The number of new non-landed residential units of 500 sqft or less sold in 2009 was 696 based on caveats in URA’s Realis system, an all-time high for units of these sizes tracking back to 1995. CBRE Research compared sales volumes of these shoe-box sized units and found that the sales volumes spiked to 1,285 for units with sizes between 500 sq ft and 800 sqft in 2009.

In the first four months of 2010, there have been 211 transactions of units of 500 sqft or less and 322 transactions of units between 500 sqft to 800 sqft in the new home market. In the primary residential market, the total number of non-landed units of 800 sqft or less comprise about 23% of the 2,300 new sale caveats lodged to date.

Joseph Tan, Executive Director, Residential, CBRE said, “What started as a notable trend in 2009 appears to have caught on in the early part of 2010. Small format units form a significant proportion of the overall burgeoning sales volume that we have seen in the first four months of this year. Developers continue to provide these small format units and homebuyers seem to be biting.”

Since the start of 2010, the volume of transactions in the private residential market has been strong. The first four three months of this year saw 4,380 units sold in the new home market. If the pace of sales maintains throughout the year, the total sales of new homes could be comparable to last year’s volume of 14,688 units.

These small units remain popular and are commonly included as one-bedroom units in new project launches. For example, units at the Altez have a substantial number of small units ranging from 527 sqft to 816 sqft and units at 76 Shenton have unit sizes ranging from 596 sqft to 624 sqft. Buyers are attracted to the relatively smaller quantum for such units where the total price appears to be more affordable compared to the usual family-sized units. In addition, developers can maximize their returns by selling these units at a higher price per-square-foot.

Tan added, “When these units are eventually completed, the most likely occupier profile would consist of expatriate tenants or Singaporean single professionals. And as lifestyle choices in Singapore continue to evolve in a cosmopolitan environment and the demand for these smaller units remains strong, developers will continue to provide small-format units in the residential market.”