5 Smart Techniques That Resourceful Homebuyers Utilize to Overcome Restrictions on Home Loans
TLDR When it comes to navigating the complex world of home loans and property acquisition, it's crucial to be aware...
Read More
TLDR
We explore the significant impact of digital marketing strategies on business growth in today’s competitive landscape. It highlights the importance of leveraging social media platforms, search engine optimization (SEO), and content marketing to enhance brand visibility and customer engagement. The article also discusses the role of data analytics in understanding consumer behavior and tailoring marketing efforts for better results. By adopting these strategies, businesses can improve their market reach, boost sales, and achieve long-term success.
The COVID-19 pandemic triggered Singapore’s first lockdown in April 2020, leading to the implementation of work-from-home (WFH) arrangements and flexible work schedules to curb the spread of the virus. As WFH becomes the new norm, it is widely assumed that buyers now favor larger condo units to accommodate their remote working needs.
In this piece, we delved into the resale records of condo units lodged with URA from 2016 to present. Our investigation involved a comparison of unit sizes sold before and after the pandemic, in a bid to uncover the truth behind the alleged preference for spacious homes.
Surprisingly, despite the challenging times, the resale market remained resilient with a total of 8,713 caveats lodged in 2020, surpassing the 2019 figure of 7,543. A staggering 16,375 caveats were recorded in 2021, but the number dipped to 12,124 in 2022 and further down to 10,228 last year. As of now, this year has seen a total of 3,930 resale caveats lodged, indicating a steady demand for condo units in the market.
Average sizes for resale units fell during pandemic
The average size of resale units decreased from 1,223 sq ft in 2020 to 1,100 sq ft last year, but has now increased to a modest 1,123 sq ft this year. It is noteworthy that the size of resale units has consistently been above 1,000 sq ft, whereas new units have not yet surpassed this standard.
Smaller Condo Units on the Rise: The Shift in Resale Market Trends
The percentage of units sold measuring between 1,001 to 2,000 sq ft saw a slight decrease from 55.3% in 2020 to 46.8% last year, and has remained steady at 46.8% this year. Despite this decline, these medium-sized units remain popular in the resale market, making up the majority of condo units sold. Last year, a significant 4,791 units within this size range were sold, surpassing both smaller units (measuring 501 to 1,000 sq ft with 3,898 transactions) and even units below 500 sq ft (with only 968 transactions).
D’Leedon and The Minton are standout performers in the resale market this year, both offering units ranging from 1,001 to 2,000 sq ft. D’Leedon achieved an average price of $1,945 per square foot (psf) with 23 units sold, while The Minton sold 15 units of similar size at an average price of $1,475 psf. Despite being located in different districts, District 10 and 19 respectively, these leasehold developments have attracted buyers, with D’Leedon completing its construction in 2014 and The Minton in 2013.
Contrary to common belief that buyers prefer larger units for work-from-home setups, there has been an increased demand for small units of 500 sq ft and below post-pandemic. In 2020, these small units made up 6.8% of the total resale volume, which rose to 9.5% last year and currently stands at 8.2% this year. Sims Urban Oasis and Commonwealth Towers are examples of popular leasehold condos offering small units, with 11 units from Sims Urban Oasis selling at an average price of $1,832 psf and nine units from Commonwealth Towers fetching $2,131 psf on average. Both developments were completed in 2017, with Commonwealth Towers standing out in District 3 and Sims Urban Oasis in District 14.
One interesting trend is the increasing demand for units of 1,000 sq ft and below, accounting for 36.7% of the total resale volume in 2020 and rising to 47.4% this year, surpassing the previously dominant units ranging from 1,001 to 2,000 sq ft, now making up 46.8% of the total resale volume.
Glimpsing What Lies Ahead
The demand for small living spaces under 500 square feet is expected to continue, driven by the growing number of individuals living alone, which increased from 217,300 in 2022 to 222,700 last year.
Conversely, units ranging from 501 to 1,000 square feet are becoming more popular, meeting the needs of the majority of households in Singapore, typically consisting of two to three people. In fact, there were 334,200 two-person households and 315,500 three-person households reported last year. With an average household size of 3.11 individuals, a slight rise from 3.09 in 2022, these medium-sized units provide a good balance between space and functionality.
Moreover, as of January last year, a new regulation on unit sizes was implemented. A minimum of 20% of the units in newly developed non-landed properties in the central region must have a net internal area of at least 70 sq m (753 sq ft). This requirement excludes voids, balconies, aircon ledges, and other external spaces, focusing solely on the living space within the unit. Consequently, the latest units being put up for sale are notably larger. When these units enter the resale market, they will undoubtedly increase the variety of resale options available.
Interestingly, the average price growth for condominium units ranging from 1,001 to 2,000 sq ft has exceeded that of smaller units. From 2020 to the present, these units have experienced a strong growth of 26.1%, with an average price of $1,595 per square foot. On the other hand, the smallest units of 500 sq ft or less had the slowest price growth at 25.3%, reaching an average of $1,828 per square foot. Units measuring between 501 and 1,000 sq ft saw slightly stronger price growth, increasing by 25.5% to $1,776 per square foot.
Although many families desire a larger living space, they need to find a balance between their wish for more room and their financial situation. For example, a 2,000 square foot condominium currently on the market is priced at a high $3.19 million, with an average price of $1,595 per square foot. On the other hand, a resale condominium of 1,000 square feet can be purchased for a more affordable $1.78 million, given its lower average price of $1,776 per square foot.
Unfortunately, the previous year only saw a modest 2.8% increase in median household income from employment, reaching an average monthly income of $10,869. While Singapore’s GDP grew by 1.1% during the same period, forecasts for this year indicate a relatively small increase ranging from 1% to 3%. In contrast, resale condo units ranging from 501 to 1,000 square feet experienced a significant 9.5% year-on-year price rise, while larger units measuring 1,001 to 2,000 square feet also saw a notable 6.8% increase in average price.
Conclusion
As the pandemic spread, many thought that buyers would prefer larger homes. However, our detailed analysis of resale data shows a different reality. Contrary to popular belief, the average size of resold condominium units has been decreasing since 2020. In fact, based on this year’s transactions, the average resale unit now measures 1,123 square feet, a noticeable decrease from 1,223 square feet in the previous year. Additionally, resale units have been accounting for a larger portion of condominium sale transactions since 2021.
However, it’s important not to be misled by the numbers. While most resale units fall within the 1,001 to 2,000 square feet range, it appears that buyers are increasingly interested in smaller units. Yes, you heard correctly – compact units of 500 square feet and below are becoming very popular among buyers. This trend is not just temporary; with the increase in single-person households, these cozy units are expected to continue to have strong demand. Nowadays, households are constantly seeking a balance between space and affordability, particularly due to the rising prices of resale condos that have surpassed both median household income and Singapore’s GDP.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Singapore’s Urban Landscape Transformation: 5 Key Things You Need to Know
Singapore's urban landscape has undergone significant changes over the years, with the city constantly evolving to create a sustainable and...
Read More
Top 5 Reasons : Why Developers Seem Hesitant To Commit To New Projects In Singapore
Singapore, a thriving global city-state, has long been known for its robust economy and attractive real estate market. However, in...
Read More
Exploring the Resale Condo Market? Here’s What to Watch Out For!
TLDR The impact of COVID-19 on Singapore's real estate market has been significant, leading to a surge in demand for...
Read More
Building A World-Class Nation: Top 5 Facts About Singapore’s Developed Infrastructure
Building A World-Class Nation: Top 5 Facts About Singapore's Developed Infrastructure Singapore is known for its high standard of living,...
Read More
What Is The Cost Of Constructing A Landed Property In Singapore?
TLDR Building a landed property in Singapore can be a costly endeavor, with prices ranging from $300 to $500 per...
Read More
Quick Guide for Condo Sellers: Timeline to Sell Condo in 2023
TLDR When selling a condominium in Singapore, understanding the critical steps is key. First, ensure you are not liable for...
Read More
The Top 5 Reasons To Invest In Singapore Property
Singapore, a small island nation with a thriving economy, has long been considered an attractive destination for property investment. The...
Read More
Top 5 : Benefits of Investing in Older vs. Newer Singapore Property Market Condos for International Buyers?
Singapore's property market has long been an attractive investment destination for international buyers, offering a stable and well-regulated environment with...
Read More
5 Things to Know About the Singapore Property Tax System
5 Things to Know About the Singapore Property Tax System Here are 5 things you need to know about the...
Read More
5 Impacts Of The Singapore Government’s Cooling Measures On Property Investing
The Singapore government has implemented several cooling measures over the years to regulate the property market and prevent it from...
Read More
Discover 7 Reasons to Sell and Right-Size Your Property
TLDR The increasing trend of right-sizing properties in Singapore is driven by various factors such as lifestyle changes, financial gains,...
Read More
Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?
Singapore, a thriving city-state with a robust economy and a strong demand for real estate, has always been an attractive...
Read More
Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider
TLDR In Singapore, owning both an HDB flat and a private property has become complicated due to factors like Additional...
Read More
Discover the Top 11 Most Outstanding Condominiums in Singapore’s Holland Village Areas
Originally established in the early 1900s by Singapore's Dutch community, Holland Village was originally a residential area home to British...
Read More
Top 5 Most Common Red Flags To Watch Out For When Investing In Singapore Property
Investing in Singapore property has long been considered a lucrative and stable way to build wealth. However, like any investment,...
Read More
Top 5 Places to Learn About Singapore’s History
Singapore, a thriving metropolis with a rich history and diverse cultural heritage, offers numerous opportunities for visitors and locals alike...
Read More
Lessons from the Rollercoaster Ride: Homebuyers Share Their Singapore Housing Market Experiences
TLDR The Singapore housing market is a rollercoaster of unpredictable changes. Three homebuyers share their experiences: Tristan waited too long...
Read More
Mortgage Interest : The True Cost of Buying and Owning Properties in Singapore
TLDR When considering buying a property in Singapore, it's crucial to understand the true costs and risks involved. High monthly...
Read More
Buying a Second Property – 3 Key Factors to Consider
TLDR When navigating the complexities of purchasing a second property in Singapore, ensure you meet eligibility criteria, consider affordability factors...
Read More
