MORE MONEY, LESS SPACE
The surge in sales was due to a confluence of reasons. Due to remote working and the experience of full home-based learning during the pandemic, more people have come to value their privacy and personal space.
In a study by PropertyGuru released in September last year, 36 per cent of Singaporeans said they were looking to purchase a new property in the next two years due to the need for more personal space in the places they were living in then.
While young families sought more space and larger homes, singles shopped for smaller properties, showed PropertyGuru’s Consumer Sentiment Study in the second half of 2022. Correspondingly, the property market saw a rise in resale transactions across the board, both in private and public housing.
As housing demand rose, so did property prices. Pandemic-led construction delays exacerbated the situation, pushing demand and property prices onto an upward trajectory.
With home prices higher amid a rising interest rate environment, the costs of acquisition of homes became more expensive.
In 2022, the average floor area for non-landed homes transacted below S$1.5 million was less than 1,000 sq ft. With the average floor area of five-room flats coming in at about 1,265 sq ft, it is not surprising that such units, especially if they are located in prime districts, are appealing even if they do cost S$1 million.
There is also demand from private home buyers seeking to cash out from their condominiums and move to HDB flats, especially if they are heavily leveraged. The situation is aggravated by the growing unwillingness of HDB flat owners to lower their sale and rental prices as the costs of moving to a new home have also gone up for them.