Friday , May 7 2021

Going big on space: Buyers see bigger homes amid pandemic



SINGAPORE: When the pandemic made the operation of the home the norm, conflicting Zoom meetings were a regular occurrence for Mr. David Tan and his wife, who live in a 914sqft Housing & Development Board (HDB) apartment with four room.

They had to settle in separate corners of the flat, which was often less than ideal because they were not configured for work.

But soon the pair will move to a larger nest – a 1,130sqft condominium unit in the same area.

“Now we can probably have a proper study, and we can set up another office in the bedroom to have a proper setup for Zoom meetings,” said Mr. Tan, an analyst in his early 40s.

Work-from-home (WFH) is the norm and more employers are becoming more flexible with their WFH arrangements. Given that we will be spending more time at home, I thought it would be natural to make it more enjoyable.

“You will (also) spend more time with family, so I thought, ‘Why not look for a bigger place?'”

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Mr Tan forms a growing group of buyers who have bought larger spaces, driven by the pandemic and its impact on lifestyle needs.

It is a trend that can be seen in various segments of homes, experts said.

Lee Ryan Tan’s managing director Tan Orange said that about eight in 10 clients he meets are now looking for larger flats, compared to six in 10 for the pandemic.

He noted that in addition to HDB residents who want to upgrade, he also has clients who have sold their condominiums to buy larger public flats.

BUYERS SNIPPING OF LARGER HDB FLATS

Data from analysts show that larger HDB resellers have become more popular later.

This is based on comparisons between pre-pandemic data from 2019, and from Q3 2020 to Q1 2021 – after the period ‘circuit breaker’ in Singapore.

One- to three-room flats are considered smaller units, while units with four-room and higher are considered larger.

Over these periods, average four-year sales rose about 18 percent for smaller HDB resellers, but rose about 34 percent for larger ones, according to Nicholas Mak, head of Research & Consultancy at ERA Realty.

He added that the biggest increase in sales was for five-room and executive flats. Average quarterly sales for this jump by about 40 percent.

ERA graffiti flats

Average four-year sales for five-room flats and executive flats increased the most. (Photo: ERA Realty)

As for the BTO market, Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, said sales are still dependent on the supply of vacant homes.

“Currently, most of the supply continues to be four-room flats and there has been no noticeable increase in larger flats such as five-room and executive flats released in recent launches,” she said.

Cultivation for larger private homes

The trend has also left a mark on the new private apartment segment.

The median size of purchased units grew from 710sqft to 743sqft, an increase of about 4.5% annually, said Mr Wong Xian Yang, head of research at Cushman & Wakefield Singapore.

“While this is not a major factor right now, buyers, especially homeowners, see a stronger need and are willing to spend a little more to have a dedicated workspace, such as a study, at home, as they expect to work at higher levels of distance. , ”Said Mr. Wong.

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Specifically, this is the case in the suburbs and suburban regions, where buyers tend to be first-time owners or upgraders who want to live in the unit, he said.

But units in the core region have intensified the trend, continuing to decline.

This may be because a majority of buyers of downtown units are investors, while affordability there is also more of a constraint, Mr Wong said.

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Even in recent times – from Q1 2021 to the quarter before, there has been a clear increase in demand for homes above 1,200 sqft, said OrangeTee & Tie’s wife Sun.

They noted a 72 percent increase in new home sales over 1,200 sqft, from 362 units in Q4 2020, to 623 units in Q1 2021. This includes land ownership, non-land and executive condominiums.

Another reason for the demand for larger units: “The price stability of properties in Singapore may also have driven some to buy larger units now for fear that the price increase may bring such units out of reach in the future,” Ms Sun said.

Mr. Tan, the buyer, echoed this: “Given also that we are seeing economic recovery, where normally things are going up, prices are going up – why not maybe just upgrade and buy a bigger place (now)?”

TREND NOT SEEN IN PRIVATE SALES MARKET

However, a growing interest in larger homes has not been observed in the private non-land resale market, said Mr Wong of Cushman & Wakefield.

“Given its already growing unit size making it easy to accommodate a study area, Singapore’s resale activity in Singapore remains characterized by affordable constraints that have driven the demand for shrinking unit size,” he said.

Ms Sun also said her data did not point to this trend.

Mr. Mak of ERA weighed that this could be because the potential of an en bloc cycle leads owners to stick to their properties, which tend to be older and larger.

This could also lead to fewer such resale transactions this year, he said.

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LANDED HOUSES

Finally, Mr Mak also said that hunger for country housing has grown, evidenced by the 6.7 per cent jump in prices for the segment seen in the first quarter of 2021.

Before the pandemic, an average of 385 new and resold country homes were sold each quarter in 2019, he noted.

But since the circuit breaker lifted, this figure has been from 650 to 869 every quarter.

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“Since the beginning of the pandemic and WFH culture, many people would rather have Roman houses, but not everyone can buy bigger real estate.

“Those who have the financial means to do so have driven the increase in country housing transactions. Furthermore, the rising prices of apartments also appeared to be land value value for money, resulting in higher demand for the last, ‘he said.

Going forward, the trend may indicate a greater need for developers to consider new ideas for their future developments.

They may want to reconfigure their unit mix to accommodate more large units, or have appropriate or facilities that support the culture of WFH, Ms. Sun said.


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