More Housing Board (HDB) flat dwellers buying private homes are opting for shoebox units, likely as investments, according to a report by consultancy DTZ on Wednesday.
A record 13.3 per cent of all private home purchases by people with HDB addresses last year were for shoebox units, which are homes of 500 sq ft or less.
These transactions were mainly at projects such as Bartley Ridge at Mount Vernon Road, J Gateway in Jurong East and D'Nest in Pasir Ris, the consultancy said.
"Given that most HDB flats are larger than 500 sq ft, these shoebox purchases by HDB addressees are not likely to have been purchased by HDB upgraders looking at owner-occupation and are more likely for investment," DTZ said.
But it noted that sales of shoebox homes fell last year amid weakness in the broader housing market. Just 2,057 shoebox units were sold last year from 3,000 units the year before, the first annual decline since 2009.
DTZ also noted that overall private home sales tumbled 40 per cent last year, dragged down by secondary transactions, which plunged to their lowest in 10 years.
Secondary sales - units sold by individual home owners rather than property developers - sank 50.5 per cent last year from the year before. Only 7,755 secondary units were sold, the least since 2004, DTZ said.
Although both local and foreign buyers trimmed their purchases of private homes last year, foreigners cut back by less.
The share of private homes bought by foreigners inched up from 6 per cent in 2012 to 9 per cent last year, observed DTZ. But it added this is still far below the 18 per cent share of foreign buying in 2011, before curbs were introduced on foreign buyers.
Buyers from mainland China were the most prolific foreign buyers in Singapore's private home market last year, regaining the top spot from Malaysians the year before.
This year is expected to continue to be a buyers' market with buyer demand "becoming increasingly project-specific and price-resistant" and sales volumes remaining weak, DTZ said.