Pvt. Property: Good Class Bungalows (GCBs)

Good Class Bungalows (GCBs) are the crème de la crème of Singapore real estate. Typically among the most expensive homes, they provide their owners with the semblance of a sanctuary in land-scarce Singapore. Their popularity can be attributed to the government’s efforts to keep them as exclusive as possible through the use of stringent regulation and controls. The following should come to mind the next time you hear the term ‘GCB’:

  1. Estimated less than 2,500 GCBs in Singapore
  2. Minimum land size of 1,400 square meters (or 15,070 sq ft)
  3. Maximum height of 2 storeys

GCB AreasAs you can see, there are only 39 GCB areas in Singapore and the estate’s environment is an important factor. For that reason, houses built in such area cannot take up more than 35% of the land area. This is to ensure that there are adequate green buffers between the houses.

The most famous (by that, I mean expensive) areas are those in Nassim, Cluny, Bishopsgate, Whitehouse Park, Leedon Park, Chatsworth and Rochalie. Bungalows in these areas can fetch up from S$1,200 to S$1,400 per square foot.

With the exception of Sentosa Cove, foreigners cannot own GCBs. They can only be purchased by Singaporeans and Permanent Residents (PRs). Hollywood star Jet Li made news here when he bought one at Binjai Park for S$19.8 million after receiving his PR status. Interestingly, the previous owner made a loss on that sale, having purchased the bungalow for S$21 million previously.

INVESTING IN GCBs

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The prices of GCBs, as with other real estate, were adversely affected during the 2008 recession. However, their prices recovered faster compared to the rest. This has led to the perception that GCBs are (relatively) recession-proof investments. According to several reports, GCBs and super-luxurious condos are often seen as the leading barometers of health of the real estate market. The market takes a cue from the purchase of GCBs. The fact that someone is willing to invest $20 million into the real estate market seems to instil confidence in other investors.

Last year, there were over 100 transactions amounting to S$1.59 billion involving GCBs. This was the most active year since authorities started collecting data in 1996. 20 GCBs were sold for S$20 million and above in 2009. To place that in perspective, consider the fact that there were 12 such transactions in 2008, 9 in 2007 and only 4 in 2006. In fact, a new record was set in the S$35.5 million sale of a GCB at upscale Leedon Park near Holland Road. At 25,231 sq ft, that means the price per square foot came to a cool $1,407.

FACTORS AFFECTING THE VALUE OF GCBs

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1. Location

As mentioned, certain locations are prized above others. The most popular areas can be found, as expected, near the city center.

2. Land Size

The shape of the land is another important consideration. The land would be worth more if it’s a regular shape, such as a rectangle, rather than irregular. Terrain, frontage and potential for sub-dividing are some other factors.

3. Actual House

Before the escalation of construction costs in 2007, the actual bungalow itself comprised 20-25% of the value of the estate. Now, it makes up some 25%-30%. There’s also a premium if you have a built-in swimming pool.

GCB BUYING TIPS

If you’re one of the lucky ones considering purchasing a GCB, please conduct the proper checks before signing on the dotted line.

  • Not all properties with a land size of more than 1,400 sq m are GCBs! Your first stop should be the Urban Redevelopment clip_image006Authority (URA) to check if the property is in an area designated for GCBs.
  • Some properties fall under the property conservation scheme and cannot be torn down or rebuilt. Most of these are older properties with colonial architecture.
  • As mentioned, PRs can purchase GCBs. However, they have to seek permission for the relevant authorities first and the maximum size is capped at 1,400 sq m. Moreover, PRs are not allowed to purchase a GCB that has more than one year of tenancy remaining.
  • Call in a surveyor to assess and ascertain the site for boundary issues such as encroachment
  • A structural surveyor should also check the structural integrity of the house
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2 thoughts on “Pvt. Property: Good Class Bungalows (GCBs)

  1. Pingback: HDB: Renting Procedures in Singapore « Agent Fai on Property in Singapore

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