Condo Mistake: Why Small S'pore Units Are Harder to Sell

While the overall private residential property price index continues its ascent, climbing 1.0% in the second quarter of 2025, a closer look reveals a significant performance gap based on unit size. Between 2019 and 2024, studio and one-bedroom condos saw an average annual price increase of just 3%. In stark contrast, two- to five-bedroom units enjoyed much healthier growth, ranging from 5% to 8% annually. This disparity directly impacts an owner's return on investment, making the dream of a quick, profitable sale an elusive reality for many.

The fundamental reason for this gap lies in the target demographic. Smaller units cater to a very specific and narrow segment of the market—predominantly singles or young couples without children. As these individuals' lives evolve and their spatial needs grow, the compact layouts of studio and one-bedroom apartments quickly become restrictive. This limitation curtails the pool of potential resale buyers, as many are willing to stretch their budgets for a two-bedroom unit that offers greater long-term flexibility and space.

This dynamic creates a resale market where the demand is simply not as robust. While the lower initial cost keeps these units attractive to first-time buyers and some investors, the exit strategy is complicated by a limited number of subsequent buyers who fit the same narrow profile.

This shift drastically alters the value proposition, especially for investor-buyers who dominate the small-unit segment. An investor's primary concern is often rental yield and eventual capital gain, and new developments with more rooms, modern facilities, and a fresh lease are often a more attractive proposition. The result is a crowded resale market where older, less efficient one-bedroom units struggle to stand out and command a premium.

The sheer volume of small units listed for resale underscores this challenge. As of early September 2025, thousands of one-bedroom condos built between 2010 and 2025 were listed for sale on major property portals. This significant supply reflects not just healthy investor activity over the past decade, but also the current difficulties many owners face in offloading their properties in a competitive landscape.

This creates a broken link in the investment chain. The initial buyer, looking for an exit, finds that the very demographic they belonged to is now focused on the next new project launch, not the resale market. Consequently, sellers are forced to pivot their strategy and compete for the limited pool of owner-occupiers, primarily singles. This places their compact, aging unit in direct competition with slightly larger, more practical two-bedroom apartments, often forcing them to temper price expectations just to close a deal.

Furthermore, investors often focus on the gross rental yield while underestimating the numerous costs that erode the final net profit. Monthly maintenance fees, which do not scale down linearly with unit size, can take a proportionally larger bite out of the rental income from a small apartment. Coupled with property taxes, mortgage interest, and occasional agent fees for tenant sourcing, the actual cash flow can be disappointingly slim, sometimes failing to cover the monthly expenses and forcing owners to top up cash, turning the investment into a liability.

For prospective buyers, the focus must shift from merely the entry price to a more holistic consideration of the exit strategy. The data strongly suggests that while the upfront cost is higher, larger units offer a more reliable trajectory for capital appreciation and a broader, more liquid resale market. The willingness of buyers to pay a premium for space and flexibility is a trend that has solidified in the post-pandemic era.

​Looking ahead, while declining household sizes may provide a steady baseline demand for smaller units, the significant supply and intense competition from newer, more efficient layouts will likely continue to suppress their price growth relative to larger apartments. Aspiring homeowners and investors must therefore weigh the immediate affordability of a one-bedroom condo against the long-term financial reality: a potentially longer holding period, lower profitability, and a decidedly more challenging sales process.