The number of transactions for residential units below 500 sq ft rose to 625 in the third quarter from 349 in the previous quarter, according to the latest report from DTZ Research.
Of the 625 units, 87 percent were acquired from property developers, which reflects the current trend among developers to offer units with digestible quantum.
Small units have been gaining in popularity amongst buyers since “mickey mouse” flats picked up last year, said Chua Chor Hoon, Head of DTZ South East Asia Research. “The recent cooling measures, which increased the minimum cash payment, will make such units even more attractive as buyers have to downsize their purchases without having to increase the cash component,” added Ms. Chua.
The proportion of non-landed sub-sales to total non-landed transactions stood at 11 percent in Q3, slightly up from 10 percent in Q2. The sub-sales level has stabilised from 9 percent to 12 percent since the first set of cooling measures in September 2009, when the interest only loans and interest absorption scheme were removed.
The sub-sales level will likely remain low as prices are not escalating at a fast pace to justify flipping in a year, said Ms. Chua. The market is also flushed with liquidity from the low interest rate environment, with many home buyers looking to put more money into properties and buying with a longer-term holding time horizon in mind.
“For uncompleted properties, the buyers will decide whether to sell or hold for rental when the units are nearer completion,” said Ms. Chua.
DTZ’s analysis also revealed that the proportion of transactions in the prime districts of 9 to 11 declined from 25 percent in Q1 to 16 percent in Q3. The fall was attributed to both the dearth of new project launches in prime areas and the rise in homes for sale outside the prime areas.