GCB sales slow down in H2 22 due to interest rate hikes: analyst

The GCBs sold were valued at $613.45m, down 18.4%.

Transactions of good class bungalows (GCB) decelerated 18.4% in the second half (H2) of 2022, with over 18 GCBs worth $613.45m compared to H2 2021, CBRE data showed.

On a yearly basis, the transactions also almost halved of $1.210b across almost 40 GCBs sold in H2 2021.  

For a full year, 47 GCBs were valued at $1.365b, 54.3% down year-on-year from $2.9b across 98 GCBs sold in 2021.

The sales declined in H2 2022 driven by faster-than-expected interest rate hikes and a worsening macroeconomic backdrop. But CBRE said the total GCB sales value in 2022 were still higher than 2019 levels.

Market activity 

There will be prolonged geopolitical tensions and interest rate hikes that will challenge the GCB market.

Transaction activity could stay slow for most of 2023, at least until interest rates stabilise and there is more clarity in the macroeconomy, CBRE said. 

“In the longer term, Singapore’s strong positioning as a wealth hub and the continued attractiveness of GCBs as status symbols and for wealth perseveration ought to support demand and prices,” it added.