Buying flats called shoeboxes: Khaw's new blog

http://www.straitstimes.com/Breaking...ry_683482.html

Jun 24, 2011

Buying flats called shoeboxes: Khaw's new blog

By Tan Herng Yih


MINISTER of National Development Khaw Boon Wan shared his thoughts on his latest blog on Friday regarding very small apartments popularly labelled 'shoe-box' units here in Singapore.

Shoe-box units are typically below 500 square feet, and there has been an increasing demand for it. Mr Khaw wrote this blog post on Friday titled: 'Buying Shoe Boxes?'.

He wrote on his blog (as is carried here): 'Many Hong Kong apartments are almost shoe-boxes; Tokyo too. Singaporeans are however house proud and we want our apartments to be cosy, comfortable and spacious. Most will not have land, but they must not be claustrophobic.

'The emergence of shoe-box units here is a recent phenomenon. And it seems to have a demand. The annual take-up of such units has tripled from 300 units in 2008 to 1,900 in 2010, or from 6% to 12% of developers' sales over the same period.

'Industry analysts and developers made these comments to me about shoe boxes. First, many of these units will be completed soon. By 2014, the total number of completed units will increase from 1,100 to 3,800, based on known plans. Second, some developers who bid high prices for sale sites, are planning to build shoe-box units, adding to the build up. Third, the newer shoe-box developments are in the suburbs. Their appeal to tenants remains untested.

'Some analysts wonder aloud if buyers know what they are in for. Some have suggested that the government should step in to impose a minimum size. My instinct is not to second guess the market. Some shoe-box units do add to the diversity of housing options here. But we are closely watching its development.'

Read the remainder of Mr Khaw's blog post here: http://mndsingapore.wordpress.com

That means not doing anything to restrict development and sales of MM projects. It would be benefit current MM owners if there are restrictions due to a limit on supply. Not doing anything means more expensive properties due to higher psf which would benefit developers and banks.

Hmmm.... More measures coming MM path ?
maybe cannot be v v small ?? < 300 sf ? :)

the newer shoe-box developments are in the suburbs. Their appeal to tenants remains untested.
Not only for shoe-box developments, but also buying suburbs properties for investment and rental are untested. :beats-me-man:

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Originally Posted by mr funny

http://www.straitstimes.com/Breaking...ry_683482.html

Jun 24, 2011

Buying flats called shoeboxes: Khaw's new blog

By Tan Herng Yih


MINISTER of National Development Khaw Boon Wan shared his thoughts on his latest blog on Friday regarding very small apartments popularly labelled 'shoe-box' units here in Singapore.

Shoe-box units are typically below 500 square feet, and there has been an increasing demand for it. Mr Khaw wrote this blog post on Friday titled: 'Buying Shoe Boxes?'.

He wrote on his blog (as is carried here): 'Many Hong Kong apartments are almost shoe-boxes; Tokyo too. Singaporeans are however house proud and we want our apartments to be cosy, comfortable and spacious. Most will not have land, but they must not be claustrophobic.

'The emergence of shoe-box units here is a recent phenomenon. And it seems to have a demand. The annual take-up of such units has tripled from 300 units in 2008 to 1,900 in 2010, or from 6% to 12% of developers' sales over the same period.

'Industry analysts and developers made these comments to me about shoe boxes. First, many of these units will be completed soon. By 2014, the total number of completed units will increase from 1,100 to 3,800, based on known plans. Second, some developers who bid high prices for sale sites, are planning to build shoe-box units, adding to the build up. Third, the newer shoe-box developments are in the suburbs. Their appeal to tenants remains untested.

'Some analysts wonder aloud if buyers know what they are in for. Some have suggested that the government should step in to impose a minimum size. My instinct is not to second guess the market. Some shoe-box units do add to the diversity of housing options here. But we are closely watching its development.'

Read the remainder of Mr Khaw's blog post here: http://mndsingapore.wordpress.com

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haha teddy.. why you want to turn every thread into ccr vs ocr.. we know your point already and acknowledge ccr is the best liao..

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Originally Posted by teddybear

the newer shoe-box developments are in the suburbs. Their appeal to tenants remains untested.
Not only for shoe-box developments, but also buying suburbs properties for investment and rental are untested. :beats-me-man:

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Bcoz vitamin M not enuff mah:p

buying suburban properties for investment has been tested all along. Those first buyers of any existing resale condo in the OCR have already made a tidy sum from their investment. First owners of Centris, Caspian, Lakeshore and many many projects in the OCR are laughing their way to the banks be it oversupply or undersupply or whatever supply situation and it is definitely wrong to say OCR properties make poor investment and CCR is definitely better. Rental yield it is needless to say OCR trumps CCR by a fair margin.

It is better to buy 10 OCR condos at $750k each and renting each one out for $3.5k a month (total rental received is $35k a month) compared to buying a $7.5 million condo in the CCR and renting one out at only $15k a month. Some people might argue that it is easier for the $7.5 mil CCR property to appreciate in value to $8.5 mil during a property bullrun, but in a bull market, a $100k increment in each OCR property invested would also mean a capital appreciation of $ 1 mil ($100k x 10 properties). My point is this, never dump all the money into one property in the CCR, good to diversify and buy a mixed basket of properties in CCR, RCR and OCR. Those die hard investors of CCR have been losing out on OCR investment opportunities big time over the last few years and I have also made a late entry into OCR (sigh) but better late than never.

Dun tink can find 750k rental 3.5k now....

More like 1mil 3.5k liao

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Originally Posted by devilplate

Dun tink can find 750k rental 3.5k now....

More like 1mil 3.5k liao

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3 bedders and slightly above hdb's by 50%...

new benchmark for 3 bedders... above 1200 sqf... $1 Million at least.

you still can. If you trust my recommendation, you can buy this unit (can bargain to below $800k). If you lose money, come and find me lol :D

http://www.propertyguru.com.sg/listi...e-regent-grove

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Originally Posted by devilplate

Dun tink can find 750k rental 3.5k now....

More like 1mil 3.5k liao

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Quote:

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Originally Posted by Regulators

you still can. If you trust my recommendation, you can buy this unit (can bargain to below $800k). If you lose money, come and find me lol :D

http://www.propertyguru.com.sg/listi...e-regent-grove

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Let say 800k , 3k....not bad...

May need reno....10+ yo..hmm

this kind of condo don't need to spend a bomb with reno lah. Spend $5-10k and after that can rent out liao. Govt going to develop CCK area so I think this one still can buy. Some more it is a skip and hop to MRT...

Quote:

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Originally Posted by devilplate

Let say 800k , 3k....not bad...

May need reno....10+ yo..hmm

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Quote:

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Originally Posted by Regulators

this kind of condo don't need to spend a bomb with reno lah. Spend $5-10k and after that can rent out liao. Govt going to develop CCK area so I think this one still can buy. Some more it is a skip and hop to MRT...

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New plans for cck?

govt broadly said they are going to develop suburban areas such as CCK, Punggol etc but did not give specific plans yet

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Originally Posted by devilplate

New plans for cck?

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Quote:

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Originally Posted by Regulators

govt broadly said they are going to develop suburban areas such as CCK, Punggol etc but did not give specific plans yet

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CCK very good bet... some stronghold fortress....either now or to be. Got hill to protect right?

SINGAPORE: National Development Minister Khaw Boon Wan has urged potential homeowners to weigh the benefits and risks of buying so-called "shoe-box" apartments.

These are housing units which measure 500 square feet or less.

In his latest blog entry, Mr Khaw said the government is watching the development of these units.

Last year, about 1,900 of such apartments were sold, compared to 300 units in 2008.

In proportional terms, the take-up rate last year stood at 12 per cent of developers' sales, up from six per cent in 2008.

Four in five buyers were Singaporeans looking for an investment opportunity - undeterred by the fact that these are priced 10 or 20 per cent higher per square foot (psf) than larger units in the same development.

Many rent to expatriates or singles.

PropNex director David Poh said: "The total area is smaller, so even if you times a higher per-square-foot, you still get a smaller total lump sum payment. Which is more affordable for homeowners and investors to enter the market."

Mr Poh added when the units are sold, they're also sold on higher psf terms compared to units of other sizes.

He noted a typical 400 square feet unit in town may cost some S$1,500 psf, which works out to about S$600,000, which still appeals to buyers as larger units of about 1,000 sq feet in the same area tend to cost upwards of S$1 million.

But industry observers doubt the trend can be sustained.

In his blog, Mr Khaw outlined some concerns.

These include more completed units by 2014 -- when total number of units will rise from 1,100 to about 3,800 -- and the fact that some of the newer developments are in the suburbs, where their appeal to tenants is still untested.

Figures by the Urban Redevelopment Authority give an indication of the number of suburban developments.

As of March, there were about 3,300 units that have been sold and will be completed in the next few years.

Twenty-three per cent of them are located outside the central region, compared to 17 per cent of the existing stock of 1,100 completed shoebox units currently.

Mr Khaw added that some developers who bid high prices for land, are also planning to build shoe-box units, adding to the supply of such homes.

Some analysts have wondered if buyers know exactly what they're going in for, and have asked for the government to impose a minimum size.

But Mr Khaw said he would rather not second-guess the market. Besides, shoebox apartments add diversity to housing options here.

He pointed to recent rules that require developers to give details of each unit's layout, and the prices of all units.

The aim, he said, is to make sure buyers know what they're paying for.

-CNA/wk

http://www.businesstimes.com.sg/sub/...31940,00.html?

Published June 25, 2011

Look at shoe-box units with caution: Khaw

Blog entry comes amid suggestions that the government should step in to impose a minimum size for private homes

By UMA SHANKARI


THE Ministry of National Development (MND) is 'closely watching' the development of small- sized, or 'shoe-box', apartments in Singapore.

Writing in his blog, National Development Minister Khaw Boon Wan yesterday urged potential buyers to weigh the benefits and risks of the so-called shoebox units carefully.

He also suggested that analysts can 'refine' their analysis by including separate analyses for each category of housing products.

'Comparing price per square foot (psf) for different products is like comparing apples with oranges,' Mr Khaw said.

His blog entry comes amid suggestions that the government should step in to impose a minimum size for private homes.

Shoe-box apartments are typically below 500 sq ft. The emergence of such units here is a fairly recent phenomenon although they are common in Hong Kong and Tokyo.

Mr Khaw said in his post that there appears to be demand for shoe-box apartments. The annual take-up of such units has tripled from 300 units in 2008 to 1,900 in 2010, or from 6 per cent to 12 per cent of developers' sales over the same period.

Some 80 per cent of the buyers are Singaporeans. They are presumably buying these units as an investment and hope to rent them out to expats or singles, Mr Khaw said.

He added that industry analysts and developers have told him that many shoe-box units will be completed soon. By 2014, the total number of completed units will increase from 1,100 to 3,800, based on known plans.

In addition, some developers, who have paid high prices for residential plots, are planning to build shoe-box units. This will add to the build-up.

The analysts and developers also noted that the newer shoe-box developments are in the suburbs, and their appeal to tenants remains untested.

Said Mr Khaw: 'Some analysts wonder aloud if buyers know what they are in for. Some have suggested that the government should step in to impose a minimum size.'

'My instinct is not to second- guess the market. Some shoe-box units do add to the diversity of housing options here. But we are closely watching its development.'

He added that, for now, potential buyers should weigh the benefits and risks carefully.

Mr Khaw also said that MND, on its part, requires developers to give an accurate representation of units, both within the show flats and in the sales materials. Analysts can also help to refine their analyses, he said.

Analysts welcomed Mr Khaw's remarks.

'The good thing about his statement is that this is the first time a government official has highlighted the economics of buying a show-box unit,' said International Property Advisor chief executive Ku Swee Yong.

But the analysts also noted that it is difficult to compile data on price trends and yields for shoe-box units as there is no historical data.

'For investors, paying a high psf price for a shoe-box unit could make sense if the unit can command a high psf rent. Right now, we suspect that they can't get those kinds of high rentals, but there is no way to be sure as most of these units are not on the market yet,' an analyst said.

Home buyers could also be pushed to look to smaller-sized units because of rising costs and home prices, said Joseph Tan, executive director for residential at CB Richard Ellis (CBRE).