A new study found that the average size of condominium units on sites acquired through the government has been shrinking, and the trend was most evident in new projects located within the city fringe areas.
According to the report by The Straits Times, average sizes there dropped from 1,051 sq ft at Waterbank in Dakota Crescent in 2010 to 810 sq ft across three new projects launched within the region this year.
Conducted by SLP Research and Consultancy, the study examined condo projects that were launched on Government Land Sales (GLS) sites since 2010. It then derived an average unit size from the site’s maximum allowable gross floor area (GFA) and divided it by the number of houses to be built.
Over at the suburban areas – where majority of GLS condo sites were sold during the last six years – average GFA per unit shrank to 811 sq ft in four condos launched this year from 878 sq ft across six condo launches in 2010.
According to SLP International executive director Nicholas Mak, there are two reasons why a developer turn to building smaller units.
The developer could be trying to boost profit margins by increasing the psf price of the development or the move may have reflected the fact that the purchasing power of most homebuyers was curbed by the various property cooling measures rolled out by the government since 2010.
“The Additional Buyers’ Stamp Duty and Total Debt Servicing Ratio framework have limited the housing budget of many buyers. As a result, the absolute price quantum of the unit has become the primary consideration of a large majority of owners,” said Mak.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
