3 Reasons Why Small Condo Units Are Popular
Updated: Apr 28, 2020
Queuing to Buy Property, even during Covid-19 Dorscon Orange status! Studio units new launch fully sold out over 1 weekend, and very limited 1 and 2 bedroom units. Why? Especially why small condo units are so popular?
Watch the vlog below. If you prefer to read, scroll down further.
Queuing for masks or toilet papers?
No. No. No.
They are Queuing to buy property and this happen on the 3rd week of February, right in the middle of the Covid-19 situation!
This particular project is a CCR condo, priced around $2100 to $2500 per square foot. That is higher than the average price of condos in the entire Singapore. It was sold more than 360 units out of 522 units. That is about 70% sold in one day! Wow!
And the part to note is, on the first weekend of launch, all the studio units are fully sold out! 1 bedroom almost fully sold and left with 3 units. Very limited 2 bedroom units. What does this tell me?
One, Singaporeans are all still very rich!
And two, small condo units are very popular!
Nowadays, small units ranges from around over 400sqf to 600sqf, and some may be wondering why would people want to buy?
I believe there are few factors. But today let me share with 3 reasons why small condo units remain so popular.
Firstly, there has been a rising demand for small condo units
Between 58% to 63% of all new condos sales are units that are less than 800sqf. This sales figure has been on an uptrend over the past few years. There are many factors why, but I believe one issue could be the price point. Such units are usually lower in quantum which many younger buyers and investors can afford to buy. Having a Condo address and staying in a condo will likely be something young buyers are hoping to achieve. And the good healthy upside potential is something investors are looking forward to.
Secondly, Prices likely to go up
To understand if the price may go up in the future, we should look at the supply and demand. We know the demand is there base on the first reason, but what about the supply?
If you remember, back in Oct 2018, URA announced the new rules and guidelines for Developers started from 17 Jan 2019. This new rule will limit the number of small units to be built per development in some locations. The supply looks more or less going to drop, and the upside potential in the future looks bright for the owners and investors of such units today.
Thirdly, healthy upside potential
Looking back in first half of 2019, 88% to 91% of all resale new units less than 800sqf make profits. These are the sellers who bought direct from developers. These should come as no surprise when you understand the first 2 reasons why small units are popular.
Above are 3 basic reasons. But if you want to narrow down to the one condo with the best possible upside potential and healthy rental demand, there are other factors to consider and look out for. Investing or upgrading to a condo should not take it likely as it involves your financial planning, loans, commitment and others.
It will be at your best interest to engage a professional to advise and guide you along, to plan which property to purchase, when to purchase and plan for an exit strategy too.
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**all data and information extracted from URA and OrangeTee & Tie Research & Consultancy. The content and information provided is for general information only. It should not be treated as an invitation or recommendation to buy or sell any specific property or product. Each illustration in the presentation or article is based on current information as at the date of publication. Readers are to consider the content as one of the many factors in making investment decision and should seek specific investment advice. Readers should carry out their own due deligience or verification of such information. The author and publisher of the article are not liable for any losses. All right reserved.