Skip to main content

Shoebox investment apartments at risk of hard landing: analyst

2012 may 15
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1201204/1/.html

Shoebox investment apartments at risk of hard landing: analyst
By Lynda Hong/Janice Wu | Posted: 14 May 2012 2128 hrs

SINGAPORE: The number of small apartments, or shoebox units, in Singapore will nearly quadruple from 2,500 currently to 9,700 by 2015, the government said.

Currently, about 8 out of 10 shoebox apartments are located in the city, appealing to singles and expats with lower transportation costs and travelling time to their workplace.

But analysts question the appeal of shoebox units in the heartlands, where HDB flats are in abundance, providing more space for less rental.

Cheaper mortgage rates and plenty of liquidity were pushing investors to property, but speculation may be waning.

Since December's cooling measures, transactions of uncompleted units in the resale market dropped to four per cent, while the number of private residential properties bought by foreigners and companies dropped to seven per cent.

Land supply for residential needs has also increased.

"The market is a lot cooler than it was, say, one year ago," Minister for National Development Khaw Boon Wan said.

"(But) there are pockets of hot activities, particularly in the mass market, with the emergence of these shoebox units."

Shoebox units made up 27 per cent of new home sales in the first quarter.

But unlike the soft landing of most property segments, analysts warn rentals and resale values of shoebox apartments could drop drastically.

"Shoebox (units) would be the first to suffer," research head of Chesterton Suntec Colin Tan said.

"We may get (a situation) in the future where there will be falling prices for small apartments, and then rising prices for normal-sized apartments because they simply do not meet the requirements of the family."

- CNA/wm

Comments

Popular posts from this blog

BBFA Singles Property DIY B.A.N.T.E.R Guide

BBFA Singles Property DIY B.A.N.T.E.R Guide   The BBFA (Bold Beautiful Forever Awesome) singles property DIY B.A.N.T.E.R guide is written for us fabulous ones who prefer a hands-on approach to a sustainable life. In our world today, resources are depleting and wastage is sinful. In creating this guide, our principle is simple:   - If I can do it, don't get someone else to do it. - If someone has already done a decent job, don't waste or duplicate the effort. - If there is no real value creation, don't do it. Disclaimers: *All facts and figures are accurate as at time of writing (19 September 2024). *All screenshot graphics and tables are copyright of their original authors.   1. B UDGET Before all else, check your finances and derive a budget for your property. Ballpark is fine provided you have buffer savings or accounts in Bank Of Ahpa-ahma. Downpayment 25% (HDB flat taking HDB loan) can use CPF 25% (HDB flat/private property on bank loan) of which 5...