Small private homes popular with HDB dwellers

In the first three months of 2014, HDB dwellers bought a total of 892 non-landed private homes, of which 51 percent or 453 units consisted of smaller units of up to 800 sq ft, revealed DTZ's analysis of caveats and reported in the media.

This is an increase from the 44 percent share recorded for the entire 2013.

Notably, the proportion has been on an upward trajectory in recent years, from 2010's 25 percent to 2011's 32 percent and 36 percent in 2012.

In comparison, smaller units of up to 800 sq ft accounted for only 29 percent of non-landed private home acquisitions by those with private addresses. The majority of their purchases involved units larger than 1,000 sq ft.

DTZ noted that the ratio of private home purchases of up to 800 sq ft increased possibly because HDB dwellers are more active in the primary sales market.

"Those with HDB addresses could be buying a higher proportion of smaller units as the investment sum is much smaller; it comes down to affordability and managing risks," said Ong Choon Fah, Chief Operating Officer of DTZ Southeast Asia.

"Moreover, if they buy from developers, they enjoy progressive payment terms i.e. they pay for the purchase price according to the phases of the project's physical completion. If they are buying for investment, they are unlikely to want to sell until after the project has been completed - as typically, you see a price spike just before a project receives Temporary Occupation Permit (TOP). Every little bit helps," she added.

Moving forward, small private condominiums or apartments are expected to continue to be highly favoured by HDB owners, said market watchers.

With this, developers will likely continue to build more of such units to supply to buyers who are conscious of lump-sum pricing.

Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg

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