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'Shoebox' apartments might drop under URA

http://www.propertyguru.com.sg/property-management-news/2009/10/26430/-shoebox-apartments-might-drop-under-ura

In Singapore, the newest type of ‘shoebox’ flats may have captivated the property enthusiasts’ thoughts; however they are not anticipated to intrude the housing landscape. Some of them may not even have the approval of the planning authority, if latest conclusions are anything to go by. Recently, Singapore's smallest apartment unit, at 258 sq ft, was placed on the market at the Suites@Guillemard project. Since then, the Urban Redevelopment Authority (URA) has rejected some applications regarding flats, which are below 300 sq ft or 28 sq m. Aside from the size, another factor may also have been the layout of the proposed micro units. For example, if a flat does not effectively render for a kitchen, it may appear like a hotel room instead a residential development. URA claimed that it does not specify that a housing development should cover a certain mix of unit sizes or that private housing units should be of a minimum size. It said however: “We have observed that some developers have been building smaller apartment units”. 'URA will continue to monitor private housing development trends and ensure that our planning guidelines stay relevant in providing a quality living environment for our residents”.

Just this year, the property market has depicted an increase in shoebox units’ transactions, mostly determined as below 500 square feet. Property developers have noticed that smaller flats are much easy to sell as their lump sum unit price is reasonable to a larger group of property buyers. This made it easier to property plungers to enter into the bandwagon. Therefore, the fear is that shoebox apartment units stimulate property speculations. Some property experts also said that buyers who buy such smallish units off-plan should realise what they are in for. According to the chairman and CEO of Ho Bee Investment, Thian Poh, “When you buy a 200-300 sq ft unit off-plan, you may not realise how small it is. But when you see the finished product, you'll know how cramped it is. It's not very liveable. I would rather stay in Housing Board flats. The size is much bigger, and the price quantum is not too far off”.

Shoebox unit owners may deal their properties to those individuals who favour short-term usage, including those in “hourly-rate businesses”, if usual tenants like Singaporean yuppies, expatriates and foreign students don’t want to dwell in such small units, an analyst said. If the trend of “mickey mouse” flats picks up, there could be a possible supply-demand mismatch, according to the DTZ executive director Ong Choon Fah. “We could have a situation where there are a lot of apartments but not the type that people would want to live in”, he said. Others indicate that it’s too early to reject renting interest for units from single expatriates on low housing budgets. However, Ong Chong Hua, the executive director of Ho Bee Investment, said: “Those who do shoebox apartments will tell you there's a rental market for such units. But if I'm a single expat, assuming I want to live in this kind of shoebox apartment development, then I must also consider the profile of the people who'll be my neighbours. I think it is only natural to assume they'll not be the normal neighbours you would expect in a typical housing development”.

Since February, other small units have also appeared aside from the shoebox units. These include three-bedders from around 900 square feet and two-bedders from about 750 square feet.

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