The year 2012 onwards, URA added another caveat to the list: only Singapore citizens can buy GCBs. “GCBs are considered the highest class and most prestigious properties in Singapore,” adds Sunita Gill, CEO and founder of real estate firm Singapore Luxury Homes and group director at Propnex Realty . So appointed from the standpoint of heritage conservation, they also come with some construction restrictions.

“They cannot be built more than two-storeys high, with the exclusion of an attic and a basement,” shares Gill. “This is to ensure the exclusivity and character of such neighbourhoods remain.”

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Despite the Covid-19 pandemic having unsettled the economy in Singapore and around the world, there has recently been a sudden surge of interest in these prized assets.

“Based on statistics released by URA, 2020—when the pandemic first struck—Singapore GCBs outperformed 2019 and the few years before that with 46 bungalow deals done, and the sales momentum continued in 2021,” shares Lewis Cha, executive director of Sotheby's International Realty. Two noteworthy deals made in 2021 include a GCB at Nassim Road that went for $128.8 million in March and another that is under construction at Cluny Hill that was sold at $63.8 million in May.

Cha attributes the resilience of this market segment “to the support coming from existing affluent local families and newly-minted ultra-high-net-worth (UHNW) citizens [individuals with investable assets of at least $30 million]”, who were all the more attracted to Singapore because of how effectively the country has handled the pandemic.

The need for space to accommodate work-from-home and home-based-learning situations pushed a lot of wealthy buyers into the GCB market, adds Gill. It also saw the emergence of two simultaneous scenarios in the GCB segment.

Sellers were pricing their GCBs buyers more realistically in the event they needed to cash out—as the rising sentiment was that the buoyancy in the market wouldn’t last. At the same time, buyers were in the market looking for larger plots that would potentially give them the option to split and redevelop them into two plots, should there be a need to cash out on one.

“This pushed the value of transactions in 2020 up by 14 per cent, to $893 million, when compared to 2019. Also market sentiment has improved in some industries due to the pandemic such as pharmaceuticals, technology and telecommunications, as well as e-commerce, where we are seeing a lot of start-up millionaires. The stock market has also recovered significantly,” says Gill. Low-interest rates and high levels of liquidity have also driven trophy home purchases, adds Cha.

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Regardless, a transaction value of $782 million in 2019 is still a very healthy number in a market that only has 2,700 units for sale. GCBs have held their own even before the pandemic hit, thanks to Singapore’s highly rated lifestyle standards and business atmosphere, says Wong.

“Over the last few years, we have witnessed more and more UHNW individuals relocating their families here. At the same time, many tech firms are also setting up their base or headquarters in Singapore,” says Wong. Such individuals acquire citizenship status here within a span of two to three years, “and as newly minted citizens, they are likely to purchase a GCB”.

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Singapore has also seen a lot of family offices being set up by foreigners with the hope that this could pave the way for some of their family members to become citizens—and thereby qualify for a GCB purchase.

“The increase in family offices and global expansions into Singapore brings with it UHNW citizens such as Sergey Brin (of Alphabet Inc. fame), finance legend Ray Dalio and more. The upward trajectory seen in the Singapore property market as a result of such relocations has also boosted local buyers' confidence to make quick buying decisions given the limited supply of GCBs,” says Gill. “We have even seen many billionaire Singaporeans residing overseas put in offers after virtual viewings,” she adds.

As valuable as these properties may be, there are however some downsides to consider, says Wong. Firstly, buying a GCB requires a huge cash outlay and there are restrictions and penalties, such as additional stamp duty, if the buyer wants to sell within three years of purchase. Company investments in GCBs also have an additional 5 per cent buyer stamp duty on top of the usual 4 per cent.

Buying a GCB means buying into a large plot of land, but that does not necessarily add to the built-up area, says Gill. “The bungalow as a whole or the roofed area cannot take up more than 35 per cent of the plot of land.” Add to that, rental yield for GCBs have historically remained low—below 1 per cent.

But that has not dampened the interest, says Gill. In fact, GCB prices in ultra-prime locations such as Nassim and near the Botanic Gardens could appreciate by 10 to 15 per cent in 2021, while those in prime areas such as Cluny, Dalvey, Chatsworth and Tanglin look may go up by 7 per cent, says Gill.

The not-so-prime areas such as Brizay Park, Old Holland Road, the Binjai and Yarwood areas, are not far behind either with an expected price appreciation of 3 to 5 per cent.

“Given the scarcity of brand-new GCBs in highly sought-after locations, buyers are prepared to pick up older properties for redevelopment, even though construction costs have gone up,” says Gill. In a place like Singapore where a real estate investment is viewed as a viable option for wealth preservation, the bright future for one with a tag of prestige appears to be a no-brainer.

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