Smaller homes are easier to sell.
In order to lure cost-sensitive buyers, property developers in Singapore have taken to building smaller residential units to keep home prices palatable.
This chart from CBRE shows that median home sizes have dropped to just around 800 square feet (sf) in 2015, compared to roughly 1,000 sf in 2010.
Prices have dropped in tandem with home sizes, with the median price per unit dropping to under $1 million from $1.2 million in 2010.
In a research report by PropertyGuru, Wong Xian Yang, Senior Manager of Research and Consultancy at OrangeTee, said that developers have to be extremely careful when it comes to pricing their new projects.
"For developers, it would be prudent to market their new projects at a more affordable quantum in order to attract a bigger pool of buyers. For mid-sized, mass market private homes located in the OCR, the sweet spot price range will typically be between S$1.1 – 1.2 million. Projects beyond that will be a stretch for most looking to invest within this area," he said.
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