June 4, 2008

The incredible shrinking condo

Compact city studios under 500 sq ft an emerging trend

By Fiona Chan, Property Reporter

A TINY studio under construction near Farrer Park may well be the smallest private apartment to be built in Singapore.

It squeezes a bay window, a teeny kitchenette, a bathroom and space for a bed into just 312 sq ft - about half the size of a squash court.

The unit - part of the new Kent Residences in Kent Road - is the most extreme example of an emerging trend in private housing: compact, capsule condos within the city.

Targeted at young singles and property investors, some new studios have shrunk in size to as little as 300 to 400 sq ft, as developers try to make their homes more affordable amid rising costs.

At least 20 new projects launched within the past year have had units smaller than 500 sq ft, which was almost unheard of before last year.

Half of these projects went even further, cutting their smallest units to under 400 sq ft, making them on a par with those in famously space-squeezed cities such as New York and Hong Kong.

Shoebox-sized studios are not entirely new here. A few older condos like Mountbatten Lodge have units less than 400 sq ft in size.

What's new is the recent proliferation of such projects, especially in Farrer Park, Balestier and Dhoby Ghaut. Most are built by boutique developers and have under 100 units.

Thanks to the property boom last year, home prices in these areas start at just below $1,000 per sq ft (psf) and go up to $1,600 psf. For a 400 sq ft condo, this translates to well below $700,000.

'Construction costs are going up and space is becoming very expensive, so developers have to offer something that is affordable for the majority of home-buyers,' said Ms Peggy Ngiam, project director of Huttons Real Estate Group.

Her firm has marketed several projects with unusually small units, including Thomson V Two in Upper Thomson Road, where half the 74 units were under 500 sq ft, with the smallest just 355 sq ft.

With a typical unit priced at a mere $377,000, the project sold out within a day.

In fact, most of these boutique projects are fully sold, and the most recent launches have seen good take-up rates.

Ms Ngiam said buyers are a mix of locals and foreigners. Some are single professionals while others are investors looking for good rental yields.

At Citigate in Rangoon Road, which was launched on Monday, 22 of its 32 units were sold within a day. The smallest unit, a 441 sq ft studio, is expected to fetch rentals of $3,000 to $3,500 a month, she said.

Small units also reflect growing demand from singles who want to live in the city on a tight budget, said DTZ Debenham Tie Leung senior research director Chua Chor Hoon. She said developers focused on building large apartments last year and may now see a shortage of small ones.

But other experts warned that buyers may not realise how small these units really are.

'In the last market run-up in 1996, when prices got higher and higher, the units got smaller and smaller,' said Mr Colin Tan, head of research and consultancy at Colliers International. Even then, those units were rarely under 500 sq ft, and came without today's bay windows and air-con ledges, which eat into liveable space, he added.

While most projects offer showflats, the smallest units are often sold on the basis of their floor plans. At Kent Residences, which has just 13 units, buyers were shown only a model of the project and its floor plans.

'In most cases, when people see the finished flat they have bought off the plan, they say it's smaller than they expected. Can you imagine what that would be like for a 300 sq ft unit?' said Mr Tan.

[email protected]

A 300 sq ft apartment is roughly the size of...

# Two of the Old Chang Kee kiosks in front of Ngee Ann City

# Seven ping-pong tables

# Ten standard-size office workstations

# Half an average three-room flat, and about a quarter of an average five-room flat

# Half the size of a squash court