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

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    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.

    “[B]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[/B],” he added.

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

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

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    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.
    [I]"How to make a fool useful for your properties? Let him continue to blow up Jurong prices and all other areas will keep up"[/I]

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    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.

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    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.
    [I]"How to make a fool useful for your properties? Let him continue to blow up Jurong prices and all other areas will keep up"[/I]

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    "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: ) : )

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    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"
    "[I]Never argue with an idiot, or he will drag you down to his level and beat you with experience[/I]."

  8. #8
    OCR properties going to crash!

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    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.

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    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?

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    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"

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