How Much Do You Need to Earn to Afford a Good Class Bungalow (GCB) in Singapore?
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How Much Do You Need to Earn to Afford a Good Class Bungalow (GCB) in Singapore?

Xue Miao
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We’ve seen how much we need to earn to afford a freehold condo in Singapore.

For some, it might be too small of a kick.

Landed properties might be the next tier for some to achieve.

But for a few others, they might still be looking for that litttttle bit more.

In a country like Singapore where housing is relatively expensive, what’s one of the most expensive properties a person can own?

And how much would you need to earn to afford one of these?

GCB in Chatsworth Park sg asia tatler
Source: Singapore Tatler

*Cues Good Class Bungalows*

One of the fanciest types of properties in Singapore, Good Class Bungalows are meant for the elite of the elite.

If you’re imagining the setting of a Crazy Rich Asian’s home (think big grass plains and toilets the size of bedrooms), there’s a good chance it’s a Good Class Bungalow.

TL;DR: How Much Do You Need to Earn to Afford a Good Class Bungalow (GCB) in Singapore?

To Afford A... 
$27million PropertyDownpayment:$1,350,000 (Upfront)
$5,400,000 (Cash or CPF)
Bank Loan:$20,250,000

$75,865 (Monthly Repayment)
Total Monthly Salary Required (including own expenses etc):$78,565
$230million PropertyDownpayment:$11,500,000 (Upfront)
$46,000,000 (Cash or CPF)
Bank Loan:$172,500,000 (Upfront)

$646,255 (Monthly repayment)
Total Monthly Salary Required (including own expenses etc):$649,755

What is a Good Class Bungalow (GCB)?

Good Class Bungalows (GCBs) are the crème de la crème (best of the best) of Singapore properties.

A GCB has two main features.

Firstly, it must be situated within the 32 areas gazetted by the Urban Redevelopment Authority (URA).

Next, many of these areas are large forested areas to ensure that there is sufficient greenery surrounding these properties.

To ensure this spaciousness, GCBs cannot be more than two-storeys high, and cannot occupy more than 35% of the plot area.

It also needs to have a minimum plot size of 1,400 sqm.

There are only about 2,800 GCBs in Singapore, and the high restrictions placed by URA allows it to remain exclusive.

As such, GCBs are able to command higher prices as compared to other types of landed property.

How Much Does a Good Class Bungalow Cost?

Luxury Insider Good Class Bungalow
Source: Luxury Insider

Before looking at how much you need to earn to be able to afford one, let’s take a look at how much GCBs usually cost.

After lurking around the internet, I realised that there is a range of prices for GCBs.

Some of these properties owned by well-known businessmen have details of them all over the Internet.

Here are some of the prices and details of these properties:

Property LocationPriceCost (psf)Owned By
Gallop Road$27 million $1,700 Founder of the HaiDiLao steamboat chain, Mr Zhang Yong
Brizay Park (off Old Holland Road)$33 million$1,108Yun Nam Hair Care boss, Andy Chua
Queen Astrid Park$44.5 million$1,271 Granddaughter of billionaire paint tycoon Goh Cheng Liang
Dalvey Road$93.9 million$1,804First Housing Board chairman and a former executive chairman of Singapore Press Holdings, Lim Kim San
Nassim Road$95 million$2,773Property developer OUE’s executive chairman Stephen Riady
Nassim Road$105.3 million$2,476Singaporean chairman of Hong Kong-based Winson Group, Tony Tung
Nassim Road$230 million$2,721Wing Tai Holdings chairman, Cheng Wai Keung

According to Knight Frank Research data for 2016’s transaction prices, each plot can fetch between $15.7 million and $44.5 million.


How Much Do I Need To Afford One?

money bag in front of house

Let’s assume that you’re a 30-year-old, single with no outstanding loans or debts.

For the cost of living for an average adult in Singapore, one of our SeedlyCommunity members, Jeraldine Phneah has a great write-up on this.

It can be broken down as below:

Monthly
Phone Bill $50
Parents $400
Transport $100
Lunch $100
Enjoyment $200
Income Tax $150
Personal Insurance $100
Total $1,100

Now, given that you’re planning to purchase a GCB, your expenditure might not mirror the one above.

However, for the purpose of this article, we will stick to the $1,100 figure.

You would like to pay off your GCB over 30 years – which is the maximum period allowed to enjoy the full 75% Loan-to-value (LTV) limit.

This is assuming that you have a good credit score, otherwise the LTV limit would be lower.

In order to make it slightly more achievable, we will be looking to purchase the slightly more affordable GCB – the $27 million Gallop Road property.

How Much Do You Need for a $27M GCB?

For a $27 million GCB
DownpaymentUpfront:$1,350,000
(5% of total cost)
Cash or CPF: $5,400,000
(20% of total cost)
Bank Loan Total Cost: $20,250,000
(75% of total cost) over 30 years
Monthly Repayment:Around $75,865* (assuming annual interest rates of 2.1%)
Cost to Maintain Property Monthly:Around $400
Total Needed Monthly Salary (after CPF):$77,365**
Monthly Salary (before CPF): $78,565
(CPF contribution capped at $6,000)

*Monthly repayment is calculated using the home loan calculator from OCBC

**Monthly requirement before CPF: $1,100 (expenses) + $75,865 (monthly repayment) + $400 (cost of maintenance) = $77,365

Taking CPF into account, you need to be making at least $78,565 to be able to afford your $27million property.

That’s more than 15 times the salary of an average salaryman in Singapore.

Mindblown Galaxy
Source: Tenor

Besides that, we are currently basing our assumptions on a best-case scenario:

  • You are able to afford that $1,350,000 downpayment
  • You are able to pay $5,400,000 in both cash and CPF (probably gotta touch some cash here)
  • You have other cash reserves for your emergency fund, investments etc
  • You still have money to pay for your Buyer’s Stamp Duty (BSD) 

Yes, don’t forget your Buyer’s Stamp Duty (BSD), which gets progressively more expensive as the price tag of your house increases.

Purchase Price/Market Value of Property BSD Rates (Residential Properties)
First $180,000 1%
Next $180,000 2%
Next $640,000 3%
Remaining Amount 4%

Based on the rates above, the BSD for a $27million could be about $1million. 🤯

This is also based on the assumption that this is your first property.

Otherwise, there’s also Additional Buyers Stamp Duty (ABSD) to take note of.

I guess we can all agree – you need a LOT of spare cash to be laying around to afford one of these precious homes.


How Much Do You Need for a $230M GCB Then?

33 Nassim Road Good Class Bungalow Wing Tai Holdings
Source: Edgeprop

Now, aren’t you curious how much you would need to afford the $230million jewel nestled at 33 Nassim Road?

Let’s do some quick calculations:

For a $230 million GCB
DownpaymentUpfront:$11,500,000
(5% of total cost)
Cash or CPF: $46,000,000
(20% of total cost)
Bank Loan Total Cost: $172,500,000
(75% of total cost) over 30 years
Monthly Repayment:Around $646,255* (assuming annual interest rates of 2.1%)
Cost to Maintain Property Monthly:Around $1200
Total Needed Monthly Salary (after CPF):$648,555
Monthly Salary (before CPF): $649,755
(CPF contribution capped at $6,000)

(At this point, using $1,100 as monthly expenses just seem like a joke now. But we shall stick to it for consistency.)

Along with the assumptions made earlier, you would need a monthly $649,755 salary to pay for this place.

This translates to a $7.8million annual salary.

Whoa.

Not even our prime minister has such a salary.

Total Debt Servicing Ratio (TDSR)

There’s also Total Debt Servicing Ratio (TDSR) to consider.

TDSR is a framework to ensure that people borrow, and banks lend, responsibly.

It limits the amount borrowers can spend on debt repayments to 60% of their gross monthly income.

For the $230million property, your monthly income actually has to be $1,077,091 to be able to get a successful loan.

Siao liao.

Either that or you can place a larger downpayment right at the start.

Other Things to Take Into Account

The high costs of owning a GCB does not stop at its upfront costs.

Besides having to fork out high monthly repayments, having such a big space would mean bigger bills to pay too.

This includes:

  • Higher property taxes
  • Costly home insurance
  • A much larger renovation bill
  • More expensive furnishings, utilities bills…

You get my drift.

Are Good Class Bungalows Achievable Then?

Now that we’ve seen the intimidating numbers, does it mean that GCBs are unattainable then?

Well, apparently not.

Since there are 2,800 plots around in Singapore, thousands of people are actually able to afford it. 🤔

Also, we can imagine that the wealthy would have a financial base solid enough to pay such houses in cash.

So perhaps they don’t need that high of a salary to sustain a monthly repayment, but clearing these payments in a swift, billionaire-ish way instead.


Are Good Class Bungalows Worth the Money?

Hands Holding A House

While it seems like these properties come at an unimaginable, out-of-the-world price tag, it might be just another money-making tool for the elite.

You know, through flipping properties and all that jazz.

I guess that’s how the rich get richer too.

It kinda amazes (and intrigues) me that here we are trying to make smarter personal finance decisions and fretting over which HDB project to get, while these businessmen are having a totally different ball game altogether.

If you’re a commoner like me interested to get some burning property questions answered, hop on over to our SeedlyCommunity!

About Xue Miao
A millennial who is learning to adult. She doesn't believe in the rat race and hopes to live on a farm someday.
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