Is Your Property Losing Value? The Hidden Truth About Outdated Layouts in Today’s Market!

During a recent property consultation, a key discussion revolved around whether your property still holds its value in today’s market. Why is this relevant? If you’re house hunting, you’ve likely noticed units with oversized bay windows, expansive balconies, or massive roof terraces. These inefficient layouts were common in the past because developers had little incentive to avoid them.

Here’s why: Gross Floor Area (GFA) refers to the total space developers can build and sell. The larger the GFA, the more units they can offer. Previously, bay windows weren’t counted in the GFA, meaning developers could charge buyers for this space without incurring costs from the Urban Redevelopment Authority (URA). This allowed them to boost profits by increasing saleable but less usable space. In 2009, the URA cracked down on this practice, making bay windows largely obsolete in modern developments.

Source: Urban Redevelopment Authority of Singapore

Developers, however, adapted by exploiting other loopholes, such as private enclosed spaces (PES), roof terraces, and balconies, which also didn’t count toward GFA. The URA responded by including balconies and PES in the GFA calculation, though they permitted up to 10% of internal space to be used for balconies to balance usability for buyers.

Post-2013, developers shifted to building shoebox units—compact homes as small as 323 square feet, including household shelters and air-con ledges. Concerned about Singapore mirroring Hong Kong’s cramped housing model, the URA intervened again, mandating an average unit size of 85 square meters, and 100 square meters in nine specific areas. As a result, shoebox units are now rare, with some projects skipping one-bedroom units entirely in favor of two-bedroom layouts.

By the pre-COVID era, many new launches featured units with two balconies—one in the living area and one in the master bedroom—along with two air-con ledges, taking advantage of the 10% bonus GFA for balconies. In 2019, the URA tightened regulations again, reducing the bonus GFA cap for balconies to 7% and limiting total balcony space to 15% of internal area.

The game-changer came in 2023 with the URA’s harmonization rules. Air-con ledges are no longer part of the sellable area, a significant shift. Previously, developers built oversized ledges to inflate saleable space and profits, even though homeowners couldn’t use it effectively. I recently shared with a client how some used these oversized ledges for alfresco dining! Now, buyers only pay for truly usable space. So, when you see a smaller floor area in a new launch, don’t be alarmed—these layouts are far more efficient, ensuring you pay for what you can actually use.

This brings us back to the resale market. Today’s buyers are savvier and less willing to pay for non-functional spaces like bay windows, planter boxes, or oversized air-con ledges. So, is your current property’s layout still competitive? Drop me a message, and let’s take a closer look!