Results 1 to 13 of 13

Thread: Analysts expect shoebox rents to drop 5%-10%

  1. #1
    Join Date
    May 2013
    Posts
    318

    Default Analysts expect shoebox rents to drop 5%-10%

    Dec 29, 2014

    Property analysts expect rentals of shoebox apartments to fall by five to ten percent in the coming years, on the back of an expected increase in supply, reported the media.

    Notably, around 6,200 shoebox units are slated to be completed over the next two years. This is a record number compared to the yearly average of 3,000 units during the last decade, said property consultant SLP International.

    SLP noted shoebox units located near MRT stations or within the city centre would enjoy better rentals compared to others.

    “Those shoebox developments that are located away from the city or MRT stations, I think they will not be doing very well in terms of their rental demand,” said Nicholas Mak, Executive Director of research & consultancy at SLP International.

    And furthermore, if they are located within the suburban areas where typically family units are in more demand, such developments may actually languish in the rental market,” he added.

    Shoebox units are generally small apartments with a space of less than 50 sq m.

  2. #2
    Join Date
    Mar 2012
    Posts
    7,827

    Default

    teddybear fake account in action again....LOL!!
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  3. #3
    Join Date
    Jan 2014
    Posts
    120

    Default

    Shoebox units will command good rental yield only in good locations. Generally those units are for the segment that want to live it up but had limited rental budget or individual who want a good location. Target profile are usually single expats. Those shoebox units out in neighbourhood competing with ECs and HDBs is almost a sales tactic to lure buyers into "parking their money" for inflation hedge.
    "How to make a fool useful for your properties? Let him continue to blow up Jurong prices and all other areas will keep up"

  4. #4
    Join Date
    Nov 2008
    Posts
    9,217

    Default

    Have been renting two bedder units to single expat in both CCR and Cityfringe. I suppose budget is the key criterion.
    Quote Originally Posted by Luke65 View Post
    Shoebox units will command good rental yield only in good locations. Generally those units are for the segment that want to live it up but had limited rental budget or individual who want a good location. Target profile are usually single expats. Those shoebox units out in neighbourhood competing with ECs and HDBs is almost a sales tactic to lure buyers into "parking their money" for inflation hedge.

  5. #5
    Join Date
    Jan 2014
    Posts
    120

    Default

    Quote Originally Posted by DC33_2008 View Post
    Have been renting two bedder units to single expat in both CCR and Cityfringe. I suppose budget is the key criterion.
    2 bedder in CCR and Cityfringe is apple to apple and with the same tenant profile, budget is key and correlates to the article said about shoeboxes in different locations.
    "How to make a fool useful for your properties? Let him continue to blow up Jurong prices and all other areas will keep up"

  6. #6
    Join Date
    Jan 2009
    Posts
    2,141

    Default

    "Those shoebox developments that are located away from the city or MRT stations, I think they will not be doing very well in terms of their rental demand"

    Guess the key words are either in city or near MRT.

    If in city and next to MRT will be the best: ) : )

  7. #7
    Join Date
    Mar 2012
    Posts
    7,827

    Default

    Quote Originally Posted by Allthepies View Post
    "Those shoebox developments that are located away from the city or MRT stations, I think they will not be doing very well in terms of their rental demand"

    Guess the key words are either in city or near MRT.

    If in city and next to MRT will be the best: ) : )

    Price of apartment that is city and next to mrt also "best"
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  8. #8
    teddybear's Avatar
    teddybear is offline Global recession is coming....
    Join Date
    Mar 2009
    Posts
    10,800

    Default

    Don't think very budget people who want cheap in OCR will rent shoebox at high rental right? So, end up shoebox in OCR may have to rent damned cheap to compete with EC and HDB and family size private condos?

    Quote Originally Posted by DC33_2008 View Post
    Have been renting two bedder units to single expat in both CCR and Cityfringe. I suppose budget is the key criterion.

  9. #9
    Join Date
    Nov 2008
    Posts
    9,217

    Default

    Quite likely to be the case in the next two years.
    Quote Originally Posted by teddybear View Post
    Don't think very budget people who want cheap in OCR will rent shoebox at high rental right? So, end up shoebox in OCR may have to rent damned cheap to compete with EC and HDB and family size private condos?

  10. #10
    Join Date
    May 2013
    Posts
    318

    Default

    Suburban OCR MM Jgateway sold at 17xx psf will suffer most in times of falling rental demand
    Mr Khaw wants single digit % fall in HDB resale prices. Suburban OCR MM prices will fall in tandem
    Tharman also wants meaningful correction.
    No upside for jgateway, but many downside risk - astute investors beware

    Quote Originally Posted by Ringo33 View Post
    Price of apartment that is city and next to mrt also "best"

  11. #11
    Join Date
    May 2012
    Posts
    4,035

    Default

    Quote Originally Posted by teddybear View Post
    Don't think very budget people who want cheap in OCR will rent shoebox at high rental right? So, end up shoebox in OCR may have to rent damned cheap to compete with EC and HDB and family size private condos?
    The most amazing thing is some of these OCR shoebox rents can indeed match or compare with HDB of similar sizes at similar locations. Still viable for many owners to price at those levels.

    Unless it's OCR plus far from MRT plus far from any business hubs plus very high prices. Even for such HDBs, there is still some demand. Hope nobody's fall into such categories!
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  12. #12
    teddybear's Avatar
    teddybear is offline Global recession is coming....
    Join Date
    Mar 2009
    Posts
    10,800

    Default

    How much can owners rent out 4 room HDB flats in Jurong East? $2k per month?

    How about 500 sqft MM rent out $2k per month but priced at $1700 psf or $850k? Any taker?
    At $2k per month MM still need to pay for condo maintenance fees, higher property tax (than HDB flats), then pay income tax etc, wah, lose much money!



    Quote Originally Posted by Kelonguni View Post
    The most amazing thing is some of these OCR shoebox rents can indeed match or compare with HDB of similar sizes at similar locations. Still viable for many owners to price at those levels.

    Unless it's OCR plus far from MRT plus far from any business hubs plus very high prices. Even for such HDBs, there is still some demand. Hope nobody's fall into such categories!

  13. #13
    Join Date
    May 2012
    Posts
    4,035

    Default

    Quote Originally Posted by teddybear View Post
    How much can owners rent out 4 room HDB flats in Jurong East? $2k per month?

    How about 500 sqft MM rent out $2k per month but priced at $1700 psf or $850k? Any taker?
    At $2k per month MM still need to pay for condo maintenance fees, higher property tax (than HDB flats), then pay income tax etc, wah, lose much money!
    Not referring specifically to Jurong East HDB, but I think you might be out of touch with market rates. For 4rm flats in Jurong East and West, the median rental is $2,500.

    http://www.hdb.gov.sg/fi10/fi10323p....t?OpenDocument

    850K feels too high and risky if you ask me, but do note that most OCR MMs hover around 400 to 800K in price. For the loans involved, it is highly sustainable!
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

Similar Threads

  1. Analysts expect HDB resale market to stabilise
    By reporter2 in forum HDB, EC, commercial and industrial property discussion
    Replies: 1
    -: 14-08-15, 19:16
  2. The so called expert expect mkt to drop 10 to 20%, who will sell?
    By Tay EG in forum Singapore Private Condominium Property Discussion and News
    Replies: 80
    -: 23-03-13, 17:07
  3. How much drop do u expect in next 24 mths
    By DaytonaSS in forum Singapore Private Condominium Property Discussion and News
    Replies: 345
    -: 17-12-11, 11:04
  4. Analysts expect shift in housing policy
    By mr funny in forum Singapore Private Condominium Property Discussion and News
    Replies: 71
    -: 25-05-11, 15:35
  5. Analysts expect a V-shaped recovery
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 31
    -: 25-10-09, 21:40

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •