Median prices of one- and two-bedders in 1Q2023 jump 31.3% y-o-y in the RCR: Savills

The demand for one- and two-bedroom units in Singapore has been on a consistent, steady rise, pushing up the median price for similar-sized units in the Rest of Central Region (RCR) to $1.76 million in 1Q2023 – a 31.3% y-o-y increase from $1.34 million in 1Q2022, according to a report by Savills Singapore.

The report examined transaction data for non-landed private residences above or equal to $2,000 psf and up to 800 sq ft. It noted that the median prices for one- and two-bedroom units in this size range had gone up from $1.58 million in 1Q2022 to $1.63 million in 1Q2023 – an increase of 3.4% every year.

Outside Central Region (OCR) had also seen a notable uptick of 15.3% y-o-y, from $1.21 million in 1Q2022 to $1.39 million in 1Q2023.

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Alan Cheong, executive director of research at Savills Singapore, said buyer preference is increasingly shifting to smaller apartments and buyers are willing to pay a premium for them. Even prior to the pandemic, smaller unit sizes had been popular, due to their more affordable price quantum.

Recent sales data also indicated an upward trend in the proportion of transactions for one- and two-bedroom units against total new home sales, going up from 21.4% in 1Q2022 to 47% in 1Q2023. The Savills report suggested that this rising popularity for smaller unit types could be attributed to their rental potential and proximity to key amenities.

Recent launches such as The Botany at Dairy Farm and Sceneca Residence showed that demand for these smaller-sized units was strong. At the 268-unit Sceneca Residence, 72.7% of the sales were attributed to the smaller units, sold at an average price of $2,082 psf.

Cheong observed that buyers’ buying behaviour in the new sales market point to a desire for homeownership, driven mainly by budget. He added that rising land and construction costs have been passed onto the buyers, particularly through the pricing of smaller-sized units.

Based on the findings of its report, Savills Singapore is maintaining its forecast that private residential property prices will increase by 7% in 2023.