Private condos in Singapore have been getting smaller over the past 15 years, with new launches now offering significantly reduced median unit sizes compared to 2010. It’s a trend largely driven by affordability constraints, cooling measures, and changing buyer demographics—but are these smaller units actually meeting homeowners’ needs, or is it just a way for developers to keep price quantums in check?
A Buyer’s Dilemma: Space vs Affordability
For many homebuyers, choosing between space and affordability has become an unavoidable trade-off. Take a working professional in her late 30s, who recently bought a compact two-bedder in a new launch condo near the city fringe. At just over 650 sq ft, the unit was priced at an average of over $1.8 million, making it a manageable investment given her financial plans. However, after considering the unit’s tight layout and limited storage space, she quickly realised it wouldn’t be a comfortable long-term home.
Instead of moving in, she decided to rent it out while continuing to stay in her current place, citing that a three-bedder in the same project would have cost her over $2.5 million, which was out of reach. Despite being designed for two, the compact unit felt restrictive—a sign of how new condos are increasingly catering to investors rather than owner-occupiers.
Her case isn’t unique. Private home prices have risen 76.9% from 2010 to 2024, forcing developers to prioritise compact living over spacious homes. This has resulted in a sharp increase in per square foot (PSF) prices, with new condo layouts adjusted to maintain manageable price quantums for buyers.
New Condos Are Getting Smaller – Here’s How Much Space Has Been Lost
Across different segments of the private condo market, the shrinkage varies:
Prime (CCR) new condos – 20.6% decrease (1,044 sq ft → 829 sq ft)
Suburban (OCR) new condos – 13.4% decrease (1,044 sq ft → 904 sq ft)
City fringe (RCR) new condos – 4.5% decrease (947 sq ft → 904 sq ft)
The impact is also felt in the resale market, where older, more spacious units are still available, but their median sizes are also on a downward trend:
Prime (CCR) resale condos – 11.5% decrease (1,302 sq ft → 1,152 sq ft)
Suburban (OCR) resale condos – 17.5% decrease (1,227 sq ft → 1,012 sq ft)
City fringe (RCR) resale condos – 19.4% decrease (1,216 sq ft → 980 sq ft)
Why Are Developers Building Smaller Units?
Several key factors have driven this shift:
1. Loan Restrictions & Cooling Measures – Since 2013, stricter Total Debt Servicing Ratio (TDSR) rules have capped mortgage borrowing power, limiting buyers’ budgets.
2. Surging Private Property Prices – With home prices up nearly 77% in the past 15 years, developers have had to keep unit quantum manageable to maintain buyer demand.
3. Investor Preferences – Smaller units have historically seen stronger rental demand and are easier to offload in the resale market.
4. Government Regulations – In 2012 and 2019, URA implemented guidelines to prevent excessive unit fragmentation, limiting the number of shoebox units in each project.
However, while new homes are getting smaller, developers have adapted layouts to enhance liveability. Many modern condo layouts now feature flexible spaces, more efficient use of bay windows and storage areas, and interchangeable dining and living spaces to make compact homes feel larger.
Will New Condos Keep Shrinking?
Government measures have already helped curb the downsizing trend. For instance:
In 2019, developers’ balcony bonus gross floor area incentives were reduced from 10% to 7%, ensuring more space is dedicated to functional living rather than oversized balconies.
In 2023, URA mandated that at least 20% of new Central Area condo units must have a net internal area of at least 70 sqm (753 sq ft) to ensure a reasonable size for small families.
Additionally, with resale HDB flats in prime locations becoming increasingly attractive, some private home buyers are choosing spacious resale HDBs over compact new condos—which may put pressure on developers to reconsider extreme downsizing.
Final Thoughts
While smaller condos may be the new normal, the key question for buyers is whether these units are truly functional and suited for long-term living. Layout efficiency is becoming more important than absolute size, and with URA stepping in to regulate extreme downsizing, we may see a shift toward more practical yet compact homes in the years ahead.
Stay Updated and Let’s Get In Touch
At PLB Insights, we aim to provide comprehensive real estate information. Should you have any questions, do not hesitate to reach out to us!
