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  • Writer's pictureDelvin Goh

Understanding Singapore's Gross Floor Area (GFA) Harmonization: Impact on Property Prices and Designs

The Urban Redevelopment Authority (URA) of Singapore announced in September 2022 that they would harmonize the definition of Gross Floor Area (GFA) across multiple government agencies. This pivotal ruling, set to take effect from new developments as of 1 June 2023, brings alignment across several agencies - URA, SLA, BCA, and SCDF, significantly impacting the landscape of property development in Singapore.



While there are several crucial changes, two key aspects - b and c - stand out, as it has a profound influence on the future of property development and pricing strategies for developers.


Void Spaces And Strata Area Inclusions


The ruling mandates the inclusion of all strata areas within the GFA calculation while explicitly excluding voids from the strata area. This shift in calculation has multifaceted implications, reshaping both the architecture and pricing dynamics of future developments.


Impact On Property Designs


Developers, under the new regulation, will find diminished incentives to construct larger air-conditioner (a/c) ledges and high ceilings. These areas would now count towards the GFA, altering the cost-efficiency dynamics of designs. As a direct consequence, future layouts are expected to prioritize efficiency, optimizing liveable spaces and maximizing the value of each square foot. However, this shift might also result in a reduction in high-ceiling units, resulting in buyers looking for penthouse units to look at resale properties.


Increase In PSF Prices


The changes in GFA calculations could also impact per-square-foot (PSF) prices in new developments.


Consider a penthouse 1 + study unit, initially listed at 657 sqft for approximately $1.88 million, equating to $2,861 PSF.


However, after June 1, 2023, the void area and air-conditioner ledge will be excluded from the calculation. Consequently, the adjusted unit size becomes 508 sqft, leading to a recalculated PSF price of $3,700.


This regulatory change is poised to steer the market towards more efficiently designed units, emphasizing functional living spaces. However, the flip side emerges in the form of escalating PSF prices.


Conclusion


The GFA harmonization by Singapore’s Urban Redevelopment Authority represents a pivotal shift in the city-state's property development landscape. While it encourages efficiency in design and optimizes liveable spaces, the regulation concurrently propels an increase in per-square-foot prices.


The days of leveraging void spaces or oversized air-con ledges to lower PSF prices are coming to an end, signifying a new era where each square foot holds more value but comes at a higher price tag.

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