Real estate prices have really increased in all segments, even in the extreme luxury segment. Good-grade bungalows (GCBs) were all the rage in 2021, from $ 144 million transactions in 48 hours (in July) to news about tech billionaires developing a thing for them.
There’s also a good chance the GCB trend will continue for quite a while as Covid-19 continues to wreak havoc. Here’s what happens:
GCB transaction volume close to last highs of 2010
The last high for GCBs was in 2010 when transactions totaled $ 1.85 billion with around 101 transactions. For comparison: In the first half of 2021 alone, around $ 2.05 billion in transactions were made with 68 transactions.
The contrast is even sharper between 2020 and 2021. Last year, the total GCB deals with 21 transactions only reached around $ 415.8 million. On an annual basis (January to August), GCB prices averaged $ 1,391 psf in 2021, but have since increased to around $ 1,713 psf.
The high point of the year came in July, when four GCBs completed transactions valued at approximately $ 36 million each in 48 hours. These goods:
- Binjai Park ($ 1,318 psf)
- Swettenham Road ($ 1,954 psf)
- Coronation West Road (no reservation made)
- Olive Road ($ 1,536)
Meanwhile, the most expensive GCB deal of the year was on Nassim Road, where a 32,160-square-foot home ran for $ 128.8 million, or around $ 4,005 psf.
It was also found that most buyers appear to be in technology-related companies in 2021. For example, the record breaking Nassim Road GCB was bought by the wife of the head of Nanofilm Technologies, Shi Xu.
Secretlab founder Ian Ang bought a GCB on Caldecott Hill, while Razer CEO Tan Min-Liang bought a unit on Third Avenue.
There doesn’t seem to be a specific reason why tech entrepreneurs are more attracted to real estate these days. However, some theories we’ve heard have a more stable component in their overall portfolio, cheap leverage, and funding options like home equity loans.
(This refers to taking out a loan on the valued property at a very low interest rate).
How much have GCB prices moved since 2010?
