Why shoebox units continue to be popular

November 23, 2022

For the purpose of this article, we define shoebox units as condominium units that are 46 sq m (500 sq ft) or less. Shoebox units are popular with investors because their affordable price quantum translates to lower barriers of entry.

Smaller units are also popular with developers because of their higher unit price. Their small size also allows developers to build more units per land parcel.

However, the small size of shoebox units attracts many criticisms. They are often deemed to be too small for long-term stay by owner-occupiers, especially for families, hence forcing owner-occupiers to move if their family size increases. Investors may find that the compact size limits the potential tenant pool to singles on a budget unless there is a tight supply of rental housing.

Despite these criticisms, shoebox units still play a necessary role in the residential market, although sales transactions for shoebox units account for only 7% to 11% of all sales transactions of condominiums in Singapore from 2012 to 2022.

District 19 has the most sales transactions for shoebox units

Based on URA data on sales transactions over the past 12 months, five districts have at least 100 transactions of shoebox units.

District 19 has the most sales transactions of shoebox units, with 242 transactions. The number of transactions in the district was given a boost by sales of such units in The Gazania (41 transactions), Riverfront Residences (34 transactions) and Kingsford Waterbay (20 transactions).

Regulations and implications

In 2012, URA introduced guidelines on the maximum permissible number of dwelling units for a non-landed residential development outside the Central Area. The maximum number of units was derived by dividing the gross floor area (GFA) of the proposed building by 70 sq m (753 sq ft). Four areas (Telok Kurau, Kovan, Joo Chiat and Jalan Eunos) were subject to more stringent requirements of 100 sq m (1,076 sq ft) to better address local infrastructure capacity concerns arising from new developments.

Read more at: https://www.edgeprop.sg/property-new...nue-be-popular