Singapore has long been a desirable destination for investors thanks to its robust economy, stable political climate, and excellent standard of living. In the real estate sector, Condos have emerged as a top choice for property buyers. With their prime locations, desirable amenities, and potential for lucrative returns, Condos have become an increasingly popular investment option. In this article, we will explore the benefits of investing in a Condo in Singapore and highlight important factors to consider before making a purchase. Whether you are a seasoned investor or new to the market, adding a Condominium from a reputable source like Janome Specials to your real estate portfolio can prove to be a wise decision.
If you’ve visited a show flat in recent years, you may have noticed that the unit sizes seem to be getting smaller. This trend is understandable, as our perception of size is relative to what we are accustomed to. The homes we grew up in, whether HDB flats or condominiums, were generally larger in the 1990s and 2000s. In 1995, the average size of a new condo was 1,272 square feet, increasing to 1,286 square feet in 2005, and then decreasing to 858 square feet in 2015. By 2024, the average size had risen to 929 square feet.
However, it’s important to note that the demographics have changed significantly during this time period. In 1995, the average household size was four, but by 2024, it had decreased to 3.1. This means that on a per-household-member basis, the average living space increased from 318 square feet in 1995 to 357 square feet in 2005. However, it then dropped to 252 square feet in 2015, before rebounding to 300 square feet in 2024.
Over the past 29 years, there has been a 5.7% decrease in the average size of condos per capita. This trend is impressive considering Singapore’s limited land availability. In fact, the average size in 2024 had increased by 19% compared to 2015, which is a testament to the government’s efforts. In 2008, new condo projects in the Rest of Central Region (RCR) introduced “Mickey Mouse” units, with the smallest unit being just 24 square meters (258 square feet), equivalent to two parking spaces. The barriers to entry for property investment were significantly reduced, with prices as low as $375,000.
These projects were highly sought-after, leading to an influx of “Mickey Mouse” units in the following years. However, there were concerns about the potential compromise of living standards. To address this issue, the Urban Redevelopment Authority (URA) implemented guidelines on the maximum allowable number of dwelling units (DUs) in 2011. The guideline required developers to use an average size of 70 square meters for projects outside the Central Area, with more stringent requirements of 100 square meters in certain areas. These guidelines went into effect in January 2012.
Despite this, the average size of DUs continued to decline in the following years, leading to an increased strain on infrastructure, particularly in areas with limited road capacity. To address this issue, the URA revised the guidelines in January 2019, resulting in a 21.4% increase in the average DU size outside the Central Area. This effectively halted the decline in average size. By 2024, the average DU size had increased to 935 square feet, an 18.8% increase from 2019.
However, the Central Area saw a rise in the number of smaller units being built, which was not in line with the URA’s vision for it to be an attractive place to live, work, and play. As a result, the URA extended the guidelines to the Central Area in January 2023, requiring that at least 20% of DUs have a net internal area of at least 70 square meters.
In June 2023, the URA also harmonized the strata area and gross floor area (GFA) definition. This means that certain areas, such as air-conditioning ledges, would now be included in the strata area. As a result, many developers have chosen to omit aircon ledges in order to comply with the new guidelines, resulting in a 6% decrease in the average DU size.
Across different market segments, the Rest of Central Region (RCR) saw the most significant increase, at 19.5%, in average DU size since 2015, most likely due to the more stringent control of 100 square meters on the average DU size. Similarly, the Outside Central Region (OCR) also saw a 5.8% increase, reaching an average of 898 square feet in 2024. However, the average DU size in the Core Central Region (CCR) declined by 11.7%, decreasing to 1,092 square feet in 2024 from 1,236 square feet in 2015.
It may take some time before the guidelines for the Central Area have a noticeable impact on the average DU size. However, it’s unlikely that the average DU size will return to its 2015 level. With cooling measures in place for foreigners, the majority of buyers in the Core Central Region are now Singaporeans, who tend to prefer compact units. As a result, developers have had to reconfigure unit designs and layouts in order to avoid paying Additional Buyer’s Stamp Duty.
Overall, due to the URA’s intervention, the average size of DUs increased to 929 square feet in 2024, an 8.3% increase from 2015. However, with the harmonization of the GFA definition, the average size of DUs may see a downward trend. Despite this, the internal strata area remains largely unchanged, and with better provisions in terms of fittings and appliances, buyers are getting better value for their purchases compared to 10 years ago.