If you are thinking of investing in small apartments measuring less than 500 sq ft because they are cheaper, you may want to think again, according to property experts.
As there are only a few “shoe box” housing units available on the market, and with a popularity that’s still in the early stages, analysts said the returns on investment in these properties could be limited.
“This is a non-standard investment which, in terms of size, may not appeal to some tenants,” said Cushman and Wakefield Singapore managing director Donald Han.
“If you’re thinking of leasing out and holding this as an asset typical to any studio-sized residential apartment, then this is something very different.”
Such “shoe box” apartments have been popular with property buyers recently, as sales of such units this year have hit an all-time high of 412, up from 299 last year and 275 in 2007. In 1995, there was only one such transaction.
The investment returns for such small-sized apartments depend on tenants’ preference for these types of units. And analysts said that in times of a market downturn, potential tenants tend to hold the bargaining power. Continue reading
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