Fall in number of GCB deals in 2019 "not surprising": Analysts

Victor Kang25 Nov 2019


Although the overall volume and value of Good Class Bungalow (GCB) transactions in 2019 is expected to be lower than that of the previous year, analysts noted this is trend is expected, citing the uncertain economic climate as a possible explanation, reported The Business Times.

A study of URA data by List Sotheby’s International Realty (List SIR) shows that in the year-to-date, 34 deals worth $645.7 million have been completed in Singapore’s GCB areas. This is fewer than the 38 deals totalling $933.3 million for the same period in 2018.

RELATED: See all Good Class Bungalows for sale in Singapore

For the whole of 2018, there were 42 transactions amounting to $1.03 billion. That was the only time since 2011 that the $1 billion mark was breached.

Market watchers have said that on top of the above figures, for which buyers made caveats, there is possibly around $400 million in deals closed last year that were not caveated, which would make 2018’s tally to around $1.4 billion.

The Business Times also estimated that so far this year, there are at least $500 million of transactions in GCB areas that have not been recorded in URA’s Realis system.

They include transactions that were not caveated or for which caveats may have not recorded recently but not captured by the Realis system because of a time lag. Also, vacant land transactions in GCB areas are also not shown in Realis.

These matters make the total year-to-date figure to almost $1.15 billion.

Analysts: Dip due to high asking prices and weaker economy

Han Huan Mei, List SIR head of research, said that it is not that surprising that GCB transactions in 2019 are slightly lower than in 2018.

“This is partly due to a price gap; with owners generally still asking high prices despite the weaker economy,” she noted. “From the viewpoint of buyers, who would include the top brass of companies, they may be adopting a cautious stance seeing weaker business conditions, and delaying their decisions.”

Newsman Realty managing director KH Tan said GCB prices in ultra-prime locations such as near the Botanic Gardens and Nassim, have mostly increased by 10% this year. Prices in the Holland belt were stable while those in Bukit Timah area have softened.

“Basically, now there are two groups of buyers. First are the new citizens, who are ready to commit when they find something they like. Their preference is brand-new bungalows in prime locations such as Nassim and near the Botanic Gardens; therefore prices in these areas have increased,” he explained.

“Our local buyers tend to go more for the other GCB areas, and they tend to be a bit more cautious to commit as the US-China trade issue is still ongoing. So when demand is slow, the price might be softer as compared to prime locations.”

RECOMMENDED ARTICLE: Foreigners Just Bought These 4 SG Condos at Crazy Prices

Tan additionally believes that transaction volume in 2020 will be similar to 2019’s level.

“Local buyers who have put purchases on hold because of the trade war will come back to the market after waiting for a year. New citizens who are ready to commit will be purchasing when they see something they like.”

However, he noted that the Additional Buyer’s Stamp Duty (ABSD) is still a major challenge in closing deals.

“Many potential buyers drop the idea of purchasing because of the ABSD for second and third property purchase is very high.”

Looking for a property in Singapore? Visit PropertyGuru’s ListingsProject Reviews and Guides.


Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg


You may also like these articles

Nassim Road GCB for sale for $175m

The two-storey bungalow has a total floor area of about 13,839 sq ft and is a mere five-minute walk to the Botanic Gardens, and is a 10-minute drive to the CBD. Image source: CBREA two-storey conserv

Continue Reading17 Oct 2019

Former Xiaomi director buys Tanglin Hill GCB for $31.5m

Located within the Ridley Park GCB area, the freehold bungalow is more than 30 years old and is nestled on a 16,446 sq ft site.Hong Kong-listed Xiaomi Corporation’s former board member, Koh Tuck Lye

Continue Reading11 Nov 2019

Oei Tiong Ham Park GCB to go under the hammer for $23m

The property features six ensuite bedrooms, a patio entrance and a private swimming pool. It also has a garage that can house three cars and which can also be used as a playroom.A good class bungalow

Continue Reading12 Nov 2019