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

Living Large in Tiny Shoeboxes

Now that I have moved into yet another spanking new shoebox apartment, decorating and fixing stuff up from scratch, let me share some tips on living up the space to the fullest. 1. Go multi-purpose, multi-function Where space comes at a premium, every inch counts. You want to buy stuff that can perform dual, triple or more roles. Ikea has a lot of ready to use examples. Daybed - sofa, bed, storage rolled into one. Side table with storage.  Removable cover is also a serving tray. Pot holder, doubles up as table cloth. Chopping board, doubles up as placemats. Multi-cooker, steam, boil, cook rice at one go. Available in qoo10. Multi-function scissor - knife, scissors, can opener 2. Make use of vertical space Hangs over doors Fix a drop leaf table to the wall. Mount two heavy duty hooks onto the wall on either side of the table to hang up both folding chairs when not in use. 3. Foldable, stackable, nestable pieces save

Studio apartment investor goes all-in

2013 feb 18 Studio apartment investor goes all-in No diversification needed when one is young, property investor tells CAI HAOXIANG Most investors live by the virtues of diversification - that is, not putting all your eggs in one basket. Not Ryan Khoo Chung Ming. The 30-year-old bought his first apartment in his native Malaysia in 2007 when looking for a place to stay. Then, the market was not as buoyant. He spotted an opportunity for studio apartments and bought more and more, maxing out his borrowing limits. He even moved to Singapore in 2009 to get a higher-paying job so he could borrow even more. Today, he owns 13 apartments in Kuala Lumpur, a studio apartment in the United States, a studio apartment in Singapore, and has also invested in an office unit in Johor Baru and a hotel floor in KL. The total value of his portfolio has gone up and is now worth RM10 million (S$4 million). Half of the portfolio is yield-generating, with the remainder under construction. Like many who