The authorities could intervene if there is excessive supply
The Government is monitoring the sales of so-called “shoebox” apartments and may step in if there is excessive build-up of such units, National Development Minister Khaw Boon Wan said yesterday.
Speaking at a dialogue organised by government feedback agency REACH, Mr Khaw also allayed concerns about rising prices of public flats – there is “political will” to build at least 100,000 HDB flats if necessary during the Government’s current term, he said.
Last week, latest statistics from the Urban Redevelopment Authority showed that “shoebox” apartments – or units smaller than 50 sq m – made up 27 per cent of sales in the first quarter, a new high since such units were made available in the market three years ago, according to analysts.
Responding to a participant who was concerned with what he felt was the shrinking size of HDB flats – this could risk eroding family bonding, the participant said – Mr Khaw replied that, in this regard, his concern was with the private housing market.
Mr Khaw said he has been watching the sales of “shoebox” units by private developers in the past few months. Said Mr Khaw: “If the percentage becomes too (high) we may have to step in and say, ‘Hey, are you sure there will be demand for it?'”
Based on the profiles of buyers of “shoebox” units, Mr Khaw said he suspects that among them are Singaporeans who see them as a good investment.
For these investors, Mr Khaw said he hoped they made the “right decision”. Rental yields would be less than expected if there are too many of such units, he pointed out.
Nevertheless, he cited his recent visit to two residents in “shoebox” apartments – both of whom were single and have a pet – and noted that there are people who would be “comfortable” living in such units.
‘HDB flats not shrinking‘
On public flats, Mr Khaw said that, based on his checks, HDB housing norms have not changed for the past 15 years. “There’s been this misunderstanding that HDB has somehow in recent years shrunk the units but we have not. If you visit our new three-room, four-room and five-room (flats), they are very comfortable.”
Mr Khaw said that what the HDB has done, instead, was to start building two-bedroom units – after recognising that some of the lower income may find three-room flats unaffordable. Nevertheless, such two-room units make up a “very small fraction” of the total units on offer in each Build-to-Order project, he said.
He reiterated: “We continue to build smaller units and large units and it’s the choice of consumers.”
Mr Khaw also addressed concerns on rising HDB prices, with one participant suggesting that Singaporeans may have to “pay S$1.5 million for a HDB (flat) in 20 years”.
In response, Mr Khaw pointed out that there is a strong co-relation between economic growth, wages and property prices.
In the short term, property prices are rising as the infrastructure cannot catch up with the rapidly growing population, said Mr Khaw. Nevertheless, the property market has seen some stabilisation, following government measures in the past year, he added.
And as Singapore’s economy reaches maturity, economic growth and wages will also moderate – the latter could “even stagnate”, Mr Khaw noted. This would correspondingly have an effect on property prices here.
He reiterated that the trend of rising property prices will not continue once the Government corrects the imbalance, “which will take time”.
Source: Today
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