Tag Archives: shoebox apartment

Shoebox mania subsides, demand up for bigger units

Posted on 2 Jul 2012 | Comments Off on Shoebox mania subsides, demand up for bigger units

With initial signs that the shoebox craze may be subsiding, demand for larger non-landed homes appears to be on the upswing with upgraders leading the way.

Data from property consultancy CBRE shows that the median size of all new non-landed homes sold in Q2 2012 rose to 79 sq m, up from 65 sq m in the previous quarter.

At the same time, the market share of shoebox units measuring 50 sq m or less fell to 23 percent from a high of 28 percent. However, this figure is still more than last year’s 20 percent.

Experts noted that cooling measures such as the seller’s stamp duty (SSD) and additional buyer’s stamp duty (ABSD) could have contributed to the decline in investor demand for shoebox units. Such properties have been very popular due to their affordability, with most units priced below S$1 million.

Despite the renewed interest for bigger units at some executive condominiums (ECs) and private suburban projects, Joseph Tan, Executive Director (Residential) at CBRE, explained that “interest in small units will always be there, especially if the current trend of reducing average family size persists and homeowners continue to look for affordable smaller apartments”.

“It also depends on developers’ supply and pricing strategy; if prices are kept at an affordable quantum, investors will continue to view this as an attractive form of investment in view of the prevailing financial crisis,” he added.

Source : PropertyGuru – 2012 Jul 2

Advertisement

Comments Off on Shoebox mania subsides, demand up for bigger units

Posted in Property Market / Real Estate

Tagged , , , , , , ,

Shoebox units may grow 70 percent over next three years

Posted on 28 Jun 2012 | Comments Off on Shoebox units may grow 70 percent over next three years

From around 2,500 units, the number of completed shoebox homes could grow to 9,700 by 2015, according to Khaw Boon Wan, Minister for National Development.

He added that 80 percent of shoebox units are located in the central region.

In addition, OCBC Research noted that the number of shoebox units in the OCR (Outside Central Region) could grow more than 450 percent by 2015.

But with the limited supply of completed units, the rental market in the OCR remains untested. One major risk is that buyers of uncompleted units in the primary market are basing their decisions on current rental levels, which could be skewed upwards by a small completed supply.

“If rental levels fall due as supply spikes dramatically after 2015, then capital values are likely to face corresponding downward pressure. This is particularly so if interest rates start to increase as well, reversing the virtuous cycle of liquidity fuelled demand,” OCBC said.

It added that the number of households in Singapore that can afford a S$1 million condo have increased by 86 percent. This is due to the fact that the income hurdle in buying such property fell by 18 percent.

“From 2008, we saw interest rates decline from ~2.5 percent to their current levels around 0.4 percent,” it noted.

Using a S$1.0 million condo as a benchmark, OCBC noted that monthly mortgage payments dropped by about 18 percent in Q1 2012 from S$3,400 to S$2,600.

“Assuming mortgage payments constitute at most 30 percent of household (HH) income, the income hurdle for a S$1.0 million property fell 18 percent from S$10,600 to S$8,700 per month.”

Source : PropertyGuru – 2012 Jun 27

Comments Off on Shoebox units may grow 70 percent over next three years

Posted in Property Market / Real Estate

Tagged , , , , ,