Sales of good-class bungalows are predicted to equal or surpass those of the previous year in 2025

Singapore's stability and generational wealth transfer support the demand for the best landed homes in the city-state.

January 8, 2025

CONDOsingapore.com

Market observers are optimistic about the outlook for 2025 after the Good Class Bungalow (GCB) market saw a strong showing in the second half of 2024, pushing full-year sales above 2023 levels.

"GCB buying activity will be supported by interest rates still continuing to go down, maybe by 100 basis points in 2025," stated Julian Yip, managing director of Realstar Premier.

He continued by saying: "Trade wars and geopolitical conflicts will continue to make Singapore even more appealing as a safe haven for new-citizen UHNWIs (ultra-high-net-worth individuals), whether they are from Europe, Taiwan, or India."

According to him, the transfer of wealth from the baby boomer generation to Gen Z and millennials will increase the number of centimillionaires in Singaporean families, enabling them to buy high-end real estate.

Yip added that the effects of the incoming Donald Trump administration in the US on the world economy and geopolitics, as well as the movement of interest rates, could influence buying sentiment in the GCB market this year.

According to Han Huan Mei, research director at List Sotheby's International Realty (List SIR), one of the main factors influencing the GCB market in 2025 will be any cooling measures imposed on Singaporeans purchasing their first private residential property.

Yip anticipates that there will be at least as many bungalow deal transactions in GCB Areas this year as there were in 2024. "Price records could potentially be broken."

"I see 2025 as a better year where well-priced GCBs will move as overall sentiments improve," stated Steve Tay, executive director of Steve Tay Real Estate (STRE). Although buyers will continue to be picky and choose affordable GCBs with land features they like, demand is robust.

According to KH Tan, managing director of Newsman Realty, GCB Area prices will rise by roughly 5% on average this year, and transaction volume will be marginally higher than in 2024.

"There is pent-up demand, interest rates are lower than they were last year, and the economic outlook is good, so more buyers will be entering the market," he said.

"A growing number of foreign UHNWIs have established family offices here, and some of their relatives will obtain Singaporean citizenship, making them eligible to purchase GCBs for themselves and their offspring."

To purchase a landed property in a GCB Area, one must typically be a citizen of Singapore.

The most prestigious type of landed housing in Singapore are bungalows in the 39 gazetted GCB Areas, which are subject to stringent planning requirements to maintain their low-rise character and exclusivity.

Among other things, the planning standard for newly constructed bungalows in GCB Areas is a minimum plot size of 1,400 square metres, or 15,070 square feet (sq ft). In these areas, there are only about 2,700 bungalows.



According to List SIR's examination of the Urban Redevelopment Authority's Realis caveats data, 23 transactions totalling S$652 million took place in GCB Areas in 2024.

Among them is a Cluny Hill bungalow that sold for S$52 million. Another example is the S$49 million that the son and wife of Kuok Koon Seng, the brother of Kuok Khoon Hong, the chairman and CEO of Wilmar International, paid for a bungalow in Astrid Hill.

According to market watchers, there were also transactions in 2024 worth over S$900 million for which buyers made no reservations. The sale of a bungalow in Tanglin Hill that was still under construction for S$93.9 million is one example.

The house, which will be constructed to exacting standards, will cost a record S$6,197 per square foot (psf) on 15,150 square feet of land. The total built-up area of the property will be close to 30,000 square feet.

Additionally, the family of Zhang Lei, the founder and chairman of Hillhouse Investment, paid S$131.4 million in separate transactions for two adjacent freehold bungalows on Belmont Road.

The potential to redevelop the combined 43,789 square foot site into a large house at the highest point of Belmont Road, with a panoramic, unobstructed view, was the reason why the property sold for S$3,000 per square foot, which was above market expectations.

Gallop Park Road sale

According to market rumours, one of the most recent non-caveated transactions is the sale of an old home on Gallop Park Road, with an estimated price of around S$40 million.



Lily Yeo, the late Alan Yeo's wife and the former head of the Yeo Hiap Seng beverage and food products company, is selling the property, which has a freehold land area of 18,427 square feet.

Based on caveats data, the number of bungalow sales in GCB Areas in 2024 is substantially higher than that of 2023, with 18 transactions totalling S$432.5 million. In addition, the market projected non-caveated deals worth at least S$700 million in 2023, as we previously reported.

In 2024, only nine of the twenty-three caveated GCB deals occurred during the first half of the year.

According to Tay of STRE, the market started the year slowly because of the high interest rate environment, global uncertainties, and sellers' high price expectations from 2023.

"A clearer economic outlook amid lower interest rates, as well as the bridging of price expectations between sellers and buyers, led to an uptick in demand and transactions in H2 2024," he added.

More serious purchasers

In H2 2024, buyers started to accept that the cost of landed homes in highly sought-after neighbourhoods would not decrease, according to Realstar's Yip.

Tan of Newsman agreed, stating that "we've seen buyers who have been looking for a GCB for a while becoming more serious in the past six months."

"They are scared of losing out on the chance to purchase, so if they like a property, they are willing to make a fair offer and commit."

Because they are empty nesters wishing to downsize, agents also note that seniors who own GCBs are more inclined to sell. In addition to being retirees, many of them are struggling with increased property taxes since 2023.

According to Tan, "if no family members are residing in the estate sale property, there is also a tendency to dispose of it (more quickly)."

Yip claims that the average rate of price growth for landed properties in desirable areas, such as bungalows in GCB Areas, has decreased from roughly 13% in 2021 to 9%–10% in 2022, 7%–7% in 2023, and 4%–5% in 2024.

"Of course, there are the very exceptional properties that have sold for a premium, like the bungalow on Tanglin Hill and the two houses on Belmont Road," he continued.

The massive transfer of wealth

In 2024, demand for the best landed housing in the city-state increased due to a number of factors, including the decline in interest rates, better economic growth, and Singapore's rise as a stable Asian financial centre with a thriving family office scene, according to agents.

"The cryptocurrency rally has generated new wealth among fintech players and real estate investors," stated Tay of STRE.

"I've also noticed a rise in younger Singaporeans seeking a GCB to call home, whether they are self-made business owners or the second or third generation of prosperous local business owners," he continued.

According to Yip, in 2025, newlyweds and the younger generations of local wealthy families who are gaining from "the great wealth transfer" are probably going to continue driving GCB purchases.

Yip stated that "the bright spot is that asset-rich but cash-poor senior sellers are likely to be more willing to compromise," even though closing deals this year will still primarily involve bridging the buyer-seller price gap.

He cautions prospective GCB buyers against haggling over a slight price difference, particularly for properties with good qualities and in desirable locations. "You might miss out on the chance to purchase the house of your dreams if you argue over a minor difference."

Tan agreed and stated: "When a good property does come up for sale, the owner will want more than the fair market value. A serious buyer ought to just buy it.

Yip advises owners who have a compelling reason to sell—for example, that the property is too large for them now that their kids have moved out, or that they are having trouble maintaining the home and paying property taxes—to take a fair offer when it comes up and proceed with their plans.