Why we stopped pricing by the square metre
A 30 sqm room in Jurong East lists at S$1,000. A 9 sqm room in Serangoon lists at S$1,500. Both prices are right, and the reason they are right is the whole argument for pricing the bundle instead of the floor.
Two rooms from our own list.
IH-STD1 at Ivory Heights is 30 sqm and lists at S$1,000 a month. CP-PR1 at Chiltern Park is 9 sqm and lists at S$1,500 a month. The Jurong East room is more than three times the floor area and it is five hundred dollars a month cheaper.
If you price by the square metre, one of those two numbers is a mistake. Neither of them is.
What people are actually buying
Nobody has ever asked me for square metres. They ask how long it takes to walk to the MRT, whether the room fits a queen bed, whether they share a bathroom, whether the bills are included, whether they can move in on the fifteenth, and what the other people in the flat are like.
That is the product. The floor area is one line in it, and not the line that decides anything. Chiltern Park is about ten minutes on foot to Serangoon, which sits on both the North East line and the Circle line. Ivory Heights is about twelve minutes to Jurong East. Both are perfectly good. They are not the same commute, and the market prices them differently, and it is not our job to argue with that.
What changed when we stopped
When we priced by size we kept doing two things wrong.
We underpriced small rooms in strong locations, because the spreadsheet said a 9 sqm room could not possibly be worth S$1,500. It let in a day. That is not a price, that is a discount we were handing out for no reason.
We overpriced large rooms in quieter buildings, because the same spreadsheet said 30 sqm had to command a premium. Those rooms sat. A room that sits for six weeks at S$1,150 earns less over the year than a room let immediately at S$1,000, and it costs you the viewings, the messages and the mood on top.
How we price now
We start from the bundle and work back. Walk time to the MRT and which lines it is on. Bathroom shared or ensuite, and shared with how many. Bed size, and whether the room is approved for one person or two, which on our list is only five rooms out of nineteen. What is included, which for us is bills, WiFi and the weekly clean of the common areas. And then, last, the size.
Then we look at how fast comparable rooms are letting and we move the number. Not by a lot and not often, but the price is a live number, not a plaque.
The one number we never move
The three month minimum. Every room on our list carries it, and it is not a pricing lever, so there is no version of this where someone talks us into six weeks at a higher rate. That has its own reasons and its own piece.
The rest of it is negotiable in the sense that any price is negotiable. What is not negotiable is the pretence that the room is worth a certain amount because of its floor area. The floor area is the one thing about a room that cannot move, which is exactly why it is the wrong thing to build a price on.
