Thursday, December 15, 2011

Average condo size used in GLS calibration shrinks again

Business Times: Thu, Dec 15
(SINGAPORE) The average size of condos used to estimate housing supply in the Government Land Sales (GLS) Programme has shrunk again - as Singapore's planning authority keeps pace with market trends.

BT's analysis of the first-half 2012 GLS Programme shows that the average size (gross floor area) per home for private condo sites in the Rest of Central Region (RCR) and Outside Central Region (OCR) has each been trimmed by five square metres to 85 sq m and 95 sq m respectively, compared with the current H2 2011 programme.

However, the average home size assumption for executive condo (EC) sites remains unchanged at 100 sq m in OCR, which is where suburban mass-market homes are located (for example, Jurong, Ang Mo Kio and Sembawang).

ECs are a public-private housing hybrid. An Urban Redevelopment Authority (URA) spokesman said: 'It was observed that ECs tend to have a larger average gross floor area (GFA) per housing unit than private residential projects in general as they typically cater to housing demand from families. Therefore, there is a separate set of space standards for EC sites in the H1 2012 GLS Programme to serve as a guide on the number of estimated homes on these sites.'

In recent years, no EC sites have been offered in RCR, which covers locations such as Bishan, Toa Payoh, Little India, Queenstown and Geylang.

BT selected sites by location and then divided each of their maximum GFA by the number of potential homes estimated by the government to arrive at the average size assumed per home.

URA said it regularly reviews the space standards (the average GFA per housing unit) used to estimate the number of homes that can be generated from GLS sites. 'In these reviews, we take into account the sizes of residential units in housing projects (including ECs) which have obtained planning approvals in recent years. The most recent review, which covers residential projects in all locations, was done this year and the updated space standards were adopted for the H1 2012 GLS Programme,' said the URA spokesman.

'We will continue to review the space standards for GLS sites on a regular basis and make adjustments to them when necessary to keep abreast of changes in the market.'

DTZ's SE Asia chief operating officer Ong Choon Fah said: 'The recalibration of average housing unit size in the GLS Programme is a good move as it better reflects what's happening in the market.'

Analysts say such regular exercises also reduce the risk of the state underestimating the supply of homes from the land it sells.

Market watchers pointed to the shoebox apartments that gained currency in 2009 as part of the trend towards smaller average home sizes. Developers took to building such units to keep lump-sum apartment prices affordable to buyers while they increased the per square foot prices.

Even in more mainstream condo projects generally the proportion of units below 1,000 sq ft has increased in the past 18 months or so.

Some property consultants say the reduction in average household size, more singles living on their own and smaller TVs, computers and the like have also supported the popularity of small apartments.

CBRE executive director Joseph Tan observes that in a typical condo development with one, two, three and four bedders, the one-bedders used to fly off the shelves fastest in the past. 'But in the past six months, we've noticed that take-up for one bedders has slowed and it is the two-bedders or two-plus- study apartments that are more popular.' This could be due to changing buyer demographics and competition from ECs.

'Once the price of a one-bedder (private condo) stretches past $600,000, young couples may find greater value in buying a two-bedder in an EC project,' he added.

Source: Business Times © Singapore Press Holdings Ltd.

Team Marshe
Martin Koh/ Sherry Tang
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1 comment:

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