The Surprising Benefits of Buying a Smaller Home in a Prime Location

Downsizing isn’t just for retirees. See why smaller units in prime districts can offer lifestyle perks, stronger resale demand, and better investment returns than larger homes in less central areas.

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Jul 4, 2025 - 10:09

The Surprising Benefits of Buying a Smaller Home in a Prime Location

When shopping for property, many buyers face a classic dilemma: should you choose a larger home in the suburbs or a smaller unit in a prime location? While the idea of more space is tempting, there’s a growing trend of savvy homeowners and investors opting for compact homes in sought-after districts—and for good reason.

Here’s why buying a smaller home in a prime location might be a smarter move than you think.

1. Prime Locations Hold Their Value Better

In real estate, location is everything. Homes in prime districts tend to retain their value and even appreciate faster than those in outlying areas. This is especially true in land-scarce Singapore, where districts like Orchard, Marina Bay, and River Valley remain perennial favourites.

A smaller unit in a high-demand area may deliver stronger capital gains over time than a larger property in a less central location. When it comes time to sell, you’re likely to find a larger pool of buyers and investors drawn to your property’s coveted address.

2. Better Rental Demand and Yields

If you’re buying as an investment, smaller units in prime areas often enjoy strong rental demand from expatriates and young professionals. Tenants prioritise convenience, lifestyle, and proximity to work over sheer floor space.

One-bedroom and studio units in prime locations can achieve higher rental yields on a per-square-foot basis compared to larger suburban homes. They’re also easier to lease out quickly, minimising vacancy periods.

3. Access to Lifestyle and Amenities

Living in a prime location means being surrounded by top-tier amenities—shopping malls, restaurants, entertainment, and cultural hubs—all within walking distance. Public transport is often more accessible too, with multiple MRT lines and bus routes nearby.

For families, these areas often come with added benefits like proximity to reputable schools and healthcare facilities. The lifestyle conveniences can significantly enhance daily living, even if your home is smaller.

4. Lower Maintenance and Utility Costs

Smaller homes are easier and cheaper to maintain. With less space to clean, furnish, and repair, you can spend more time enjoying the neighbourhood and less time worrying about upkeep.

Utility bills are also typically lower in compact units, making them more cost-efficient in the long run. This can free up cash flow for other priorities—like travel, investments, or renovations.

5. Sustainable Living and Minimalism

A smaller home encourages a more minimalist lifestyle. With limited space, you’re less likely to accumulate clutter and more likely to focus on quality over quantity in your possessions.

This trend aligns with the growing movement towards sustainable living, where buyers prioritise location, accessibility, and environmental impact over sprawling square footage.

6. Easier Resale in the Future

Smaller units in prime areas often appeal to a wider buyer pool, including first-time buyers, investors, and retirees downsizing from larger homes. This broad demand can make resale quicker and less stressful, even during market fluctuations.

Final Thoughts

Bigger isn’t always better—especially when it comes to property. A smaller home in a prime location can offer stronger investment potential, better lifestyle perks, and greater financial flexibility than a larger property in the suburbs.

For buyers who value convenience, connectivity, and long-term gains, going compact in the right location could be the smartest property decision you’ll ever make.