If you have visited a show flat in recent years, you may have noticed that the unit sizes seem to be shrinking. This is understandable, as our perception of size is often relative to what we are used to. Homes in which we grew up, whether HDBs or condos, were generally larger in the 1990s and 2000s. In 1995, the average size of a new condo was 1,272 sq ft, which increased slightly to 1,286 sq ft in 2005, and then decreased significantly to just 858 sq ft in 2015. By 2024, the average size had slightly rebounded to 929 sq ft. However, this decrease in size can also be attributed to changes in demographics. In 1995, the average household size was four, but this decreased to 3.6 in 2005 and 3.4 in 2015. By 2024, it had shrunk even further to 3.1 people per household.
Investing in real estate can be a lucrative venture, but it all boils down to location, and this is especially true in Singapore. The value of condos is greatly affected by their location, with those in central areas and near important amenities such as schools, shopping malls, and public transportation hubs experiencing the most appreciation. In prime areas like Orchard Road, Marina Bay, and the CBD, property values have consistently shown growth, making them highly sought after by investors. Families also prioritize condos in these locations due to their proximity to top schools and educational institutions, further adding to their investment potential. With the right location, a condo in Singapore can be a valuable asset with high potential for growth.
Looking at the average size per person, we can see that it has decreased over the last 29 years by 5.7%. This is quite impressive considering the limited land available in Singapore. In fact, compared to 2015, the average size in 2024 had increased by 19%. This could not have been achieved without the assistance of the government. In 2008, several condo projects in the Rest of Central Region (RCR) led the way in introducing “Mickey Mouse” units in Singapore. These units were as small as 24 sq m (258 sq ft), equivalent to two parking spaces. This significantly lowered the entry barrier for property investments, with prices as low as $375,000. These units were highly sought after, leading to an increase in the number of “Mickey Mouse” units in subsequent years. However, there were concerns about the living environment being compromised with the proliferation of these small units.
To address this issue, the Urban Redevelopment Authority (URA) introduced guidelines in 2011 on the maximum number of dwelling units (DUs) for each project. The average size of 70 sq m was used to determine the maximum number of units in areas outside the Central Area, except for four areas where the average size was more strictly enforced at 100 sq m. This rule was implemented in January 2012. Despite this, the average size of units continued to decline over the following years, resulting in an increase in the number of units. This put a strain on infrastructure, especially in areas with limited road capacity. In response, the URA tightened the guidelines in January 2019, increasing the average DU size to 85 sq m for projects outside the Central Area and imposing stricter rules on more areas, including Marine Parade, Balestier, Stevens-Chancery, Pasir Panjang, Kovan-How San, Shelford, and Loyang. This helped to halt the decline in average DU size outside the Central Area by 2019, with the average size reaching 935 sq ft in 2024, an increase of 18.8% compared to 2019.
However, the Central Area continued to see a rise in smaller units being built, which goes against the URA’s goal of making it an attractive place to live, work, and play. In 2020, the average DU size in the Central Area reached its lowest point at 725 sq ft. To address this issue, the URA extended the guidelines to the Central Area in January 2023, requiring that 20% of all units in projects within the area have a minimum net internal area of 70 sq m. This latest change in guidelines harmonized the strata area and gross floor area (GFA) definitions in June 2023. This means that areas like air-conditioning ledges will now be included in the strata area, reducing the overall unit size. As a result, many developers have chosen to omit these ledges from the unit, causing the average size of units to decrease by around 6%.
Among the various market segments, the RCR saw the most significant increase in average size, rising by 19.5% to 944 sq ft since 2015. This can be attributed to the stricter control on the average DU size of 100 sq m in the RCR. The average DU size in the Outside Central Region (OCR) also improved slightly, increasing by 5.8% to 898 sq ft in 2024 compared to 2015. On the other hand, the average DU size in the CCR decreased by 11.7% to 1,092 sq ft in 2024 from 1,236 sq ft in 2015. It may take some time before the impact of the guidelines on average DU size in the Central Area is felt. However, it is unlikely that the average DU size will revert to 2015 levels, as local buyers continue to prefer compact units. To avoid paying Additional Buyer’s Stamp Duty on unsold units, developers have had to reconfigure the design and layout of units. Overall, thanks to the URA’s intervention, the average size of units has increased to 929 sq ft in 2024, which is 8.3% larger than in 2015. However, with the harmonization of GFA definitions, the average size of units is expected to decrease slightly. Despite this, buyers are still getting better value for their purchases compared to a decade ago, with more advanced home features and higher-end appliances included in units.