In a nation with restricted land availability, GCBs represent the pinnacle of prestigious landed property ownership. GCBs have long been considered a prime status symbol. Singapore’s property market has recently experienced a recent uptick in Good Class Bungalow sales. Thus, as Good Class Bungalows go on the real estate rise, we decided to put together a comprehensive article detailing the ins and outs of GCBs.
What are Good Class Bungalows?
The term "Good Class Bungalow" or GCB is exclusive to Singapore. Good glass bungalows are distinguished by two factors – their location and size, with a prerequisite land area exceeding 1,400 square meters. These prestigious residences are strategically positioned in 39 specified enclaves, prime residential areas near the country's city centre, ensuring exclusivity. The longevity of some properties spans decades, while others may be newly constructed based on occupant preferences. Modern designs for Good Class Bungalows (GCBs) may feature unique amenities, catering to diverse lifestyles, including entertainment rooms and swimming pools.
Good Class Bungalows are also often rich in cultural or natural significance. NParks contains a number of tree conservation areas that numerous Good Class Bungalows occupy, where owners cannot cut down certain trees without NParks’ approval, meaning that large parts of Good Class Bungalow plots tend to be underdeveloped.
Additionally, there is a small subset of Good Class Bungalows considered specially conserved bungalows (e.g. black-and-white houses), of which there are only 65 in the entirety of Singapore. These property owners cannot change the appearance of their bungalows, and any changes (e.g. renovation, expansion) must be approved by the government, who typically own and rent out these properties.
These all explain why GCBs go at much higher prices compared to other landed properties or landed homes — the land area and rich heritage elevates them above other types of houses.
What are planning restrictions for Good Class Bungalows?
Bungalows classified as Good Class Bungalows (GCBs) are governed by planning restrictions aimed at safeguarding their exclusivity and maintaining a low-rise character. These residences must adhere to specific criteria, including a minimum plot land size, a maximum height limit of two storeys with an attic, and a site coverage not exceeding 40% of the total plot size. Moreover, any removal or replanting of existing matured trees and new landscape proposals require approval, especially considering that many of these plots are situated within tree conservation areas.
This explains the distinctively lush greenery, roomy land space, and amenities (e.g. pools, tennis courts) we tend to associate with Good Class Bungalows.
Typical bungalows maintain a setback of two meters, whereas Good Class Bungalows (GCBs) are mandated to have a three-meter setback for both sides and the rear. Preservation of existing land characteristics is imperative within these setback areas, prohibiting any cutting or filling. Despite the wider setback resulting in a reduced site coverage percentage, it provides owners with more expansive open space, allowing for additional amenities beyond the house. Gardens and swimming pools are commonly favored choices in utilizing this spacious outdoor area.
Where are Good Class Bungalow estates in Singapore?
Singapore has about 39 residential zones classified as Good Class Bungalow areas. Within these 39 zones, the Urban Redevelopment Authority of Singapore (URA) dictates that Good Class Bungalows must be located in prime residential Districts 10 and 11, or in the bungalow estates of Districts 20, 21, and 23.
Of course, these are all prime residential locations, which contribute to the elite exclusivity surrounding Good Class Bungalows.
We put together a list of Good Class Bungalow areas below for you to check out.
Who can own Good Class Bungalows in Singapore?
This law presumably prevents foreigners from accumulating freehold land without special approval by the Singapore Land Authority Land Dealings Approval Unit (LDAU), and thus avoids undue speculation, which would greatly inflate the prices of Good Class Bungalows (well, more than they already are). This also contributes to the exclusivity surrounding Good Class Bungalows — should a foreigner want to acquire a Good Class Bungalow, they must first apply to be a Singapore citizen.
However, exceptions have been made for non-Singaporeans who have made exceptional economic contributions. For example, Robert Kuok’s Malaysian daughter (and Singaporean PR) acquired a Good Class Bungalow along Belmont Road for $43.5 million in 2018.
How many Good Class Bungalows are there in Singapore?
There are approximately around 2,800 GCB plots in Singapore.
However, this is merely a rough estimate, as Good Class Bungalow plots can be sub-divided; so long as the resulting land area of the separate GCB plots are still minimally 1,400 square metres, the divided areas will still be considered a Good Class Bungalow.
Why are Good Class Bungalows so popular?
From an economic standpoint, Good Class Bungalows are recognised as a good store of wealth given their rarity, and typically appreciate over time. This is because Singapore’s supply of GCB land will never increase, making it near impossible for their value to fall.
Aside from their investment value, it’s pretty obvious, isn’t it? The luxurious, sufficient greenery, the large land space, the potential for lots of amenities and installations. Good Class Bungalows are unique in that no other landed housing can offer as much privacy, freedom, or scenery.
You won’t be suffering from noisy neighbours or roaring traffic — Good Class Bungalows are situated in mega-low density zones — and of course, the fact that they serve as a key status symbol is a bonus too.
The Sino-US trade war from 2017 to 2018 actually boosted GCB sales, with the total value of GCB deals in Singapore rising 16% from $886 million to $1.03 billion. GCBs are well known as good assets of values, holding firm even in times of downturn, and are likely to be passed as heirlooms through the generations.
GCBs are rarely sold, and typically only occur when significant profit can be gained from selling the property, or when children grow up, move out, and thus have no need for the plot anymore. A GCB at Jervois Hill was sold in 2019 for this exact reason.
Where are the cheapest and the most expensive Good Class Bungalows?
This exact district difficult to ascertain as each Good Class Bungalow is so unique and distinct, that the sales of two separate GCBs in the same district can differ by $10 million.
However, if we’re looking at the most expensive GCB, Nassim Road in District 10 is a clear front-runner. Wing Tai Holdings chairman Cheng Wai Keung once sold a GCB for an eye-watering $230 million! And more recently, along 40 Nassim Road, a GCB was sold for a staggering profit of $175 million. These are hefty numbers we’re dealing with..
On the flipside, a GCB (also in District 10) along Dalvey Road only sold for $92.9 million. The pricing system and market model for GCBs differs largely from other properties, as there are so few GCBs that transactions don’t often take place.
Other notable purchases include James Dyson, who acquired a GCB along the Botanic Gardens area after setting up a Dyson factory in Singapore, and Zhang Yong, founder of the HaiDiLao steamboat chain, acquiring a Gallop Road bungalow after obtaining Singapore citizenship.
To add on to the slew of purchases, Head of Yun Nam Hair Care Andy Chua purchased a GCB at Brizay Park (the Old Holland Road area) in 2016 for $33 million; meanwhile, family member of Charles and Keith purchased a Chatsworth Road bungalow in 2017 for $20 million. While these numbers are nowhere near the higher end, they’re still whopping figures.
How will an economic downturn impact the GCB market?
GCBs tend to appreciate over time, against all odds, even in a downturn. Investors may turn to real estate, especially exclusive properties like GCBs, to store their wealth, instead of more volatile means like bonds or stocks.
GCB sales also rarely happen; due to their scarcity and embedded heritage, their ownership rarely changes hands, and owners often pass them down as heirlooms to future generations. GCBs are unlikely to fall significantly below market value when the only people who can purchase them are the mega-wealthy, where this sort of property is considered affordable.
Furthermore, Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie, asserts that prospective GCB owners are likely already closely monitoring the market, and will pounce on any opportunity to purchase discounted GCBs.
Post Global Financial Crisis in 2008, the GCB market experienced an uptick in prices, and this is to be expected in the wake of COVID-19 as well.
According to Stuart: “The GCB market emerged from the Global Financial Crisis with prices nary correcting and moving upward instead. Despite COVID, the increasing influx of top-tier talents from around the world will be migrating to and making Singapore their homes. As such, I see prices staying resilient and not facing any tremendous downside pressures. This category of home owners is unlikely to face financial stress due to their wide-ranging portfolios and access to liquidity.”
What are the Potential Capital Gains and Taxes for GCBs?
In most cases, the Inland Revenue Authority of Singapore (IRAS) will not impose taxes on properties or capital gains in Singapore.
It is self-evident that the capital gains from selling GCBs in Singapore can be staggering. A prime example is Madam Chong (also known as the “Queen of Leedon Park”), who sold her Leedon Road Bungalow in 2018 and realised a capital gain of $39.8 million. This explains why the IRAS is stricter on individuals who flip and dabble in Good Class Bungalows for profit.
A recent case includes a wealthy couple who appealed IRAS’s tax decision to their profits made from selling properties. Within just 3 years, the couple made $16 million from selling GCBs in Wilby Road, Brizay Park, and Garlick Avenue.
However, the IRAS deemed that the couple was trading properties for profit, given not just the frequency of their transactions, but also the short holding periods for their properties. Though they tried to appeal through saying these properties were originally bought for family use but were later found unsuitable, these claims were outrightly rejected. This means that IRAS treated their profits as income earned – which is taxable – as opposed to non-taxable capital gains.
How to buy a Good Class Bungalow?
A Good Class Bungalow provides the opportunity to craft beautiful and innovative living spaces tailored to your lifestyle. Given the extensive area, it is advisable to engage the services of a luxury real estate agency to assist in constructing your home. WTG Property Pte Ltd boasts a team of experienced local real estate consultants specialized in searching and advising on Good Class Bungalows for sale. Leveraging our years of expertise, our goal is to find a suitable luxury homes that align with your specifications. Feel free to reach out for additional inquiries.