Luxury homes retain appeal despite curbs
Some of Singapore's most desirable houses come with a catch: Only locals can own them.
That foreign buyers - notably from China - who for years helped drive demand for luxury homes, cannot buy these dwellings has not dented their appeal. Their scarcity and the exclusivity they confer have pushed prices of these homes - known as Good Class Bungalows, or GCBs - to record highs even as the broader property market cools.
Only about 2,500 GCBs dot the city-state, ranging from colonial-era houses to architect-designed modern homes with cantilevered verandas, infinity pools and expansive landscaped gardens - a world away from the high-rise apartments most Singaporeans call home.
In a recent blockbuster deal, Mr Tony Tung, chairman of Hong Kong-based oil trader Winson Group, bought a bungalow near the Botanic Gardens for $105.3 million - a record for a GCB, it was reported earlier this month.
Nearby, a Singaporean member of the Tsai family, which made its fortune in insurance in Taiwan, snapped up a bungalow for $93.9 million.
More records may soon be broken. A new bungalow near the Botanic Gardens, featuring a central courtyard pool and water garden, will soon hit the market with an asking price of $3,500 per sq ft. That would surpass the previous record of $2,700 per sq ft set last year, according to Mr K. H. Tan at Newsman Realty, who is handling the sale.
Ms Sammi Lim, director of capital markets at real estate agency CBRE Group, said: "Due to scarcity and exclusivity, the GCB market has always been regarded as the jewel of the residential market and a coveted trophy asset to the well-heeled community. GCBs have proven to be a resilient asset class through market cycles."
That is proving to be the case again as a rally in home prices stalls, following the imposition of further property curbs in the middle of last year. House values declined 0.1 per cent in the three months ended Dec 31, snapping five straight quarterly gains.
The citizenship requirement is not the only restriction on GCBs. The plot must be at least 1,400 sq m, and the house cannot take up more than 35 per cent of the land or be over two storeys high. Such luxurious use of space is another status symbol in one of the world's most densely populated countries, where about 7,900 people are crammed into each square kilometre.
Singapore is also one of the world's wealthiest nations - home to the ninth-highest number of millionaires - according to Credit Suisse Research Institute's 2018 Global Wealth Report.
That has helped underpin activity in the GCB market, with the number of transactions rising 47 per cent in the second half of last year, compared with the first six months of that year, according to CBRE.
Typical buyers are super-wealthy locals and foreigners who have attained citizenship, said Mr Tan, managing director at Newsman Realty, which specialises in bungalow deals. "The super-rich want to buy the best diamond, the best car, so in Singapore residential, the Good Class Bungalow is the best you can get, " he added.