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Shoebox units surfacing in auctions

http://www.propertyguru.com.sg/property-management-news/2014/12/76998/shoebox-units-surfacing-in-auctions

Nine shoebox units were put up for mortgagee sale in 2014, according to a report by Colliers International.
These small units at various locations such as Geylang, Woodlands, and Haig Road are generally priced below $1 million.
Considering there were no mortgagee listings for shoebox units in the past four years, the report said this notable trend reflects the widespread effects of the cooling measures and tightened credit rules.
Colliers International’s Director of Auction and Sales Annie Chan said, “Besides singles and couples with no kids, investors are also drawn to shoebox apartments due to their relatively-affordable price quantum.”
However, investors who are servicing multiple loans may have faced difficulties in the increasingly-competitive leasing market.
“As such, those who are unable to secure tenants or have been hard-pressed to accept lower rents may find it a stretch to service their mortgage. This may then result in default in their monthly mortgage payments,” she added.
Although there is no official definition on the size of shoebox apartments, they are generally characterised by a space of less than 50 sq m or 538 sq ft. These units garnered strong interest in recent years as they were seen to promise high capital gains and rental returns.
In 2012, the Urban Redevelopment Authority (URA) announced new guidelines to cap the number of shoebox units, especially for those in suburban areas.

Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg

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