Singapore GCB sales plummet 57.7% to $751.4m in H1 2022
Only 29 units of Good Class Bungalows were sold during the period.
Following a banner 2021, Good Class Bungalow (GCB) sales in Singapore saw a slowdown, which CBRE attributes to the limited supply of properties available for sale, macroeconomic uncertainty and a widening buyer-seller price gap.
A total of 29 transactions worth $751.42 mil were recorded in H1 2022, a 57.7% y-o-y decline from 59 GCBs amounting to $1.777 bn sold in H1 2021.
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In 2021, GCB activity was mainly boosted by digital economy entrepreneurs who enjoyed an uplift in wealth from the last cryptocurrency wave and stock market rally. This buyer pool has since shrunk with the market downturn. As such, H1 2022 saw mainly key executives and scions of economically active “old rich” acquiring GCBs.
For instance, Wee Hian Nam, the grandson of property magnate Wee Thiam Siew purchased 14 Olive Road for $50.24 mil ($1,800 psf) and Alwyn Chong, the managing director of Luxasia bought 14 Caldecott Close for $13.25 mil ($1,336 psf). The largest GCB to change hands in H1 2022 was 42 Chancery Lane, reported to be sold for $66.06 mil ($1,931 psf) to Kelsey Cheng Tan, daughter-in-law of Filipino tycoon, Andrew Tan.
Average prices hold firm, contributing to a widening buyer-seller price gap
Average GCB prices grew 6.3% y-o-y from $1,733 psf in H1 2021 to $1,842 psf in H1 2022. Prices have since risen 29.8% from the last trough of $1,419 psf in 2020. 12 GCB transactions crossed the $2,000 psf threshold in H1 2022, compared to 9 in H1 2021, reflecting firm GCB prices.
The rapid surge in GCB prices from 2020 has resulted in a mismatch in buyer and seller price expectations. Sellers are holding firm on their asking prices in anticipation of further price appreciation while buyers are turning more cautious given the increased economic uncertainties.
Sales momentum likely to remain at the current momentum in H2 2022
Looking ahead, the prolonged Russia-Ukraine conflict, rising interest rates and the risk of a global recession pose significant headwinds for the GCB market. Coupled with the limited supply of properties available for sale and impasse between buyers and sellers, it is likely that GCB activity will remain at the current momentum for the rest of 2022. In the longer term, Singapore’s strong positioning as a wealth hub should support demand for GCBs.