Good Class Bungalows (GCBs) have long been regarded as a status symbol in Singapore, with numerous myths surrounding them. People talk about how their value never drops, how each one is like a gold mine, and how the government will never demolish them. Is that true? This raises the question: do we place too much importance on GCBs, and why are they so significant?
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What is a Good Class Bungalow (GCB)?
A Good Class Bungalow, often abbreviated as GCB, belongs to the highest tier of Singapore’s residential market.
To qualify as a GCB, a house must have a land area of at least 1,400 square meters (approximately 15,070 square feet), and the bungalow itself is limited to a height of two stories.
That’s not all: GCBs must also be located in the prime residential areas of Districts 10 and 11, or in the bungalow zones of Districts 20, 21, and 23. In total, there are 39 Good Class Bungalow Areas (GCBAs):
- Belmont Park
- Bin Tong Park
- Binjai Park
- Brizay Park
- Bukit Sedap
- Bukit Tunggal
- Caldecott Hill Estate
- Camden Park
- Chatsworth Park
- Chee Hoon Avenue
- Chestnut Avenue
- Cluny Hill
- Cluny Park
- Cornwall Gardens
- Dalvey Estate
- Eng Neo Avenue
- Ewart Park
- First / Third Avenue
- Ford Avenue
- Fourth / Sixth Avenue
- Gallop Road / Woolerton Park
- Garlick Avenue
- Holland Park
- Holland Rise
- Kilburn Estate
- King Albert Park
- Leedon Park
- Maryland Estate
- Nassim Road
- Oei Tiong Ham Park
- Queen Astrid Park
- Raffles Park
- Rebecca Park
- Ridley Park
- Ridout Park
- Swiss Club Road
- Victoria Park
- White House Park
- Windsor Park
It is estimated that there are approximately 2,800 GCB land plots in Singapore. Note that while it’s often said there are around 2,800 GCBs, this isn’t entirely accurate, as a single plot can have multiple bungalows. GCB plots can also be subdivided, as long as the divided plot area is still 1,400 square meters or more.
It’s worth noting that within GCB areas, there are some GCB properties with land areas below 1,400 square meters. These properties existed before the authorities began designating GCB areas about 40 years ago; they are still considered GCBs.
Furthermore, there is a special subset of protected bungalows within the GCB category, such as black-and-white houses. There are only 65 of these houses, and their exteriors cannot be altered. These GCBs are typically owned and rented out by the state, and any renovations, extensions, etc., must first be approved by the government.
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The estate-like scale of GCBs is easily recognizable. This isn’t because the owners want to show off their vast gardens. Some do, but it’s more because the built-up area (i.e., the bungalow itself) cannot exceed 35% of the total land area at the time of construction. Without this rule, we believe some GCB owners would build a garage that could fit 10 cars, spoiling the aesthetic of the GCB areas!
The National Parks Board (NParks) also has some tree conservation areas, and some GCBs fall within these zones. This means owners cannot cut down certain large trees without approval, which is why parts of some plots remain undeveloped.
GCB Buyers Must Be Singapore Citizens (Unless You’re Very Rich)
Singapore Permanent Residents (PRs) may receive an exemption; otherwise, buyers of GCBs need to be Singapore citizens. Since 2012, it has been law that buyers of landed properties must be Singaporean. The government did this to prevent foreigners from accumulating freehold land in Singapore without special approval from the Singapore Land Authority’s Land Dealings Approval Unit (LDAU). (Otherwise, if enough foreigners bought up an entire GCBA, they could establish a sovereign state!)
However, there are exceptions for PRs under the Global Investor Programme (GIP) who have made specific investments in Singapore. Other reasons are also considered.
For example, Robert Kuok’s daughter is Malaysian but holds Singapore PR status. In 2018, she purchased a GCB on Belmont Road for S$43.5 million. (By the way, Malaysian PRs may have an easier time obtaining approval than others.)
You might also know a billionaire inventor named James Dyson, who purchased a GCB near the Singapore Botanic Gardens and established a Dyson factory in Singapore.
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Why Are GCBs So Sought-After?
The reasons are obvious. GCBs are significant status symbols, and it’s uncommon to find (and own) such a large space in Singapore. Besides the limited number of GCBs, no other property offers the level of privacy that a GCB does; neighbors are usually out of sight, and your residence is located in an ultra-low-density area where traffic noise and congestion are almost non-existent. It’s like living in a suburb in Australia.
Owning a GCB can also mean owning a piece of Singapore’s history. The land and some of the bungalows here date back to the colonial era and have remained unchanged for decades.
Among real estate investors, GCBs are considered a good store of value due to their scarcity. As we mentioned above, there are only about 2,800 GCB plots in Singapore, and the actual number of GCBs may be slightly higher. The supply of GCB land has never increased, making it very difficult for their value to fall.
For example, during the economic turmoil from 2017 to 2018 (the US-China trade war and weak economic data from China), the total value of GCB transactions actually increased from about S$888.6 million to S$1.03 billion—a 16% increase between 2017 and 2018.
Therefore, GCBs are seen by the super-rich as good defensive assets that hold their value even during economic downturns, as well as heirlooms to be passed down to future generations.
Where Can You Find the Cheapest and Most Expensive GCBs?
GCBs have their unique characteristics, and for sellers (and even eligible buyers), the price in the area may not matter much. It’s hard to say based on the region. GCBs are such unique and personalized properties that the price difference between two GCBs in the same area can be as high as S$10 million.
That being said, one of the most expensive GCBs in Singapore is likely located on Nassim Road in District 10. The most expensive GCB to date was sold here for S$230 million (sold by Wing Tai Holdings Chairman Cheng Wai Keung). In 2019, a unit at 40 Nassim Road was sold for S$2,977 per square foot, for a total price of about S$175 million.
In contrast, a GCB transaction on Dalvey Road (also in District 10) was completed at only about S$1,804 per square foot, for a total of approximately S$92.9 million.
From this, you can see why it’s difficult to determine if the price in any particular area is “cheap,” as the number of transactions is very low (it’s not every day that someone buys or sells such a property), and the pricing is very different from other residential properties.
Most GCB owners are extremely wealthy, and so are their buyers. Unlike most property owners, they don’t care if their neighbor’s house is S$500 psf cheaper than theirs. Most of them have enough capital to last even through the apocalypse. And their buyers are not the type to haggle over a few million dollars (their stamp duty alone is equivalent to the price of most mass-market condos).
Do GCBs Get Cheaper During a Downturn?
Their prices might even rise during a downturn, as we noted above during the turbulent period of 2017-2018. This is because investors may prefer to invest their wealth in real estate—especially a rare asset like a GCB—rather than stocks and bonds.
As for mortgagee sales, you can basically forget about them. The people with enough money to buy a GCB are among the wealthiest in the world (not just in the country). Some of them don’t even need a loan to buy the property; they might buy it outright and then immediately use it as collateral for a loan to invest in something else. Even in a bad year, many of them can cover all their property expenses.
Therefore, waiting for a GCB to be sold at a discount is like waiting for a billionaire to go bankrupt. It does happen, for instance when children who inherit a GCB want to cash out the property quickly, but it’s by no means something you can count on regularly. Even if someone is desperate to sell, the price of a GCB is unlikely to fall far below market value because there are many super-rich individuals eager to own one.
This is why GCBs will remain a coveted asset for decades to come.
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