You are here

Median size of new sales continues to shrink in H1

Different picture emerges in CBRE's study on resale deals, with median unit size remaining at about 1,200 sq ft since 2007

CBRE studied URA Realis caveats information lodged for purchases of non-landed private homes - excluding executive condos (a public-private housing hybrid) - PHOTO: SPH


WHILE the median size of new private apartments and condos sold by developers continued to contract in the first half of this year and is down 41.5 per cent from 2007, the median size of units bought in the resale market has changed little over this period, according to a study by CBRE (view infographic) .

This is the result of a difference in supply profile in the two markets: developers have been minting a higher proportion of smaller units in recent years to help address affordability issues (while propping up per sq ft prices), while older, completed projects tend to have a better selection of larger units that are appealing to those with deeper pockets looking for bigger homes.

CBRE studied URA Realis caveats information lodged for purchases of non-landed private homes - excluding executive condos (a public-private housing hybrid).

The median size of new private apartments and condos sold by developers shrank 10 per cent to 743 sq ft in the first half of this year from 829 sq ft for the whole of last year.

Your feedback is important to us

Tell us what you think. Email us at

The H1 median unit size compares with 1,270 sq ft in 2007 during the pre-global crisis property boom when it was the trend for developers to build large units to cater to strong demand by well-heeled foreign buyers especially in the luxury segment.

For resale transactions, on the other hand, CBRE found that the median size of units has been consistent at around 1,200-plus sq ft over the past seven and a half years. This could be because unit sizes in existing developments are bigger, CBRE said.

The firm also observed that the H1 2014 median transaction price quantum for resale deals of S$1.34 million - compared with S$0.96 milllion for new sales - shows that resale buyers are willing to pay more in absolute price quantum to enjoy more space, priced at around S$1,110 psf, lower than that for new homes (S$1,245 psf). "Resale buyers could also be upgraders and investors who have stronger financial muscle," CBRE added.

In terms of absolute price quantum, the H1 2014 median price of S$960,800 for new sales reflects an 11 per cent decline from last year. That said, on a longer timeframe, the figure has remained stable at around S$1 million for several years.

"The market has... supported the S$1 million threshold, regardless of size and the psf price rate simply because Singapore has a viable alternative in the form of public housing flats," reasoned CBRE executive director (residential) Joseph Tan.

"Buying an HDB flat continues to be an attractive fall-back as those who can't afford to fork out S$1 million for a private apartment or condo will turn to HDB flats. As long as wages remain stable and in line with inflation, the S$1 million threshold is the magic number that will stay for a long time to come," he added.

Mr Tan also expects current unit sizes for new private homes sales to prevail until land prices shift, as developers will build according to what is affordable to buyers.

For new sales by developers, the median psf price has risen 31 per cent, from S$949 psf in 2007 to S$1,245 psf in H1 2014.

The latest figure though marks an 8 per cent drop from 2013 as developers have had to clip their price expectations following the introduction of the total debt servicing ratio (TDSR) framework in July 2013. CBRE's analysis shows that 500-800 sq ft units have been the most sought after, with their share of new sales rising to 38.6 per cent in H1 2014 from 34.4 per cent in 2013, 29.8 per cent in 2012 and 26 per cent in 2011.

This reflects developers' strategy of minting a higher ratio of "compact units" to keep lump sum prices affordable to buyers in the face of successive cooling measures that crimped loan-to-value limits for investors, topped by the TDSR rollout.

Shoebox units (under 500 sq ft) too saw a revival in their share of new homes sales to 19.1 per cent in H1 after easing to 13-odd per cent in 2012 and 2013. In 2011, the shoebox unit share was 15.1 per cent.

On the back of growing popularity of small units, the percentage of new homes sold by developers that were below 1,000 sq ft has climbed steadily to 72 per cent in H1 2014 from 24.4 per cent in 2007.

Century 21 CEO Ku Swee Yong was surprised that the median resale transacted unit size has remained constant at around 1,200-odd sq ft since 2007, given that the stock of completed shoebox units has increased. He estimates that there are now about 8,000 completed units that are under 500 sq ft each out of a total stock of some 230,000 non-landed private homes (excluding ECs). Ten years ago, there could have been around 500 shoebox units out of a total non-landed stock of 150,000, he added. "(Moreover,) since TDSR's introduction, there has been a constraint on transactions of big units because for large quantums, TDSR bites worse." On the median resale unit size holding at around 1,200 sq ft, Mr Ku said: "A higher portion of buyers in the resale market could be upgraders with a family, rather than pure investors who are buying just to get a rental income.

"Secondly, in the resale market because you've seen the completed physical unit, you may not be comfortable with buying a small unit, whereas for new sales, most developers sell one bedders without a show unit," Mr Ku added.

"What all this means is that the people who are holding shoebox units may find it difficult to find buyers," he suggested.

DTZ's South-east Asia chief operating officer Ong Choon Fah highlights that buyers may find it more affordable to pick a unit in the new sales market not only because of a wide selection of small units at developer launches but also because of the progress payment scheme based on the stages of a project's physical completion.

"Whereas if you buy a completed property in the resale market, you have to pay the full price almost immediately and your total loan commitment kicks in straight away."

*SRX flash estimate shows uptick in condo resale in Sept

*7 in 10 new private condos sold in H1 at under S$1.25 m

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to