Every time I talk about new launches, I get this comment:
“New houses nowadays are so small and so expensive.”
And honestly — I understand why people feel that way.
If you compare newer homes to older flats or condos built 15–30 years ago, the difference is obvious. Units are smaller. Prices look higher. PSF numbers feel shocking.
But the key question isn’t whether this is happening. It’s why.
Land prices have quietly reset the baseline
Over the past year, Government Land Sales (GLS) results have revealed something important: land prices have moved up across the board — even outside the Core Central Region.
Recent residential sites in the Rest of Central Region were awarded at around $1,150 to $1,300+ psf per plot ratio.
What’s more interesting is what’s happening in the Outside Central Region.
Several OCR sites — traditionally considered “mass market” — are now seeing land bids in the $1,300+ psf ppr range, numbers that would have been associated with RCR projects in the past.
This isn’t a one-off. It’s a pattern.
Developers are competing aggressively for limited land supply, and that competition is pushing up bid prices regardless of location.
Why this matters to buyers
Land is the single biggest cost component in any new development.
When a developer acquires land at:
- 1,200–$1,300+ psf ppr
- before construction, financing, and regulatory costs
There are only two ways to make the numbers work:
- Higher selling prices
- More efficient (read: smaller) unit layouts
That’s why buyers today feel squeezed on both fronts — size and price.
It’s not that homes are randomly overpriced. It’s that the cost base has shifted.
The comparison that keeps misleading buyers
One of the most common comparisons I hear is:
“My parents bought a much bigger home for much less.”
But that comparison ignores context.
You’re comparing:
❌ Land prices from a very different cycle
❌ Construction and labour costs from decades ago
❌ A completely different supply-demand environment
It’s like comparing coffee prices from 10–15 years ago to today. Same category, totally different cost structure.
What buyers should be asking instead
Rather than asking: “Why are new houses so small and expensive?”
A better question is: “What is this property meant to do for me?”
- Long-term own stay?
- Rental income?
- Capital growth and exit in 5–10 years?
Different goals justify different trade-offs.
A smaller unit may feel emotionally uncomfortable, but financially, it might still be the right tool — if it aligns with your strategy.
Kopi for thought
New launches today are not necessarily a reflection of greed. They can be a reflection of higher land costs, stronger competition, and a new pricing baseline.
If OCR land is already transacting at levels once reserved for RCR, then our expectations — not just prices — need to adjust.
Curious to hear your take! Do you think buyers are underestimating how much land prices have changed? Or do you feel new launches are still too expensive despite these realities?
Let’s discuss –
Rachel, 92336690
