http://www.straitstimes.com/archive/thursday/premium/money/story/ratio-hdb-owners-buying-shoebox-units-report-20140227
Ratio of HDB owners buying shoebox units up: Report
These units, 500 sq ft or less, likely for investment, not upgrading: DTZ
Published on Feb 27, 2014
By Melissa Tan
A BIGGER proportion of Housing Board flat owners are opting for shoebox units when they buy private homes, according to property consultancy DTZ yesterday.
The purchases were likely for investment and not upgrading, said the report, which also noted that private home sales tumbled 40 per cent last year.
The buyers' market is expected to continue this year, it added.
Shoebox units, which are homes that are 500 sq ft or less, accounted for 17.3 per cent of HDB dwellers' private home purchases in the fourth quarter last year.
Such units made up a record 13.3 per cent of all private home purchases last year by people with HDB addresses, with Bartley Ridge at Mount Vernon Road, J Gateway in Jurong East and D'Nest in Pasir Ris the most popular projects.
"Given that most HDB flats are larger than 500 sq ft, these shoebox unit purchases by HDB addressees are not likely to have been bought by HDB upgraders looking at owner-occupation and are more likely for investment," DTZ said.
HDB dwellers also took a bigger share of the shoebox unit market, accounting for 62 per cent of all sales in the segment last year, up from 60 per cent in 2012.
However, even the greater interest from HDB dwellers could not stem a fall in the transactions of shoebox apartments.
Sales of the so-called "Mickey Mouse" flats fell 32 per cent to 2,057 units last year from 3,000 the year before - their first annual decline since 2009 and one that is in line with a drop in the overall private home market.
DTZ said private home sales tumbled 40 per cent last year as tough property curbs caused buyers to tighten their purse strings.
Overall sales were dragged down by secondary transactions - these refer to sales before a project is completed or resales - which plunged to a 10-year low.
Secondary sales plummeted 50.5 per cent last year from the year before to just 7,755 units, the lowest volume since 2004, DTZ said.
DTZ said this year is expected to continue to be a buyers' market, with sales volumes remaining weak and buyer demand "becoming increasingly project-specific and price-resistant".
However, it also said that the "healthy response" to recent launches such as The Hillford suggests that there are still buyers waiting to snag a good deal.
The Hillford, which is on a 60-year lease, sold all 281 units in just one day when it was launched last month at a median price of $1,105 per sq ft (psf), according to Urban Redevelopment Authority data.
Its strong sales were "presumably due to the lower price quantum, reflecting the shorter tenure of the development", DTZ said. "Foreign demand could also be creeping back," it added.
Although private home transactions sank across all groups of buyers last year, foreign purchases fell by a smaller extent than those made by Singaporeans and permanent residents.
The share of private homes bought by foreigners inched up from 6 per cent in 2012 to 9 per cent last year, though that was still far below the 18 per cent posted in 2011 before the additional buyer's stamp duty was introduced in December that year.
Buyers from mainland China were in the top spot last year, followed closely by Malaysians, and Indonesians behind them.
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