Singapore has emerged as a top destination for real estate investment, attracting both local and foreign investors. The country’s strong economy, stable political climate, and high quality of life make it an ideal location for buying a condo. In fact, condos are among the most sought-after properties in Singapore due to their convenience, amenities, and potential for high returns. If you are considering investing in a condo in Singapore, there are a few important factors to keep in mind. This article will dive into the advantages of investing in a Singapore condo and provide insights on the considerations and steps involved in the process. Singapore Condo offers a lucrative opportunity for potential investors in the country’s thriving real estate market.
The average unit sizes in show flats have been shrinking in recent times, giving the impression that homes are getting smaller. This is due to the fact that our perception of size is relative to what we are accustomed to. In the 1990s and 2000s, the homes where we grew up, whether they were HDBs or condos, were larger. 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. In 2024, the average size was 929 sq ft. But these numbers need to be viewed within the context of changing demographics. The average household size has been decreasing over the years, from four in 1995 to 3.1 in 2024.
On a per-household-member basis, the average space in 1995 was 318 sq ft and increased to 357 sq ft in 2005. However, it dropped to 252 sq ft in 2015 before rebounding to 300 sq ft in 2024, a 19% increase. This shows that over the last 29 years, the average size of condos has shrunk by 5.7%. This is impressive given Singapore’s land constraints. In fact, compared to 2015, the average size in 2024 had increased by 19%. This would not have been possible without the intervention of the government. In 2008, several condo projects in the Rest of Central Region (RCR) introduced “Mickey Mouse” units, with the smallest being 24 sq m (258 sq ft), equivalent to two parking spaces. This significantly reduced the barriers to entry for property investment, with prices starting as low as $375,000. These projects were highly sought after and paved the way for the proliferation of “Mickey Mouse” units in the following years. However, there were concerns about the impact of these smaller units on the living environment.
To address this, the Urban Redevelopment Authority (URA) introduced guidelines on the maximum allowable number of dwelling units (DUs) in 2011. Developers had to use an average size of 70 sq m for projects outside the Central Area to determine the maximum number of DUs. This was increased to 100 sq m for four areas — Telok Kurau, Kovan, Joo Chiat, and Jalan Eunos. This guideline came into effect in January 2012.
However, the average size of DUs continued to decline, leading to a higher number of DUs and straining the infrastructure, particularly in areas with limited road capacity. In response, the URA tightened the guidelines in 2019, resulting in an increase in the average DU size outside the Central Area by 21.4% to 85 sq m. More areas were also required to meet the more stringent 100 sq m average DU size. This effectively halted the decline in average size outside the Central Area.
However, smaller units were still being built in the Central Area, which went against the URA’s goal of making it an attractive place to live, work, and play. In January 2023, the URA extended the guidelines to the Central Area, requiring 20% of DUs in all projects to have a net internal area of at least 70 sq m. Then, in June 2023, the URA harmonised the strata area and gross floor area (GFA) definition, with areas such as air-conditioning ledges being counted as part of the strata area. As a result, developers started to omit the aircon ledges in the DU design, leading to a decrease in average DU size by 6%.
When we look at the different market segments, the Rest of Central Region (RCR) saw the most significant increase in average size, with a 19.5% jump to 944 sq ft since 2015, probably due to the stricter control of 100 sq m for the average DU size. The Outside Central Region (OCR) also saw an improvement of 5.8% to 898 sq ft, while the Core Central Region (CCR) experienced a decline of 11.7% to 1,092 sq ft.
Although the URA’s intervention has led to an increase in average size to 929 sq ft in 2024, an 8.3% increase from 2015, the recent harmonisation of the GFA definition may result in a downward trend in average size. However, with smart home features being the standard and high-end home appliances becoming more common, buyers are still getting better value for their purchases compared to 10 years ago.