Here's why buyers prefer small, premium property units
The median prices of new units went up 3.4%.
In the first quarter of 2023, the median price of new non-landed private residences with sizes up to 800 sq ft and priced at or above $2,000 psf climbed 3.4% year-on-year (YoY), according to a Savills report.
The Outside Central Region (OCR) witnessed a significant YoY increase of 15.3% in median new sales prices for the same size segment. In the quarter, the prices reached $1.39m, compared to $1.21m in 2022.
Property purchasers are turning their preference to smaller units with premiums, said Savills.
“This trend was evident in both the [rest of central region] (RCR) and [outside central region] (OCR) segments based on the transactions that took place in Q1/2023. Even prior to the pandemic, smaller unit sizes had been popular among HDB upgraders and investors due to their more palatable price quantum.” Savills stated.
The proportion of same-sized units transacted compared to the total new sales showed a notable increase from 21.4% in the first quarter of 2022 to 47% in first quarter 2023.
In the same time period, the OCR segment's proportion increased from 9.1% to 54.6%, whilst the RCR segment's proportion increased from 18.5% to 26%.
These proportions are similar to the rise in median prices for new non-landed private residences priced at or above $2,000 psf and up to 800 sq ft.
Savills maintains its prediction of a 7% growth in private residential property prices for 2023.