Unpredictable outcome of shoebox apartments

[FilthyRich]

An article states that shoebox units continue to grow from the current 2500 completed apartment to 9700 in 2015.

As of now, 80% of these unit are found in the Central Regions of Singapore, however in time to come a larger percentage would fall into the heartlands of Singapore.

More of the middle income class would than be tempted to invest in such units to reap the high rental yield.

However, Minister of National Development Stated, and warned that the heartland is still an 'untested market' for shoebox units, and that the response may be unpredictable.

PLUS the government will not hesitate to intervene if situations gets out of hand.

SOURCE

In my opinion, housing pricing issue is already highly volatile, and this is the time for the government to step in, before the situation gets overly complicated.

[carbuncle]

TOTALLY AGREE. Ban MM from all regions other than CCR!!!!! Existing OCR MM owners to pay reduced property tax due to untested potential...

[Kelonguni]

TOTALLY AGREE. Ban MM from all regions other than CCR!!!!! Existing OCR MM owners to pay reduced property tax due to untested potential...

Very clever.

[ikan bilis]

we have approx about 1mil units of hdb.... and >200K of private residential units ??...

to me hor,... 10K units of MM still looks a bit low in percentage... "untested" does not mean you will get your finger/pectoral-fin burnt in MM...

don't listen to that cow's "cow-bear-cow-bull" lah...



(and note hor,... me not invested in MM and also do not like MM,... and that khaw/cow is still always my idol...)

[ysyap]

we have approx about 1mil units of hdb.... and >200K of private residential units ??...

to me hor,... 10K units of MM still looks a bit low in percentage... "untested" does not mean you will get your finger/pectoral-fin burnt in MM...

don't listen to that cow's "cow-bear-cow-bull" lah...



(and note hor,... me not invested in MM and also do not like MM,... and that khaw is still always my idol...)

Who is that cow? KBW, your idol?

[Leeds]

KBW might not be aware that many of the buyers with HDB addresses might not be buying MM purely for investment. I believe a large portion of the buyers are older singles who choose to buy MM rather than the inflated resale 3-rm HDB flats. There are also many young "successful" singles now living in HDB flats (with their parents) who want to move out to live independently. They choose to buy MM as they belong to the younger generation with aspiration for condo living.

These two group of people could well make up the majority of the buyers with HDB addresses. They are more than happy to live in confined space and see the opportunity to lease out their MM when they should ever get married someday.

I believe MM in suburban will continue to serve this growing market not serve by public flats.

KBW could well be right to say that he might not know more than what developers or investors know about MM.

Any CM if any I believe will be to curb demand and rising prices in the mass market segment to maintain a more sustainable market.

[Shoeboxsupporter]

An article states that shoebox units continue to grow from the current 2500 completed apartment to 9700 in 2015.

As of now, 80% of these unit are found in the Central Regions of Singapore, however in time to come a larger percentage would fall into the heartlands of Singapore.

More of the middle income class would than be tempted to invest in such units to reap the high rental yield.

However, Minister of National Development Stated, and warned that the heartland is still an 'untested market' for shoebox units, and that the response may be unpredictable.

PLUS the government will not hesitate to intervene if situations gets out of hand.

SOURCE

In my opinion, housing pricing issue is already highly volatile, and this is the time for the government to step in, before the situation gets overly complicated.

How to step in ? We have no clues how Government can step in, instead of benefit existing MM owners !

[hyenergix]

Govt will take 1-2 years to monitor e vacancy, rental, owner occupancy etc. Most OCR MMs haven't even TOP so there is actually v little to monitor. As long as price does not increase too much or VIPs complain abt MM in their neighbourhood, unlikely for further action.

[carbuncle]

we have approx about 1mil units of hdb.... and >200K of private residential units ??...

to me hor,... 10K units of MM still looks a bit low in percentage... "untested" does not mean you will get your finger/pectoral-fin burnt in MM...

don't listen to that cow's "cow-bear-cow-bull" lah...



(and note hor,... me not invested in MM and also do not like MM,... and that khaw/cow is still always my idol...)

Ah ya la... it's only 1% only the MM!!!

[carbuncle]

How to step in ? We have no clues how Government can step in, instead of benefit existing MM owners !

What's wrong with benefitting existing owners??? They took huge risk jumping in early when market is still largely UNTESTED!!!!


UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED UNTESTED

My new favorite term

[carbuncle]

D19 Kovan Grandeur (fetch rental as high as 2.6k)
D16 Eastwood Regency (very decent rents around 2.3k)
D14 Palmera East (just TOP)
D14 Cosmo (super high rental I think got 2.8k before)
D14 Centra Suites (just TOP)
D14 Centra Studios (just TOP)
D14 a lot others.... in Geylang - already TOP
D13 Suites @ Braddell (2.3k no problem)
D12 City Regency (2.5k not a problem)
D12 Airstream (just TOP)
D12 Suites @ Topaz (just TOP)
D05 Parc Imperial (need I say more???)
D05 The Foliage, Maylea (~2.6k)

and a lot more I haven't covered...

Simi UNTESTED!!!!!????

To what extent then considered TESTED?? Fetch 4k??

Or are those that I mentioned all in CCR??
http://spring.ura.gov.sg/lad/ore/login/map_ccr.pdf

[equalizer]

An article states that shoebox units continue to grow from the current 2500 completed apartment to 9700 in 2015.

As of now, 80% of these unit are found in the Central Regions of Singapore, however in time to come a larger percentage would fall into the heartlands of Singapore.

More of the middle income class would than be tempted to invest in such units to reap the high rental yield.

However, Minister of National Development Stated, and warned that the heartland is still an 'untested market' for shoebox units, and that the response may be unpredictable.

PLUS the government will not hesitate to intervene if situations gets out of hand.

SOURCE

In my opinion, housing pricing issue is already highly volatile, and this is the time for the government to step in, before the situation gets overly complicated.

Step in and do what?

All their previous measures have had limited effect because they have been administering the wrong medicine and not tackling the root causes. The measures have targetted speculators and foreigners when deep down we know that they are not the main force driving the market.
Tackling the root causes will be a political landmine (wealth effect of HDB, and immigration policy) so they have tried to use alternative medicine without considering the ramifications.

Look at the current measures - their efforts to reduce the purchasing power of buyers (e.g. SD and LTV) have driven developers to create smaller and smaller MM units to improve affordability because developers know that there is still very strong demand from local heartlanders.

The current MM phenomena is just a reaction to the policies themselves and is a detrimental side effect of the wrong medicine being administered.

[irisng]

Simple lah, since KBW is worried that the HDB owners might forced to sell their HDB should they invest in MM, then let the HDB owners choose between HDB and MM, if they want to keep HDB, then cannot buy MM (only apply to new purchases for MM units).

[rattydrama]

D14 Palmera East (just TOP) = 2.5k no problem.

D19 Kovan Grandeur (fetch rental as high as 2.6k)
D16 Eastwood Regency (very decent rents around 2.3k)
D14 Palmera East (just TOP)
D14 Cosmo (super high rental I think got 2.8k before)
D14 Centra Suites (just TOP)
D14 Centra Studios (just TOP)
D14 a lot others.... in Geylang - already TOP
D13 Suites @ Braddell (2.3k no problem)
D12 City Regency (2.5k not a problem)
D12 Airstream (just TOP)
D12 Suites @ Topaz (just TOP)
D05 Parc Imperial (need I say more???)
D05 The Foliage, Maylea (~2.6k)

and a lot more I haven't covered...

Simi UNTESTED!!!!!????

To what extent then considered TESTED?? Fetch 4k??

Or are those that I mentioned all in CCR??
http://spring.ura.gov.sg/lad/ore/login/map_ccr.pdf

[ysyap]

Simple lah, since KBW is worried that the HDB owners might forced to sell their HDB should they invest in MM, then let the HDB owners choose between HDB and MM, if they want to keep HDB, then cannot buy MM (only apply to new purchases for MM units).

Because you current have both???

[Laguna]

When frn bot COSMO from the developer at $1,000psf, we were laughing at him. Ya, the market was untested then.

And now, market has proven that he is right.

[carbuncle]

When frn bot COSMO from the developer at $1,000psf, we were laughing at him. Ya, the market was untested then.

And now, market has proven that he is right.

I think the Parc Imperial first round owner already laughing one whole round Singapore island and back liao...

[irisng]

Because you current have both???

No more HDB, sold it long ago.

[thomastansb]

I don't know what KBW is thinking. Step in and say what? MM can only rent out at 1k a month?

[irisng]

When frn bot COSMO from the developer at $1,000psf, we were laughing at him. Ya, the market was untested then.

And now, market has proven that he is right.

I wonder whether did Hong Kong test their markets or not? Overall, I think it is a matter of used to it for smaller space. Everytime there is an increase in prices for certain things, everybody makes so much noise, after a while, people just accept the facts and get back to normal.

[Leeds]

When frn bot COSMO from the developer at $1,000psf, we were laughing at him. Ya, the market was untested then.

And now, market has proven that he is right.

There are always going to have people laughing when someone buy on the high. Since we do not quite know when the bull run will end, the laughter will always continue. The important thing is knowing when to take profit before the tide subsides; or if we are buying for the long term, able hold on to the assets when they fall in values.

During past cycles, there are many cases of people laughing first and crying later when they missed the opportunity to take profit; and worst case, had to force sell their assets..

Timing the market is both an art and science. Some people are already taking profits while others see opportunity to sell even at higher price later.

That is why some people see the current situation as an opportunity while other see it as a threat. Some even try to find opportunity within the threat they see now.

[Kanarazu]

I wonder whether did Hong Kong test their markets or not? Overall, I think it is a matter of used to it for smaller space. Everytime there is an increase in prices for certain things, everybody makes so much noise, after a while, people just accept the facts and get back to normal.

MM is like McDonald Meal. Price goes up and portion becomes smaller over time. People still buy and got used to it.

[teddybear]

With all the europe crisis, China slowing down and scare of hard landing, Japan economy going nowhere, US still not recovering meaningfully and property price still so stable after 5 CMs, you can imagine when europe crisis is over and start to recover, US on confirmed recovery path pulling China and Japan up along the way, what will the property price in Singapore be? Some people are saying price will drop >50% or whatever will drop, what say you? I think, rather, price will go up >36% instead by 2018...

MM is like McDonald Meal. Price goes up and portion becomes smaller over time. People still buy and got used to it.

[blackapple]

The value of money is dropping.. I bet price of coffee will rise before of next chinese new year..

[Kanarazu]

The value of money is dropping.. I bet price of coffee will rise before of next chinese new year..

At this moment given interest rates so low properties seem to be good hedge against inflation.

[CCR]

At this moment given interest rates so low properties seem to be good hedge against inflation.

Every additional year of 1% interest is another one year you get To pay up your property practically free

[FilthyRich]

Some people are saying price will drop >50% or whatever will drop, what say you? I think, rather, price will go up >36% instead by 2018

What makes you think so?
with a 38 % increase in housing price, even HDBs might hot the million mark, which would make it virtually impossible for medium income to purchase houses.

[teddybear]

HDB hit $1m mark? You refer to resale right? Won't that be great since all singapore citizens will benefit as they can buy new launch BTO and sell as resale?

38% obviously not for all lah, surely you can't expect property like Sky Habitat sold at $1700 psf or Bedok Residences sold at $1500 psf still go up 38% right? I am referring to currently under-valued ones (mostly resale properties available, new launch no chance ).

38% is realistic as that is about 6% per annum only! Imagine inflation has been >5% all these while! Furthermore, S$ sooner or later sure must come down ones, become cheaper for foreigners to buy S$! Some really undervalued ones most likely will go up even more than 38%!

What makes you think so?
with a 38 % increase in housing price, even HDBs might hot the million mark, which would make it virtually impossible for medium income to purchase houses.

[Rysk]

With all the europe crisis, China slowing down and scare of hard landing, Japan economy going nowhere, US still not recovering meaningfully and property price still so stable after 5 CMs, you can imagine when europe crisis is over and start to recover, US on confirmed recovery path pulling China and Japan up along the way, what will the property price in Singapore be? Some people are saying price will drop >50% or whatever will drop, what say you? I think, rather, price will go up >36% instead by 2018...

POWER sia!!!

[focus]

Read from this blog ...
http://sgproptalk.blogspot.com/2012/...41892234845228

It seems some proponents of MM housing are actually owner-occupiers who are single and have decent earnings to buy a new HDB but cannot due to regulations. So a MM is the next best alternative for them and an upgrade since they didn't have their own room in their parents' HDB.

So probably alot of the buyers in OCR MMs are those people. Come to think of it, I actually had an ex-colleague who was like that. He bought a 1 bedder in a building near junction of bartley and serangoon. That was in 2004 and the building is not a condo. There was no facillities at all. Just a locked up gate in the building.