Are Smaller Unit Types Still In Demand?
Published on 20/07/2024
Demographics of Purchasers (1 & 2 Bedrooms)
The demand for smaller residential units, specifically one and two-bedroom apartments are heavily influenced by these specific demographic groups:
• Singles
• Divorcees
• Retirees
• Married Couples (1 or no child)
• Investors
These groups are typically more inclined towards smaller housing options due to their lifestyle preferences and/or financial considerations.
Trends in Key Demographics
Source: Singstat
Rising Number of Singles (2000-2023)
• In 2000: 760,400
• In 2023: 1,056,000
• The number of single residents has consistently increased over the years, showing a clear trend towards smaller households.
Source: Singstat
Rising Number of Divorcees (2000-2023)
• In 2000: 61,800
• In 2023: 154,200
• Divorce and separation have led to an increase in demand for smaller, independent housing units.
Source: Singstat
Aging Population (2000-2023)
• In 2000: Over 235,000 residents aged 65 and above
• In 2023: Over 717,000 residents aged 65 and above
• Retirees often prefer smaller homes that are easier to maintain and better suited to their needs.
Source: Singstat
Rising Number of Smaller Households (2000-2023)
• For 1-Person Households: Increasing Trend
• For 2-Person Households: Increasing Trend
• For 3-Person Households: Stable Trend
• For 4 or more Person Households: Decreasing Trend
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Smaller households have become more common, driven by social and demographic changes.
Profitability of Smaller Units
Source: URA
An analysis of units below 786 sqft, usually 2 bedrooms and smaller, that were held for 36-48 months indicates higher profitability for smaller units purchased at launch. Many owners sell their units upon fulfilling the Seller Stamp Duty period.
This data suggests that smaller units remain a financially viable investment for both homeowners and investors.
Overview
The consistent rise in singles, divorcees, retirees, smaller households and property investors underscores the continued demand for smaller unit types. These units not only cater to evolving demographic trends but also demonstrate strong profitability in the real estate market.
Contact us to find out more about the profitability of new launch investment units today!