Selecting a favorable location is crucial when it comes to real estate investment and this holds especially true in Singapore. The location of a condominium has a significant impact on its value, making it an important factor to consider. It is common knowledge that properties situated in central areas or near essential amenities like schools, shopping malls, and public transportation hubs have exhibited a consistent increase in value. In Singapore, locations like Orchard Road, Marina Bay, and the Central Business District (CBD) have always been a top choice for investors due to their prime positioning. Furthermore, condos near renowned schools and educational institutions have become highly sought-after by families, making them even more attractive as investments. The constant emergence of new condo launches in these coveted areas only adds to the investment potential of these properties. Therefore, if you are looking to invest in real estate, it would be wise to keep an eye out for new condo launches in these prime locations for a lucrative opportunity. For more information on upcoming condo launches, please visit New Condo Launches.
If you have visited a show flat in recent years, you may have noticed that the unit sizes seem to be smaller. This is understandable, as our perception of size is often influenced by what we are accustomed to.
In the past, the average size of homes in Singapore, whether HDBs or condos, was larger in the 1990s and 2000s. For instance, the average size of a new condo was 1,272 sq ft in 1995, 1,286 sq ft in 2005, and 858 sq ft in 2015. However, as demographics have changed, with the average household size decreasing from four in 1995 to 3.1 in 2024, the average unit size has also decreased.
In fact, over the last 29 years, the average size of condos per capita has shrunk by 5.7%, which is commendable given the limited land space in Singapore. This reduction in size would not have been possible without the intervention of the government. In 2008, a number of condo projects in the Rest of Central Region (RCR) started offering smaller units, with the smallest being 24 sq m (258 sq ft). This significantly reduced the barriers to entry into property investment, with units selling for as low as $375,000.
The popularity of these “Mickey Mouse” units led to an increase in their supply in subsequent years. However, there were concerns about the impact of these smaller units on the overall living environment in Singapore. As a result, the Urban Redevelopment Authority (URA) issued guidelines in 2011, regulating the maximum number of dwelling units (DUs) in a development. The URA required developers to use an average size of 70 sq m to determine the maximum number of DUs in projects outside the Central Area. In some areas with more restricted land space, such as Telok Kurau, Kovan, Joo Chiat, and Jalan Eunos, the average unit size had to be at least 100 sq m. This regulation came into effect in January 2012.
However, despite these efforts, the average DU size continued to decline over the next few years, putting pressure on infrastructure in areas with limited road capacity. In response, the URA tightened their guidelines in January 2019, resulting in an increase in the average DU size by 21.4% from 2015 to 85 sq m. This helped to arrest the decline in average DU size outside the Central Area, which reached a low of 804 sq ft in 2018. By 2024, the average DU size had further increased to 935 sq ft.
However, the Central Area saw an increase in the construction of smaller units, which went against the URA’s goal of making it an attractive area for living, working, and playing. To address this issue, the URA extended their guidelines to the Central Area in January 2023, requiring all projects to have at least 20% of their DUs with a net internal area of at least 70 sq m.
Another guideline change in June 2023 was the harmonization of the strata area and gross floor area (GFA) definition. This meant that certain areas, such as air-conditioning ledges, would now be counted as part of the strata area if they were exclusive to a unit. As a result, some developers chose to omit these ledges in their unit designs, leading to a decrease in the average DU size by 6%.
Across different market segments, the Rest of Central Region (RCR) saw the most significant increase of 19.5% in average size to 944 sq ft. This was likely due to the more stringent control of 100 sq m on the average DU size, which affected the RCR more than other areas. In the Outside Central Region (OCR), the average DU size also improved by 5.8% to 898 sq ft, while in the Core Central Region (CCR), it declined by 11.7% to 1,092 sq ft.
It may take some time before the impact of the guidelines on average DU size in the Central Area is fully felt. However, it is unlikely that the average DU size will go back to its 2015 level. This is because, in recent years, local buyers have made up about 75% of the buyers in the Core Central Region, and they tend to prefer more compact units. To avoid paying Additional Buyer’s Stamp Duty on unsold units, developers have had to reconfigure their designs and layouts, resulting in smaller units.
Despite these changes, it is worth noting that the average DU size in 2024, at 929 sq ft, was still 8.3% larger than in 2015. This is due to the provision of better fittings and features, such as smart home technology and high-end appliances, which are now considered basic in new condo developments. With these improvements, buyers are getting better value for their purchases compared to 10 years ago.
In conclusion, although the average size of units in Singapore has decreased in recent years, it is commendable that the government has taken measures to regulate the size of units and maintain a good living environment. With the latest harmonization of GFA definitions, it is likely that the average DU size may continue to decrease in the future. However, buyers can still expect to get better value for their purchases with the provision of high-end features and appliances in new developments.