered the deal.

The portfolio of three GCBs at 42, 42A and 42B Nassim Road was reportedly purchased by members of the Fangiono family of Singapore-listed palm oil company First Resources, which has plantations across Indonesia. Besides buying the portfolio, they purchased another bungalow further up on Nassim Road near the Embassy of the Republic of the Philippines for $88 million ($3,917 psf). No caveats were lodged for these GCB transactions on Nassim Road.

Buying momentum to improve in 2024

The GCB market is expected to improve in 2024 due to “more realistic price expectations” from genuine owners who are motivated to sell their homes, notes STRE’s Tay. “The buyer pool is still healthy; it’s just that they are not prepared to pay a high premium unless the right property shows up and they deem the value fair.” Wealthy Singaporeans and newly naturalised citizens are seeking GCBs with land plots above 30,000 sq ft, which are low in supply, he adds.

RealStar’s Yip is optimistic that transaction volume in the landed property market will pick up in 2024. He expects prices to stabilise next year, and any price change will be range-bound at no more than 5%.

While the April cooling measures have hit buyers in the condos and apartments segment in 2023, Yip reckons those in the GCB market are less affected. That is because the buyers are Singaporeans and naturalised citizens.

“Buying momentum will improve as the price mismatch narrows,” says Yip. “More buyers will start their home-hunting again once the global economy and geopolitical tensions improve, interest rates recede, and inflation is under control.”

Newsman’s Tan forecasts that 2024 could see a recovery in transaction volume to 35 units and prices to stabilise. “Even if prices were to fall, it will be 3% at most,” he reckons. “Many serious potential buyers who have been waiting for prices to drop since 2023 might become impatient as it has not happened and will enter the market to buy,” Tan observes.

‘End of the six-digit monthly rental’

In the GCB market, the money laundering scandal is felt most in the rental segment. In November 2020, Vang Shuiming, also known as Wang Shuiming, and his wife Wang Ruiyan rented a newly completed 17,100 sq ft GCB at Bishopsgate for $150,000 a month, a record rental rate for a GCB. Vang was one of the 10 arrested in the money laundering case.

Another foreigner of Chinese origin, Su Haijin, also arrested as being part of the money laundering syndicate, paid $100,000 monthly to rent a 32,000 sq ft GCB at Ewart Park in 2021. His brother Su Baolin, also arrested, was said to have rented a 15,000 sq ft GCB at Nassim Road for $120,000 a month.

“The rental of over $100,000 a month is almost gone,” says RealStar’s Yip. “Maybe a small handful of beautiful or brand-new GCBs may still be able to command the six-digit monthly rental.”

However, GCB owners who want to find a tenant today have to be willing to adjust their rent downwards by “as much as 20% to 30%”, according to Yip. He reckons that the sweet spot is a monthly rental rate of “not more than $70,000” for a well-renovated GCB of about 15,000 sq ft.

The money laundering scandal has also cast the spotlight on the luxury residential market and the ultra-rich buyers. Hence, some buyers have preferred to stay under the radar “until the saga is over”, according to Yip. “They do not wish to be in the limelight amid the scandal.”

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