In 2020, the number of resold executive HDB units up by 12.8% year-on-year to 1,882 units and the number of resold five-room flats jumped climbed 10.3% year-on-year to 5,984.
Since the end of the circuit breaker in June last year, Singapore witnessed an increased in demand for larger homes, especially for older Housing and Development Board (HDB) flats built between 1980s and 1990s with generous floor areas.
PropNex CEO Ismail Gafoor noted that buyers have also been on the lookout for bigger private homes.
“The pandemic has changed the way we live and work, with people waking up to the realisation this indeed may be our new normal and we would have to re-evaluate our space needs and the expanded role the home plays in our lives,” he said in an article posted in Channel News Asia (CNA).
In fact, the number of executive units resold in 2020 shot up to 12.8% year-on-year to 1,882, while the number of five-room flats resold climbed 10.3% year-on-year to 5,984.
“The pace of increase in the sales of larger flats also exceeded the 4.6% rise in four-room HDB unit resale over the same period,” said Gafoor.
The number of three-room flats resold, on the other hand, declined 0.7% from 2019 to 2020, or its first annual drop since 2015.
“To be sure, this strong interest in larger flats, while turbocharged by work from home (WFH), is not a new trend. There has been steady demand for five-room and executive flats since 2014, when their resale volumes have posted year-on-year growth each year, with the exception of 2019,” explained Gafoor.
“But clearly this trend has come into sharper focus in 2020.”
He disclosed that the 10.3% annual increase in resale volume for five-room flats in 2020 was the highest since the 10.5% jump in 2016, while the 12.8% annual hike for executive flats was the largest since the 15.5% growth in 2018.
The average prices for larger units have also been on the uptrend, with the average per sq ft (psf) price for a five-room resale flat up 5.2% over the last quarter 2020, while those of executive flats increased by more than 4% during the last two quarters of 2020.
Over in the private housing market, a similar trend was also noted.
Gafoor shared that sales of new private homes, excluding executive condominiums (ECs), measuring 1,200 sq ft and above shot up by around 37% to 1,006 units in 2020—exceeding the 4% increase in sales posted for units below 1,200 sq ft during the same period.
“All regional sub-markets across Singapore witnessed a huge jump in sales of larger private homes (1,200 sq ft and up) since the end of the circuit breaker,” he said.
Despite the growing demand for larger homes, the increase—from a developer’s perspective—is not “significant enough to justify building fewer smaller units and allocating a lot more floor area to larger units, particularly for projects in the city or the city fringe where there tend to be more investors looking at smaller units”.
An analysis of sales transactions within the Core Central Region (CCR) demonstrated that sales for units below 500 sq ft have been on the uptrend, accounting for 15.8% of last year’s new non-landed home sales, an increase from 11.8% in 2019 and 7.6% in 2018.
“Most buyers are still quantum-sensitive, and developers will still need to offer a diverse range of unit sizes to fit different budgets,” said Gafoor.
Singapore has been a real estate hotspot in the Commonwealth of Nations and rich and affluent classes always like to have a second home in the city state.