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Mickey Mouse Condos Distorting Prices

2010 sep 14

http://www.h88.com.sg/article/Mickey+Mouse+condos+distorting+prices/

Sales for 'Mickey Mouse' or shoebox apartments have skyrocketed, which is a good thing for developers, but analysts are saying that these sub-500sqft studios are keeping prices above $1,000 psf. Just look at the numbers.

The median price quantum of private homes sold by developers has fallen from about $1.4 million in April this year to $1.1 million in July yet the median psf prices have hovered above $1,000 psf for most months this year.

Many such shoebox condo projects, such as Siglap V, Parc Elegance, Suites @ Katong, Parc Somme, Centra Studios, La Brisa and Casa Aerata, have been selling very well since April. Could it be that these small apartments are driving up the median psf of certain districts, creating an illusion of increasing prices?

Here are some shoebox apartment projects and their average prices, if you’re interested:

Siglap V: Located across Siglap Centre, this condo saw three tiny apartments sold in August 2010, at an average price of $701,904. These condos had an average size of 463 sqft, and sold for approximately $1,503 psf.

Bella Casita: Two units were sold in August 2010, at an average of $598,000 for 474 sqft. This translates to an average of $1,263 psf.

Suites@ Guillemard: Probably known as Singapore’s smallest shoebox condo project. A 388sqft unit went for sale in Feb 2010 for $544,000. That’s $1,404 psf!

Granted, the number of such units sold might be too small to affect the median psf of certain condo-dominated Districts such as Marine Parade or Bukit Timah. However, they might affect areas where larger condo units are fewer, in areas like Guillemard, Geylang and Balestier.

Many speculate that the rental yields of such units are too good to be true. It's hard to imagine someone paying $1,400 - $1,800 a month for a 400sqft unit. Read our take on how these tiny units will affect the market.

Via BT - Shoe-box units shrink median price of developers' sales. BT Fancy Chart here.

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