Good Class Bungalows - tracking the wealth of a nation

Like art and antiquities, the limited supply and nature of GCBs prioritises price appreciation over yield.

GOOD Class Bungalows (GCB) are landed properties located in 39 designated areas in Singapore.

These areas have been defined by the Urban Redevelopment Authority (URA) as GCB Areas (GCBAs), and if a property is located within these designations, they will have to conform to land and development guidelines set by the authorities. And if one were to further break this down by street name, they are found in 102 of them.

To the layman, the most frequently used description of a GCB is one that is in prime districts, sporting an area of at least 15,000 square feet (sq ft) - or 1,400 square metres (sq m), to be precise - and, being landed, would mainly be owned by Singaporeans. While that is not exactly an all-encompassing definition of what a GCB is, it is nevertheless good enough for the layman.

It should also be noted that there are landed properties in GCBAs being counted as GCBs if their land sizes are below 1,400 sq m.

Daily conversations about property prices have often concentrated on the non-landed segment of the market with occasional talk about landed properties - and even then, it usually centres on terraces. Very seldom does one hear of GCBs being the topic of conversation. Perhaps because of this, very few actually realise how stellar a performance this segment of the landed property market has seen over the years.


The stock of GCBs here has been a subject of debate by market observers. The mid-range is about 2,800 units which we will use as the count of such properties here. This accounts for only 0.7 per cent of our total island-wide stock of about 411,000 private residential properties (as of Q4 2020) or 3.8 per cent of all landed private residential stock.

The fact that these freehold or 999-year property types make up just 0.7 per cent of all private housing stock, and whose numbers are unlikely to increase very much due to the URA's designated areas, means that GCBs are tending towards an asset class very much like fine art and antiquities.

Rental yields will be low (after all, art and antiques, gold and silver do not earn any rental income). Hence, the argument of buying for rental yield is off tangent.


In 2020, there were 34 GCB transactions that were captured in the URA Realis database. All these were in the resale market.

For the year, the total number of resale transactions island-wide for all private residential properties was 10,729. That means GCB transactions made up a mere 0.3 per cent of all transactions.

In contrast, excluding GCBs, the island-wide resale churn for our private residential housing stock was very much higher at 2.6 per cent.

The low churn rate points to the strong holding power of owners, who are very likely captains of their industry, founders of household-name companies, entrepreneurs that drive Singapore's small and medium-sized enterprise (SME) landscape, and/or trustees of legacy wealth.


From 2001 to 2021, land prices for GCBs have been rising at a compounded average growth rate (CAGR) of 7.5 per cent per annum. In contrast, the URA Property Price Index (PPI) for landed properties and non-landed properties registered a CAGR of 3.7 per cent and 3.3 per cent respectively.

This raises questions as to the sensitivity of GCB land prices compared to changes in prices for the other types of private residential properties. GCB land prices rise significantly more than overall landed and non-landed prices. (Note that we are using GCB land prices to compare with strata area selling prices for non-landed properties. Although this is not comparing apples to apples, but over time, it tends to iron out the differences between the two.)

Rental yields for GCBs have been low, below 1 per cent. As most buyers of such properties are ultra-high-net-worth individuals (UHNWIs) who customise it for their own stay, they are not in it for rental income. Therefore, like art and antiquities, the limited supply and the nature of GCBs prioritises price appreciation over yield.


Be that as it may, given the strong holding power of the owners and the scarcity of GCBs, it is interesting to look into the motivation of buyers and sellers of GCBs.

As GCBs are the crème de la crème of residential housing form, they continue to draw individuals who value the pride and prestige of owning one or several of such assets. These buyers are broadly categorised into two groups: economically active Singaporean families (including those who have recently sold their businesses), and naturalised citizens.

The prospect of owning a GCB is especially alluring to the latter group since, unlike other cities, non-Singapore citizens rarely get the approval to own large mansions on the island. Popular locations for this group of buyers include GCBAs close to the Singapore Botanic Gardens, such as Nassim Road, Dalvey Estate and Cluny Hill/Park.

On the other hand, sellers of GCBs could be motivated by several factors - including freeing up asset values which they have held for decades for alternative business and investment opportunities, or for families to share the proceeds among next-generation beneficiaries who could have different aspirations and ambitions.

This is especially so for transactions involving plots that are capable of being subdivided into two or more plots.

In conclusion, GCBs are an asset class representing the wealth and entrepreneurial vitality of a nation. Because valuations of companies in new industries cycles increase substantially, their founders will correspondingly benefit proportionately, monetary wise. When they self-actualise by buying GCBs, prices will reflect their newfound wealth.

GCBs are therefore not only a good hedge against inflation but more importantly, for old wealth, holding onto such an asset would allow such owners to maintain a passive connection to the wealth created in the new economy. The same goes for those who are still economically active today because buying one is akin to buying a perpetual call option on the exponentially rising wealth created in the future economy.

  • Alan Cheong is executive director (research and consultancy) at Savills Singapore, while Galven Tan is deputy managing director (investment sales and capital markets).

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