Your search results

The Unexpected Choices: Why Some Singaporean Homebuyers Opt for Smaller Condos (Even When They Could Afford More Space)

Posted by Jayson Ang on February 2, 2026

| 0

TLDR

In Singapore’s property market, buyers often prioritize factors beyond just size. Many choose smaller units within their budget due to better layouts, locations close to MRT stations, or newer developments offering efficient designs and fewer renovation costs. Older homeowners may downsize strategically to better match family needs and boost retirement savings. Investors might prefer smaller units with higher rental yields and lower capital commitments for reduced risk. These choices reflect thoughtful planning rather than impulsive attempts to maximize space. The key is to focus on comfort, convenience, or financial returns instead of just square footage. Consulting real estate professionals can help align purchases with long-term goals amid tight supply and varied market conditions.

In Singapore, there’s a prevalent mindset among property buyers, whether for HDB flats or condominiums: acquire the largest possible unit within your budget. This often stems from a lingering concern that failing to maximize square footage now will result in higher costs later. However, it’s often surprising to observe that some homebuyers, despite having the financial capacity for a more spacious residence, consciously choose a more modest option. We’ve spoken with real estate professionals to shed light on these less common decisions and understand the rationale behind them.

1. Prioritizing Layout and Location Over Sheer Size

A real estate agent recounted a recent transaction where clients faced a choice between a 1,200 sq. ft. three-bedroom unit and a 700 sq. ft. two-bedroom unit. Despite their budget clearly allowing for the larger option, the clients ultimately selected the smaller apartment. The agent explained:

“For the specific development they desired, no units larger than 700 sq. ft. were available. We explored other projects in the vicinity and found a 1,000 sq. ft. three-bedroom unit. However, after viewing it, they declined. That particular three-bedroom unit was further from the MRT station, had a less practical layout with no enclosed kitchen, felt somewhat confined, and lacked a proper service yard. Expanding their search radius was not an option they wished to pursue beyond that neighborhood. Consequently, they settled for the 700 sq. ft. unit, despite being able to afford a more sizable home elsewhere.”

Such scenarios are becoming more frequent in 2025, exacerbated by a tighter supply of resale properties. Buyers might discover an ideally situated resale project only to find that larger unit types (three-bedroom, four-bedroom, or more) are unavailable. This can lead them to purchase a smaller two-bedroom unit, saving the difference for a potential future upgrade.

2. Strategic Downsizing for Evolving Family Needs

Another motivation for selecting a smaller unit is a deliberate move towards right-sizing, particularly among older homebuyers whose children may soon be leaving the nest. One instance involved a couple who recently sold their landed terrace house, where they had resided with two of their adult children.

The proceeds from their landed property sale were more than sufficient for a three or four-bedroom condominium. Yet, they disregarded recommendations for larger units and actively sought a two-bedroom apartment. The agent involved shared:

“One child was planning to get married and move out within a year or two, and the other child already had their own place. A key reason for their move from the landed property was their age; maintaining a larger home had become increasingly challenging. So, they opted for a smaller unit, conveniently located within walking distance of one of their children.”

From a financial planning perspective, choosing a two-bedroom unit also allowed them to bolster their retirement savings, giving them the confidence to purchase a condominium rather than further downsizing to an HDB flat.

3. The Appeal of New Launches Over Resale Properties

A real estate professional described a case where a couple chose a new launch two-bedroom unit at ELTA over a three-bedroom unit at the resale Clement Canopy. Both developments were situated in close proximity within the Clementi area, making location a non-determining factor. The significant difference lay in the price: the ELTA two-bedroom unit was approximately $1.94 million, while the Clement Canopy three-bedroom unit was around $2.18 million, a difference of about $240,000.

For this $240,000 saving, they acquired:

A more efficient layout, typical of post-harmonization projects like ELTA.
Greater potential for appreciation, as ELTA is a newer development by about six years.
No concerns about immediate renovation costs, as the price difference comfortably covered any future needs.

Furthermore, new launches typically present fewer valuation issues, as the developer’s price is generally accepted as the fair valuation. In contrast, resale properties sometimes face valuation discrepancies that may require buyers to top up with cash. Given that the couple had alternative accommodation until ELTA’s completion, the smaller, newer two-bedroom unit proved to be the more sensible choice.

4. Optimizing for Investment Returns as a Landlord

An agent shared a scenario involving a couple implementing a “sell one, buy two” strategy, where they were deciding on their second investment property. Their combined sale proceeds and savings were sufficient to acquire a three-bedroom unit (approximately 1,050 sq. ft.) at DUO Residences.

However, after further viewings, they changed their minds and opted for a smaller two-bedroom unit (around 678 sq. ft.) at The M. Their reasoning was based on optimizing rental yields and minimizing capital commitment. The DUO Residences three-bedroom unit, costing about $2.1 million, had a projected gross rental yield of 3.4% to 3.7% per month (based on $6,000 to $6,500 rental income).

Conversely, The M’s two-bedroom unit, at about $1.4 million, offered a higher yield of 4.4% to 4.9% (based on $5,200 to $5,800 rental income). The reduction in living space was not a concern, as the unit was intended solely for rental income, not personal use. Beyond higher yields, the lower capital investment also translated to reduced risk, a significant advantage given their apprehension about taking on separate mortgages.

In these instances, a clear, forward-thinking strategy – rather than an impulsive decision to buy the largest available unit – ultimately served the buyers’ objectives. This underscores the importance of thoroughly discussing your intentions for a property. Instead of merely asking, “What can I afford?” it’s more beneficial to inquire, “What am I aiming to achieve by purchasing this property?”

The key is not to maximize square footage at all costs, but to maximize comfort, convenience, or financial returns. Reach out to us if you’d like to explore how these considerations apply to your specific situation and help make a well-informed long-term decision.

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 …

Mandarin Top 5

5 Reasons : Why Singapore’s Rental Market Is Still Lucrative For Property Investors

Jayson Ang – June 8, 2024 –

Singapore's property market has always been an attractive investment option due to its stability and potential for high returns. While...

Mandarin Top 5

Navigating the Singapore Property Market as a Foreign Investor: What You Need to Know

Jayson Ang – August 7, 2024 –

Singapore, a thriving hub of business and commerce in Southeast Asia, boasts a highly developed economy and a robust real...

All Blog Posts Buying Tips Opinion

A Executive Summary Guide to the Singapore Real Estate Market 2023 and Beyond …

Jayson Ang – December 10, 2022 –

TLDR The Singapore real estate market is vibrant, driven by a strong economy, stable business climate, and attractive investment opportunities....

All

Mortgage Interest : The True Cost of Buying and Owning Properties in Singapore

Jayson Ang – March 16, 2023 –

TLDR When considering buying a property in Singapore, it's crucial to understand the true costs and risks involved. High monthly...

All Buying Tips

Is the Singapore Property Market Set for a Dip in 2024?

Jayson Ang – January 26, 2024 –

TLDR The Singapore property market is experiencing shifts with Morgan Stanley adjusting its outlook on major developers. A forecast predicts...

All Buying Tips Opinion Selling Tips

Is Price Per Square Foot (PSF) Still a Reliable Metric in Singapore’s Property Market?

Jayson Ang – June 26, 2026 –

TLDR Price Per Square Foot (PSF) is increasingly a poor measure of property value in Singapore due to regulatory changes...

Mandarin Top 5

Top 5 Reasons to Invest in Commercial Property in Singapore – Expert Insights!

Jayson Ang – March 23, 2025 –

Singapore, a thriving business hub in Southeast Asia, offers a robust real estate market with diverse investment opportunities. While residential...

Mandarin Top 5

Top 5 Factors : Buying Resale vs New Launch Property in Singapore: Which is Better?

Jayson Ang – November 3, 2024 –

The decision to invest in a property in Singapore can be both exciting and daunting, especially when faced with the...

All Blog Posts Buying Tips

Are You Considering Paying Off Your Mortgage Loan Ahead of Time? Is It the Right Financial Move?

Jayson Ang – May 11, 2023 –

TLDR When considering mortgage options in Singapore, it's essential to understand the differences between HDB loans and bank loans. HDB...

All Buying Tips Opinion

HDB Owners Missing Out on the “Ultimate Upgrade” to Landed Living

Jayson Ang – October 3, 2024 –

TLDR Over the past two decades in Singapore, the trend of HDB residents upgrading to landed properties has fluctuated. While...

Mandarin Top 5

5 Most Iconic Landmarks In Singapore’s Landscape

Jayson Ang – June 14, 2024 –

Singapore's landscapes is renowned for its innovative and dynamic approach to urban development, boasting some of the most iconic landmarks...

Mandarin Top 5

Exploring Singapore: The Top 5 Surprising Facts You Never Knew

Jayson Ang – March 13, 2025 –

Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...

All Blog Posts Opinion

Singapore’s Population Hits 6.11M — What It Means for Housing Demand

Jayson Ang – April 10, 2026 –

TLDR Singapore’s population has reached a record 6.11 million, driven mainly by non-residents rather than local births. With fertility at...

All Buying Tips Opinion

Leasehold vs. Freehold Condos in Singapore: A Decade of Data

Jayson Ang – December 14, 2025 –

TLDR In Singapore’s property market (2014-2024), leasehold condos often outperform freehold in short-term holding (around 10 years) due to lower...

Mandarin Top 5

5 Singapore’s Best Property Investments for 2023: Where to Find Growth and Income

Jayson Ang – March 20, 2024 –

The Singapore property market has long been a sought-after investment destination, with its stable economy and growing population making it...

Mandarin Top 5

5 Tips for Renting Property in Singapore

Jayson Ang – March 15, 2024 –

Renting property in Singapore can be a challenging task, especially for those who are new to the country. With Singapore's...

Mandarin Top 5

Top 5 Best Green Spaces to Picnic in Singapore

Jayson Ang – May 5, 2025 –

Singapore, a bustling city-state known for its modern architecture and vibrant culture, is also home to numerous green spaces that...

All Buying Tips Opinion Reports

Are Million-Dollar HDB Landed Homes Still Worth A Look In 2025 Despite Their Age?

Jayson Ang – October 5, 2025 –

TLDR Old HDB landed homes, like those in Whampoa, are rare and now fetch over $1.5 million, but their value...

All Buying Tips Opinion

The Significance of Choosing the Right Condo: A Real-Life Tale of Two $1.8 Million Investments with Significantly Different Results.

Jayson Ang – August 13, 2024 –

TLDR When contemplating property investments in Singapore, consider various factors like rental performance, unit count, access to train lines, and...