Most of us live in flats or condos in buildings that appear to be getting taller by the day, as if in a race to the top. According to the Singapore Department of Statistics’ 2019 figures, just 5 per cent or 69,000 households live in landed properties.

Of these, only about 2,500 are Good Class Bungalows (GCBs) and owners include James Dyson, who shelled out $45 million – the priciest property per square foot – for his 15,100 sq ft Cluny Road GCB in July2019 – just weeks after buying his $73.8million super penthouse at The Wallich Residence, currently the island’s tallest building. In 2018, Singapore PR Kuok Hui Kwong, daughter of Malaysian tycoon Robert Kuok, snapped up a $43.5million GCB at Belmont Road.

Growing demand for GCBs

According to K H Tan, managing director of Newsman Realty, which specialises in GCBs, demand has been increasing over the years and prices have jumped exponentially. He is responsible for over 170 GCB transactions in the last 17 years. This excludes ”regular” bungalows, such as the trophy homes on Sentosa, which are the only landed properties non-Singaporeans can purchase. “Before 2010, many GCBs of 15,070 sq ft went for $4 million to $6 million. Now, they start at $20 million to over $30 million,” observes Tan.

Considering the limited supply and hefty price tag, how difficult is it to buy or sell GCBs? He estimates that there are always 40 to 60 GCBs in the market. About 10 per cent of clients start with a realistic asking price. Or the seller may have a realistic asking price, but the land may be odd-shaped and thus harder to sell. Motivated sellers usually adjust their pricing to fair market value after three to six months in the market.

He has a database of between 500 and 800 potential buyers, with whom he has spent time understanding their preferred location, budget and plans, whether to rebuild, to move into a ready home or to purchase a new one. Land size and shape are also factors. Some don’t mind a long driveway; others don’t like triangular-shaped land.

Some want elevated land and a few prefer flat while others don’t mind land below road level, which is cheaper. Tan usually conducts an average of seven viewings for each of his listings. Up to 30 per cent of buyers don’t even need to assess the property. “They already like the location and the land and just need to view the floor plan. Some are buying to rebuild so they are not interested in the house itself.”

Who’s buying?

The first group are your born and bred Singaporeans. Many of his early clients were doctors and lawyers. More recently, Tan has been seeing more bankers, fund managers and construction company bosses-turned-property developers. Some own public-listed companies or have just sold them. Others like Far East Organisation CEO Philip Ng buy multiple GCBs for their children.

He snapped up two bungalows adjacent to each other at Cluny Road for his family at over $65 million. According to Mr Tan, 90 per cent of GCBs are bought as family homes or as part of a plan for the future. For example, a wealthy owner may purchase multiple GCBs while his children continue to live with him before marriage.

Until they marry, the spare home is leased out for the time being.” The second group that make up 40 per cent of his clientele are foreigners, mainly from China and Indonesia, with bulging budgets. They may be newly minted Singaporeans or are still PRs but with children who are citizens. “All my transactions are usually very low-key to protect my clients.”

Who’s renting?

Mainly foreigners working in senior management at multinational corporations, according to Tan. Ultra-high net worth individuals, including those from Taiwan, Indonesia and China, also often rent while waiting for their Singapore citizenship. And some local tenants may rent for two or three years while rebuilding their homes. An older, rundown house can be leased for $15,000. A well- maintained one with a land size of 15,000 sq ft to 17,000 sq ft can fetch $25,000 to $30,000 monthly while one of 20,000 sq ft in the Nassim or Tanglin area can be an eye-watering $40,000 to $60,000 monthly. According to Mr Tan, 90 percent of GCBs are bought as family homes or to plan for the future.

“It’s very rare for them to buy a GCB just to collect rental income.”

Managing director of Newsman realty K H Tan on why HNWIs (high-net-worth individuals) buy GCBs”

For example, a wealthy owner may purchase multiple GCBs as his children continue to live with him before they are married. Until they do marry, the spare home is leased out. “It’s very rare for them to buy a GCB just to collect rental income,” he says.

GCB vs super penthouse

They are both equally prestigious but why do some buyers prefer a GCB? Firstly, says Tan, most GCBs are freehold properties while about half of the super penthouses, which cost upwards of $35m, in Singapore have a 99-year lease. Super penthouses also start at a minimum of 10,000 sq ft and you’d hardly see any with a build-up of 30,000 or 40,000 sq ft.

Good Class Bungalows thus offer more value per square foot and, most importantly, you can build your GCB according to your taste. “You can also easily build a GCB of up to 30,000 or 50,000 sq ft if you have a large enough land space,” Tan points out. Owners can also enjoy a huge garden and plenty of parking space – even more so if you build a basement car park – for their supercars. Interestingly, feng shui masters say it is better to live in a landed property and “touch the ground” for better energy. Most importantly, GCBs provide total privacy. A super penthouse may offer you a private lift that opens up into your home, but you’ll still run into neighbours in the lift or car park, or while sharing common facilities.

Tan is confident that the potential of GCBs will only keep growing in the next five to 10 years. “There are many successful Indonesians, Malaysians and Chinese in Singapore, whose children are studying here and will become citizens. Once their children come of age, these wealthy foreigners will buy GCBs. They are used to houses of that size back home. They know that landed properties are still the most prestigious.”

To be classified as a GCB, it must meet these criteria

Size: It must be at least 15,070sq ft or 1,400 sq m.

Location: There are only 39 designated GCBs in Singapore, mostly found in districts 10 and 11, with the rest in districts 20, 21 and 23. This ranges from the most expensive areas such as Nassim and Tanglin to the outlying enclave at Chestnut Drive.

Building limits: To preserve the exclusivity and low-rise character of such prime neighbourhoods, GCBs can only be built up to a maximum height of 2 storeys. The building cannot take up more than 35 per cent of the plot size. Owners must also ensure there is sufficient greenery between the plots of land.

Eligibility criteria: Since 2012, only Singaporeans have been allowed to purchase them. However, foreigners and Permanent Residents (PRs) can apply for approval by the Singapore Land Authority – provided they can prove they have made exceptional economic contributions and will only use the property for their occupation.

Well-known GCB residents: Five prominent owners who have snapped up GCBs.

Jet Li

The China-born movie star and now Singapore citizen bought his Binjai Rise home for $19.8m in 2009. Previously owned by fashion tycoon FJ Benjamin, it had a rep for being a party house with a guest list that included footballer David Beckham.

Zhang Yong

The founder of hotpot chain HaiDiLao, bought his 15,884 sq ft home at Gallop Road for $27million. Developed in the shape of two wings by K2LD Architects in 2012, it was tenanted at $30,000 before the hotpot king snapped it up in 2016.

Jack Ma

The Alibaba founder is rumoured to have paid $40m for a home at Victoria Park Close in 2019. Currently being rebuilt, the official buyer is listed as USB Trustees.

Tsai Wan-Lin’s relative

This 52,054sq ft GCB at 81 Dalvey Road, formerly owned by the late Lim Kim San, one of Singapore’s founding fathers, sold for S$93.9 million in September 2018 to an unnamed Singaporean descendent of Tsai Wan-Lin, formerly the richest person in Taiwan.

SG Casa Pte Ltd

Wing Tai Holdings chairman Cheng Wai Keung sold his property for a record $230 million in 2019. This humongous 84,543 sq ft property at 33 Nassim Road with a swimming pool and a full-sized tennis court can be rebuilt as five smaller GCBs. It was transferred to SG Casa Pte Ltd, which is reportedly linked to Eduardo Saverin.

This story was originally published on The Peak Singapore.