High per square foot prices of new condos could be increasingly irrelevant to buyers

[SINGAPORE] Singapore’s new condo buyers are a hardy lot.

They are unfazed by the war in the Middle East, which is squeezing energy supply, fuelling inflation, hurting economic growth and rattling equity markets.

In late March, Pinery Residences sold 544 units, or 92.5 per cent of its 588 units over its launch weekend. The project, which is linked to Tampines West MRT station, has its units atop a 121,600 square foot (sq ft) mall.

Before this, the riverfront condo River Modern in the River Valley area sold 90 per cent of its units – 410 of the 455 in total – over its launch weekend. The apartments sold were priced from S$1.5 million for a two-bedroom unit to S$6.7 million for a four-bedder. 

Buyers also appear fine paying bullish per square foot (psf) prices for new condo units. 

Average selling prices were S$2,546 psf for the 544 units sold at Pinery Residences and S$3,266 psf for the 410 units sold at River Modern.

Perhaps buyers are behaving rationally; homes here are seen as safe-haven assets in a tumultuous world. Importantly, they may be ascribing increasingly less importance to high psf prices of new condos. 

Floor area harmonisation

One, a new condo home’s saleable area typically captures more accurately a unit’s actual usable space.

New harmonisation of floor area definitions by the Urban Redevelopment Authority (URA), Singapore Land Authority, Building and Construction Authority, and Singapore Civil Defence Force kicked in for all development applications submitted to URA on or after Jun 1, 2023.

Key changes included measuring floor areas to the middle of the wall, including all strata areas as gross floor area and excluding all voids from the strata area.

With harmonisation of floor area, units in new condo projects generally do not feature large air-conditioner ledges and big bay windows, among others. 

In short, the substantially lower psf price of an old condo home versus a new unit could be partly attributed to a developer adding space-wasting features to the square footage they could sell.

Space efficiency

Two, as land prices rise, developers have become adept at providing highly efficient new condo units.

Think of boxy homes instead of curvy or odd-shaped ones. While new condo projects may have less distinctive and differentiated designs, buyers get homes that prioritise functionality.

An old condo home may have an odd-shaped room, or a column that cuts awkwardly across the living room, or a long and narrow corridor. Can an interior designer work around such problems?

In contrast, a new condo home might offer balcony space that seamlessly integrates with the living area or the flexibility to add or remove a wall, thereby creating or removing an extra room as needs change.

Furthermore, many new condo homes maximise natural light, making spaces appear larger and more inviting.

Ultimately, a well-designed compact-sized unit with efficient and flexible space can be highly liveable. 

Modern lifestyles

Three, condo developers build new homes that meet modern lifestyle needs.

Think of a unit having the ideal number of bedrooms and bathrooms that a household needs. For example, a couple with one or two kids may find a new 850 sq ft condo home with three bedrooms more suitable than an older 1,100 sq ft condo unit with two bedrooms.

Critically, it may not be possible to add a bathroom to a flat with insufficient bathrooms or a private lift to an old, large 4-bedder condo home.

Moreover, households that hardly cook might place little value on an old condo unit’s spacious wet kitchen.

Indeed, a resident of a compact new condo home can access a wide array of thoughtfully curated common facilities. Want to host a large gathering on the odd occasion? Use the condo’s function room.

Large new condo projects may feature multiple pools, large function rooms, dining pavilions, co-working spaces, a well-equipped gym, a spacious lawn and inviting spaces for children, pets or meditation.

Crucially, new condo buyers perhaps willingly pay a high price psf because when they want to sell their unit, many potential buyers prioritise having a modern fit-for-purpose home.

Unsurprisingly, developers meticulously craft well-designed and functional homes, as many new condo buyers today are owner-occupiers.

With hefty additional buyer’s stamp duty applying to Singapore citizens and permanent residents buying second and subsequent homes, as well as non-PR foreigners and entities buying any home, many new condo buyers are local and PR first homebuyers.

Absolute price 

Buying a home is a major financial commitment. 

In 2025, the monthly household market income among resident households was S$24,673 for the 80th percentile and S$33,616 for the 90th percentile, which work out to annual income of S$296,076 and S$403,392, respectively.

A condo home priced at S$1.5 million to S$2 million represents 5.1 to 6.8 times an annual income of S$296,076. Meanwhile, a unit that costs S$2 million to S$3 million represents five to 7.4 times an annual income of S$403,392.

Multiple rules govern the amount that an individual can borrow or draw from Central Provident Fund savings to fund a condo purchase.

For example, the highest loan-to-value that determines the maximum amount one can borrow from a financial institution for a home loan is 75 per cent. 

Also, the total debt servicing ratio applies to a borrower of a home loan from a financial institution. The portion of gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for, is capped at 55 per cent.

Count on any buyer to carefully work out his budget first and then focus on finding the product that best meets his needs.

Pay a high psf price? Fine if a home has the right attributes and the absolute price is acceptable.

As land and construction costs rise, developers will continue to set new benchmark psf prices at condo launches islandwide. However, barring a major economic downturn, buyers will stomach paying higher psf prices for new condos and downplay the importance of psf prices when seeking a dream abode.