Shoeboxes Two Years On

The housing market is near the bottom, if not already the bottom, without a doubt. Most investors either are sitting on the sidelines, suffering low yields by accepting lower rents, or seeking other avenues to dump their cash in after managing to sell bleeding assets.

Those who were lucky enough to enter the market in 09/10 tell themselves they have to bite their lips and sit it out. Others who were not so lucky and bought at the peak in 11/12 curse and swear as they can never match the lower  asking rents of the early bird investors, nor their selling prices should they decide to throw in the towel.

Let us understand the situation better with some stark examples.

1. Parc Imperial (D05)

Poster boy in its heyday, a 366sf unit easily went for $700k and could lease for $2800-3300 per month in early 2013. That was a decent 5.7% yield. Fast forward to May 2015 two years on. A similar unit went for $2000. That translates to a 39% drop.

2. Alexis (D04)

Another hot favorite. In 2013, a 3xx sf unit could rent for $3400-3500 and sell for over $800k. Still above 5% yield. Recent months' rent for a similar sized unit went for $2400-2500. An almost 30% drop in a short span of 2 years.

3. Illuminaire on Devonshire (D09)

Prime district shoeboxes aren't spared either. A 4xx sf unit rented for $4000 mid-2013. A similar unit was rented for $2700 in May. That is a 32.5% decline.

The above were RCR and OCR projects. How about suburban ones?

4. Prestige Loft (D15)

The Telok Kurau area is the first of many shoebox-swarmed locales to get hit with unit size cooling measures. 3xx sf units here rented for $2500 two years ago. Now they only fetch $1900, 24% lower.

5. Suites @ Kovan (D19)

The other shoebox laden area, 366 sf unit here fetched $2400-2500 in 2013. Now they go for $1800-2000, 20-25% less.

So here we can see no district is spared from the doom. But it does seem like the suburban did get hit slightly less harder. Afterall, they did not enjoy the great degree of price surges the core districts were known for.