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  • Writer's pictureJoshua Loo

Bigger Properties Will Always Have Great Demand

Updated: May 28, 2020

I was recently browsing the internet when I came across this postulation called Moore’s law, which gave me an idea of how this might draw some similarities to the real estate market at the moment.

Based on a postulation from Gordon E. Moore, co-founder of Intel, he mentioned that the processing power of a microchip will double approximately every two years. This is based on the ability of scientists to be able to fit more transistors into that same space.

You might be wondering how does this relates to real estate. Let us take for example the microchip being an analogy for Singapore, and the number of persons living in Singapore is the transistors.

Increased efficiency of a microchip depends on the number of transistors that are found on it. In terms of real estate, this means that for authorities who are dealing in urban planning, increasing the number of people (aka transistors) within Singapore (aka microchip) and will result in huge growth! However, this is where the similarities end, as exponential growth in a countries’ economy, is not possible and sustainable.

Residential living areas will be needed to be reduced so as to provide spaces for more economic driven sectors. Of course, the housing rental market in Singapore does contribute to its economy, but in a smaller degree.

The authorities will then need to find a way to meet the demands of the growing population, this led to the implementation of the Singapore Improvement Trust (SIT) which later will be succeeded by the Housing & Development Board (HDB), whose core competency is to provide for quality, public housing to Singaporeans.

However, is quality directly correlated to flat sizes provided? A quick search online will spin out multiple reports on the decreasing sizes of flats in Singapore both in the public and private markets. Even with smaller flat sizes, an improvement in quality remains debatable as there are implementations in newer technologies as seen in the private market.

I believe this topic is divisive, so discussions will continue in another article.

Which Came First?

This brings about a confusing point on causality. Did the decreasing size of households lead to smaller units built by HDB and the private market or is it the other way round?

One way we can tackle this issue is to analyze past trends of the real estate market in Singapore. Seeing that overall flat sizes over the years are decreasing, this might have contributed to smaller family households arising. Have a look at the line charts below to look at how this trend is being affected.

Singapore’s Growing Population and The Decreasing Household Size

Have a look at what the current market offers, this quick search on will consistently change in terms of results, but the general explanations of what I am going to mention will remain.

There is currently no statistic which reflects accurately on how long on average a listing will be on the market, but taking, for example, jumbo flats, which will be for HDB flats with sizes 1,400 sqft and above, at the point of when this article was written, 56 listings, where the longest it will be on the market for a month! Considering that most exclusive rights given to real estate agents to market an HDB unit will be for 3 months, this shows that jumbo units are highly desirable!

Number of Resident Households Over Time

From what we can infer from the chart above, there is a good number of households made available across all property types. As of estimated by end 2020, Singapore’s total population is around 5,850,342. With total residential households amounting to 1,372,400 end 2019, the average household size is approximately 4.11 persons. Considering that there is an average increase of 220,000 households every 10 years, Singapore’s population will approximately reach 6,754,542 by 2030. This estimate is close to the predicted amount of 6.9 million as mentioned in the population white paper.

Average Household Size Among Resident Households Over Time

Demand for Bigger Households for HDBs

By simply inferring from the data above, this means that there is a reduced need for bigger households since it is decreasing year-on-year, right?

Taking one step further, we can cross-examine on this point based on transaction volume of bigger flats versus smaller ones.

From the statistics shown below, this will show that this is untrue, in a comparison between;

· 3-Rooms

· 4-Rooms

· 5-Rooms, Multi-Generation and Executive

Grouping the last category is required as these flat types are generally low in supply and therefore will form a crucial grouping on its own.

HDB Sales Transaction

Surprisingly, HDB 3-Room flats form the lowest in transactional volume, with HDB 4-Room and 5-Room, Exec, Multi-Gen leading the way! I will be giving my reasons as to why this is so in the “Reasons to Why Bigger Flat Sizes are Preferred” Paragraph.

Demand for Bigger Households for Condos

For Condos, my comparisons will be between 2 Bedroom and 3 Bedroom Condos, this is because, for the 1 Bedrooms, these are usually bought by investors who will be more interested in flipping. This causes most of the data to be skewed towards 1 Bedroom as there will be a drastically higher number of transactions and there will not be a fair comparison.

4- and 5-Bedroom condos are not added as the price increase will be too steep in comparison to the 3-Bedroom condos. This will not make logical sense for most upgraders from HDBs as the loan quantum from the banks will be too high if they do not have enough cash and most will be moving into over-leveraging territory, which is what most households should not do. In addition, it makes a presentation of the data more clearer to understand.

Condominiums in Singapore Sales Transaction Trend

Similar to the line chart on HDB transactions, condominiums with 3 Bedrooms have a higher transactional volume as compared to 2 Bedrooms. This shows that there is a higher demand for bigger properties.

Reasons to Why Bigger Flat Sizes are Preferred

Bigger Homes for New Families

Most young couples might not be financially capable to own a huge home right after marriage and might opt for smaller properties initially. As their families grow, they will eventually have to buy a bigger property.

However, we should also address that when the children of families do grow up, there is often no further requirement for these empty spaces.

For most homeowners of HDB and private properties in such scenarios, most will collect rental income as a means to have a stable cash flow, instead of “right-sizing”. Furthermore, some homeowners would opt for the Lease Buyback Scheme (LBS) for HDB properties. This refers to selling back a portion of your lease back to the state while you continue to live on the premises.

This goes to show that buying a larger property will consistently provide you with benefits at any point in your life.

Stability During Financial Crises

Private Non-Landed Regions (Avg PSF) During Global Financial Crisis

This relates to one of my previous articles, where properties in the Outside Core Region generally have more stability in terms of their prices. Coincidentally, the majority of properties in that area consists of large-sized apartments meant for families. The reason why there is such a huge drop in terms of PSF for properties in the Core Central Region is due to its large number of studio/1-Bedroom apartments, which are often bought by investors. During a financial downturn, rental prices will become extremely competitive which results in a loss of capital value for these small, investment properties.

Equivalent Rental Volume

Singapore Rental Transaction Trend for HDB in 2020
Singapore Rental Transaction Trend for Condos in 2020

From the statistics shown in regards to HDB and condo rental transactions, the volume is comparable. This shows that the demand for bigger homes is comparable and consistent with smaller properties!

Bigger Homes Make Happier Families

The psychological impact of staying in a smaller home is understated, but I believe it requires a point on its own. The Covid-19 situation has shown to a certain degree that people are affected if they are made to stay within their homes in an extended period of time. This open-access research paper shows this to be true. The following statement is a short summary.

“Despite having a similar effect on the housing satisfaction of both genders, an increase in living space has only a (weak) positive linear effect on the life satisfaction and mental health of men”

Although the benefits are minor, it is good to take note of such a point.


I hope that this article has shown that there is a constant demand in regards to larger properties, despite the decrease in family household size in Singapore, there is an invisible demand for larger properties which might not be apparent at first glance. These bigger properties make for a much stable investment and provide for a psychological benefit to its occupants.


The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.

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