News & Articles

Will the ABSD affect the popularity of Good Class Bungalows in 2023?

COVER A Good Class Bungalow at Joan Road, marketed by Knight Frank. Photo: Rendy Aryanto /

The year has already clocked some record-breaking transactions, but will the recent increase in the Additional Buyers’ Stamp Duty (ABSD) affect the popularity of the Good Class Bungalows in Singapore?

There are about 1.53 million residential dwellings in Singapore, including those under the Housing Development Authority. This is as per statistics released for 2022 by Hamburg-based market research company, Statista. That’s a staggering number considering the compact size and urban density of Singapore and its famous skyscraper-filled skyline.


But what is even more interesting is the visibility of the luxury mansions that make up 1 per cent of this total housing stock—the uniquely Singapore Good Class Bungalows (GCBs) are discreetly peppered yet not necessarily hidden in the island-city’s urban environment. In land-scarce Singapore, GCBs fall under the most prestigious category as recognised by the Urban Redevelopment Authority (URA) and situated in 39 gazetted GCB areas around the island. The classification has a minimum plot requirement of 1,400 sq m (approximately 15,069 sq ft) and are touted as the most news-worthy investment especially in the past couple of years.

New value

ABOVE A view of the driveway of the Good Class Bungalow at Joan Road, marketed by Knight Frank. Photo: Rendy Aryanto /

Steve Tay, senior associate vice president at List Sotheby’s International Realty says that the GCB market has been in an under-valued state since the 2009 financial crisis. But the pandemic changed all that, bringing about a new appreciation of the value of larger living and outdoor spaces along with the realisation of the frailty of life and the need for family bonding.

Considering that landed properties with the exception of Sentosa are restricted to Singaporeans, the new buyers of GCBs were predominantly local ultra-high-net worth individuals (UNHWI), newly naturalised citizens from the region, or those who have obtained approval from the Land Dealings Approval Unit (LDAU),” says Nicholas Keong, head of private office at Knight Frank Singapore. “Over the last few years, we have observed younger buyers in this market,” he adds. Approvals from LDAU are provided on a case-by-case basis.

ABOVE The front porch of a Good Class Bungalow in Nassim, marketed by Realstar Premier Group. Photo: Realstar Premier Group

Julian Yip, managing director of Realstar Premier Group, which transacts prime landed property in Singapore, says that they have seen an increase of new citizens from China, Indonesia, Taiwan and India among others. These are UNHW individuals looking for safe-haven residence. 

List Sotheby’s International Realty’s Tay puts it towards the higher investment potential. “One of the key catalysts could be the fact GCBs score higher in value in comparison with, for instance, 10,000 sq ft bungalows in Hong Kong in equally high-end neighbourhoods such as Mid Hills and The Peak.”

Sure enough, the year 2021 saw 60 GCB sales at a total transaction value of SG$2,090.2 million. While the number of transactions went down to 20 in 2022, the transaction value remained reasonably high at SG$779 million. “The reason for the lower transactions in 2022 as compared to 2021 is the price gap between sellers’ expectations and buyers’ offers. It is the same situation happening now,” explains Yip about the market outlook for 2023.

These high-end transactions have set a price trend, agrees Han Huan Mei, research director at List Sotheby’s International Realty. “Sellers’ price expectations have risen as a result of these record deals. Especially in 2021, when the market was most active, asking prices went up to over 50 per cent,” she adds.

Leonard Tay, head of research at Knight Frank Singapore, puts it to the high quantum of these luxury assets, as well as it being typically a one-off purchase for most. “Those who have bought in the previous years will unlikely transact again,” he says. GCB investments are often for long-term personal usage as a private residence, agrees Keong. “UHNW families purchase these properties to live in, therefore often trading in cycles”, he says.

Increased costs

ABOVE Another view of a Good Class Bungalow at Joan Road, marketed by Knight Frank. Photo: Rendy Aryanto /

The GCB market outlook for 2023 could depend on a few deciding factors, agree all the experts. An uncertain economy, rising interest rates as well as the recent cooling measures announced by the government would mean that the GCB market will likely be more subdued in 2023.

On April 26, 2023, the Singapore government announced its third round of cooling measures since the pandemic. The Additional Buyer’s Stamp Duty (ABSD) for foreigners looking to buy property in Singapore doubled to 60 per cent (from 30 per cent as previously set on September 30, 2022). The ABSD is levied on citizens on the purchase of second and subsequent residential properties in Singapore. For Singapore permanent residents and foreigners, ABSD is levied on any private residential property purchased in the country.

Sotheby’s Tay feels that this may have minimal impact on the GCB segment. “These measures will be effective in managing the price growth of more than 90 per cent of the residential market. However, GCBs are in a very niche segment and buyers will ensure their purchase falls under a first property count as the quantum of each house does not justify paying ABSD which would run into tens of millions in this case.”

Although it is early to identify the buying trend for 2023, the year has already seen some top-tier GCB transactions. As reported on April 19, 2023, three bungalows at 42, 42A, 42B Nassim Road were sold collectively to a family of Singapore citizens for a total of SG$206.7 million.

Brokered by Real Star Premier, these changed hands for SG$4,500 per square foot (PSF) of land, making them the highest psf transactions for GCBs in Singapore. “It broke the record of 30 Nassim sold in 2021 at SG$4,005 psf,” says Yip. “Nassim Road is the number one GCB address in Singapore, and 42 is not along the busy road. This portfolio is one among the rare plots in the neighborhood with three units side by side.”

List Sotheby’s International Realty also sold a GCB plot at Jalan Harum located in the Oei Tiong Ham Park GCB area. Although transacted at a much lower price than the Nassim Road bungalows, at SG$2,300 psf, it was a record high for that area. In 2021, a plot of land in the same vicinity was sold by Tay of List Sotheby’s International Realty at SG$1,600 psf setting a new high, and in 2022 the same land was resold for SG$2,000 psf setting another new high. The new PSF rate indicates a 44 per cent increase from 2021. 

“Inflationary pressures, coupled with high-interest rates and the possibility of a recession in Asia amidst geopolitical tensions, as well as a looming war in Europe all lend a sense of uncertainty to the economy going forward. Hence buyers are cautious and not in a bullish momentum compared with 2021 and 2022,” says Tay.

Read More at Tatler


Suggested News


[miniorange_social_login shape="square" theme="default" space="4" size="35"]


[miniorange_social_login shape="square" theme="default" space="4" size="35"]