Two-bedder private homes are back in fashion as investor demand for one-bedroom units declines on the back of property cooling measures.
One-bedders have always been regarded as a better bet in the rental market but buyers are turning cautious and want bigger flats in case they need to live in them.
Their relatively lower price also makes them more attractive, given new curbs on borrowing.
Developers have responded to the change, with two-bedders making up a higher proportion of recently launched projects, according to data compiled by real estate consultancy OrangeTee for The Straits Times.
OrangeTee looked at the unit mix and take-up rate within the first two months of launch, for sizeable projects launched in March and April. These were Bartley Ridge (which has 868 units), D'Nest (912), Urban Vista (582), Sennett Residence (332), The Trilinq (755) and Novena Regency (55).
All the projects were launched in March except Novena Regency, which went on the market in April. There was insufficient data for projects launched in May and June.
Two-bedders outnumbered one-bedders in all the projects, comprising up to 43 per cent of the total number of units in each development.
Boutique developer EL Development managing director Lim Yew Soon said the unit mix depends on the location. "For suburban projects, there are more two- and three-bedders, some with more four- or five-bedders. Developers have reduced the number of one-bedroom units," he noted.
But in prime locations or areas where launch prices are expected to be $1,500 per sq ft (psf) or more on average, "we'll still have a fair bit of one-bedders because of the affordability", Mr Lim added.
The take-up rate for two-bedders within the first two months of launch was also higher than that for one-bedroom units at Urban Vista, D'Nest, The Trilinq and Novena Regency.
OrangeTee research head Christine Li said more people have been buying private homes for owner- occupation rather than for investment in recent months.
This was partly because the additional buyer's stamp duty was raised for an owner's second and subsequent properties in January - part of the seventh round of cooling measures.
Home loan restrictions imposed in late June have made it even harder for property investors to keep leveraging to buy units, as the new rules cap a borrower's total debt repayments relative to gross monthly income.
"On the pricing front, two- bedders typically have slightly lower prices psf and the quantum is still quite affordable. These are the main reasons why they are gaining popularity in today's market," Ms Li said.
She added that two-bedders were viewed as "insurance" against a weak rental market, compared with one-bedders which are more susceptible to rental market downswings.
Some projects launched recently with a large proportion of one- bedders have had lacklustre sales due to a softening rental market.
The 56-unit freehold Cosmo- Loft in Balestier, made up mostly of shoebox units, was launched in April and moved only four units as of June 30, according to Urban Redevelopment Authority data.
The popularity of two-bedders reverses the situation prior to the January measures when "investment demand was very strong and shoebox units even outside the central region were selling like hot cakes", Ms Li said.
In 2011, one out of every seven units sold was a shoebox flat - defined as a home of up to 500 sq ft in size - The Straits Times reported last year. Buyers, who were mostly investors, snapped up a record 2,037 new shoebox units that year, at projects such as Spottiswoode 18 near Outram MRT station, Skysuites@Anson and The Interweave in Kim Keat Road.
That was more than seven times the number of shoebox units sold in 2008 and 20 per cent more than in 2010.
This story was first published in The Straits Times on Aug 3, 2013.To subscribe to The Straits Times, please go to http://www.sphsubscription.com.sg/eshop/