Median rents for Good Class Bungalows (GCBs), an exclusive category of bungalows with stringent planning guidelines, have been stable over the past few decades, according to The Business Times.
Based on built-up area, the average rents for GCBs reached S$3.41 psf per month as of the second quarter of 2011. However, the average annual compounded rate of increase hit six percent between 2005 and Q2 2011, when the number of permanent residents (PRs) and foreigners increased significantly.
There are 2,300 completed GCBs across the country, located in 39 GCB areas in Districts 10, 11, 21 and 23. This represents slightly more than three percent of landed properties and 22 percent of all detached houses across the country. A bungalow that falls within a GCB area is subject to a minimum land area of 15,070 sq ft (1,400 sq m) and a building height of two storeys.
According to the report, the provision of greater built-up space is a recent trend in the GCB market. This could moderate median rents on a psf basis for a few quarters, as more bungalow-type properties are completed and leased out.
Since 2002, prices of GCBs have not declined, even at the peak of the 2008 global financial crisis. The annual compounded rate of capital values was 8.8 percent since 2000 but reached a whopping 20.6 percent, if one measures capital growth rates from 2005.
“GCBs should expect to see strong leasing demand and rentals are expected to increase due to limited supply. The GCB leasing market should remain tight because demand from top executives with the budget for these properties will meet limited supply. Vacancy levels are therefore likely to stay low,” said the report.