A one-bedroom condominium can look like a straightforward investment. The purchase price is more manageable than that of a larger apartment; there is less space to maintain, and rental income can help offset ownership costs.
But before buying, another question is worth asking: when it is time to sell, who will want to buy the apartment—and at what price?
A tenant and a buyer may assess the same property very differently. An apartment that suits someone renting for two years may not meet the needs of someone committing substantial savings to ownership.
For investors, understanding that difference is central to assessing a one-bedder’s long-term prospects.
The market is changing, but one-bedders are still finding buyers
An October 23 report by The Business Times highlighted concerns about the resale prospects of one-bedroom condominiums, even as rental demand continues to support the segment.
However, the transaction figures suggest a more nuanced picture than a broad loss of interest.
According to PropNex data cited in the report, average annual new-launch transactions for private non-landed homes below 500 sq ft fell from 1,808 in 2010–2015 to 521 in 2021–2025. Over the same periods, average annual resale transactions increased from 108 to 1,023.
These figures use homes below 500 sq ft as a proxy for one-bedroom units. They do not capture every one-bedder, and some properties within that size range may have different configurations.
Nevertheless, they show that smaller apartments continue to change hands. As more units enter the resale market, buyers have a larger pool to choose from.
Declining new-launch sales do not, by themselves, prove that existing one-bedders are becoming harder to sell. Establishing that would require evidence such as longer marketing periods, larger negotiated discounts or weaker transaction activity relative to the available stock.
The more useful question is what makes an individual unit competitive.
A tenant’s decision is different from a buyer’s commitment
A tenant might choose a one-bedroom apartment because it is near work, fits a monthly budget and provides privacy.
Limited storage or a compact kitchen may be acceptable for a short tenancy. If circumstances change, the tenant can move when the lease ends.
An owner faces a different decision. Buying involves acquisition costs, financing commitments and the possibility that the apartment will need to accommodate changing circumstances.
A single buyer may want space for a future partner. A couple may need two workstations. A downsizer may appreciate a smaller home but still want room for familiar furniture, visiting family and everyday belongings.
An investor, meanwhile, will assess the rent against the purchase price and ongoing expenses.
This creates an important distinction: an apartment can suit renting without appealing to a wide range of buyers.
Identify the next buyer before committing
A one-bedder does not need to appeal to everyone. It does need a credible audience at the eventual asking price.
| Potential resale buyer | What could attract them | What could make them hesitate |
|---|---|---|
| Investor | Achievable rent, manageable expenses and a competitive entry price | Weak net yield, repairs or many similar units competing for tenants |
| Single owner-occupier | Convenient location, privacy and practical living space | Poor storage or insufficient room to work from home |
| Couple | A comfortable shared home within budget | Limited flexibility as household needs change |
| Downsizer | Accessibility, nearby amenities and less space to maintain | Cramped rooms or insufficient space for belongings and visitors |
These groups overlap, but they do not necessarily value the same features.
A unit that works for both investors and owner-occupiers has more potential routes to a sale. That does not guarantee a quick transaction, but it can reduce reliance on one buyer profile.
The entry price shapes the investment
The report cited a 2026 median resale price of approximately S$818,000 for private non-landed homes below 500 sq ft, compared with nearly S$1.37 million for new sales.
These are different groups of properties, with differences in location, age, tenure and specification. The gap should not be treated as a direct discount between equivalent apartments.
It does, however, raise a useful question: how much additional rent would a more expensive unit need to justify its purchase price?
Consider the following hypothetical comparison.
| Item | Apartment A | Apartment B |
|---|---|---|
| Purchase price | S$850,000 | S$1,250,000 |
| Assumed monthly rent | S$3,000 | S$3,500 |
| Annual rent at full occupancy | S$36,000 | S$42,000 |
| Gross rental yield on purchase price | 4.24% | 3.36% |
Illustrative figures only. These are not valuations, rental forecasts or a comparison of specific projects.
Apartment B costs S$400,000 more but generates only S$6,000 more in annual gross rent under these assumptions.
It may still offer advantages, such as a newer building, a better location or a more useful layout. Those advantages need to be assessed against the additional capital committed.
For a future investor buying from the owner, the calculation starts again at the resale asking price. If that price rises much faster than achievable rent, the yield becomes less attractive.
Today’s rental income can support ownership, but it does not automatically justify tomorrow’s asking price.
Gross yield is only the starting point
The gross yields above assume a full year of rental income and exclude expenses.
Maintenance contributions, property tax, repairs, insurance, leasing costs and vacancy reduce the amount retained. Financing costs further affect the owner’s cash flow.
For example, one month without a tenant would reduce Apartment A’s annual rent from S$36,000 to S$33,000. Its rental return before other expenses would fall from 4.24% to approximately 3.88% of the purchase price.
Buyers should also distinguish mortgage cash flow from investment profit. Principal repayments reduce outstanding debt, but still require cash each month.
The eventual outcome depends on the combined effect of rental income, expenses, acquisition and disposal costs, financing and the resale price. A positive monthly rent cheque captures only part of that picture.
A practical layout can widen the audience
For a small apartment, layout deserves close attention because there is less spare space to absorb design compromises.
Two units of similar size can offer substantially different living experiences.
A useful assessment begins with furniture placement. Can the living room accommodate a sofa and dining table without obstructing circulation? Is there a realistic place for a desk? Can the bedroom fit a bed and usable wardrobe with comfortable access?
Storage also matters. Luggage, cleaning equipment, laundry and household supplies need somewhere to go. Without a designated place, these compete with living space.
Kitchen ventilation should be examined carefully. An open kitchen without an external window may suit someone who cooks lightly, but regular cooking requires better extraction and a stronger connection to the rest of the apartment.
Similarly, a “study” label is only useful if the space can comfortably accommodate a desk and chair.
A more usable layout may appeal to someone considering the apartment as a home for several years. That gives the seller a stronger proposition than a low purchase quantum alone.
Location should be assessed through everyday use
Proximity to an MRT station is useful, but buyers should examine the actual journey.
A comfortable walk with convenient crossings is different from a route interrupted by major roads or exposed stretches. Access to groceries, meals and other daily needs also affects how well a compact home functions.
For rental demand, consider the employment centres and institutions the apartment can realistically serve. For resale appeal, consider whether the neighbourhood also suits an owner-occupier’s routine.
Competition matters at the development level too. If several similar one-bedders are available at the same time, buyers can closely compare asking prices, condition, views, and existing tenancies.
A desirable location helps, but the apartment still needs a reason to choose it.
Fewer new one-bedders do not guarantee higher resale values
Reduced new supply could benefit some existing units, but scarcity alone is not a complete investment case.
Planning requirements also influence the mix of homes developers build. URA’s guidelines outside the Central Area require a minimum proportion of larger homes and limit the proportion of very small units. Within the Central Area, at least 20% of units must have a net internal area of at least 70 sq m. These requirements mean changes in unit mix cannot be attributed solely to buyer demand.
An existing apartment still needs to compete on price, condition, location and usability.
Limited new supply will not necessarily compensate for an awkward layout, substantial upkeep costs or an asking price that leaves little room for an attractive rental return.
Buy with the eventual sale in mind
One-bedroom condominiums can serve a useful purpose for both homeowners and investors. A manageable purchase price, a convenient location and a practical layout can make a compact apartment appealing.
The investment case becomes weaker when it rests mainly on the assumption that finding a tenant will make the eventual sale straightforward.
Before committing, buyers should be able to explain who might purchase the unit from them, what those buyers would value, and which alternatives they would compare it against.
We believe a stronger one-bedder purchase combines a defensible entry price with a home people can comfortably use. Rental demand supports the holding period; resale appeal determines the options available when it is time to move on.
Disclaimer: This article is intended for general information and discussion only and does not constitute financial, investment, legal or tax advice. Market statistics reflect the periods and sources cited, and homes below 500 sq ft are used as a proxy rather than an exact measure of one-bedroom units. Illustrative prices, rents and yield calculations are hypothetical and exclude certain acquisition, financing and ownership costs; they are not forecasts or guarantees of returns. Rental demand, resale prospects and suitability vary by property and individual circumstances. Readers should independently verify information and seek appropriate professional advice before making a property decision.
Article contributed by Jerry Wong.
Jerry Wong is a realtor at Propnex Realty, bringing a rich background in interior and lighting design to his work. He loves exploring diverse spaces and observing the transformative power of real estate. Beyond his professional role, Jerry finds his greatest fulfillment in connecting people with the right properties, gaining immense satisfaction from helping clients achieve their dreams.
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