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Thread: HDB dwellers think outside the shoebox

  1. #1
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    Default HDB dwellers think outside the shoebox

    http://www.businesstimes.com.sg/sub/...26118,00.html?

    Published February 15, 2011

    HDB dwellers think outside the shoebox

    Many snapping up tiny units to invest or to live in

    By KALPANA RASHIWALA


    (SINGAPORE) HDB dwellers are aiming small when it comes to buying private homes; they are scooping up more shoebox units.

    The big draw is the lower lump sum needed to invest in these units. So HDB dwellers are marching into this market segment in sharply rising numbers, shows a caveats analysis by Savills Singapore.

    The analysis of URA Realis caveats data shows that buyers with HDB addresses lodged 1,016 caveats for private apartments under 500 square feet in size last year - about 17 times the 59 such units bought by HDB dwellers in 2006.

    These tiny units made up 9.1 per cent of the total number of non-landed private homes picked up by buyers with HDB addresses last year, up from a one per cent share in 2006.

    In comparison, buyers with private addresses acquired 857 small-format apartments last year. While this was a big jump from the 77 such units they had bought in 2006, it could not keep pace with the demand from HDB dwellers. And shoebox units formed a much smaller share of just 4.3 per cent of the total non-landed private homes bought by these buyers with private addresses in 2010.

    'The increased demand for small-format or shoebox private apartments by HDB upgraders is a result of more such units being introduced into the market over the past two years. Moreover, some HDB dwellers could have shifted their investment targets from mid-sized to small-format private homes that are still relatively affordable in light of the past few rounds of property cooling measures and rising private home prices,' says Savills' senior manager (research and consultancy) Christine Sun.

    Savills' analysis also showed that in the 2006-2010 period, the shoebox units acquired by HDB dwellers tended to be mostly in mid-tier locations such as postal districts 3, 5, 6, 7, 8, 12, 13, 15 and 21 (covering places like Queenstown, Pasir Panjang, Beach Road/Middle Road, Little India, Balestier, Braddell, Telok Kurau and Upper Bukit Timah).

    'Many of these private homes are conveniently located within walking distance of an MRT station or are near amenities. Their good location, affordable lump sum price quantum and rental potential may have made these small-format private homes in mid-tier locations more attractive than those in the prime and mass markets,' said Savills.

    DTZ's head of consulting & research (SE Asia), Ong Choon Fah, said: 'We know HDB dwellers are very price-sensitive. They form a huge market with huge aspirations to upgrade from public to private housing; however, they may be quite constrained by the price range they can afford. So shoebox units have opened up a whole new investment opportunity for them.

    'Some HDB dwellers buy shoebox apartments for investment; some young people may want to move out and enjoy a condo lifestyle at a price they can afford. In some instances, there are shoebox units in projects with a lot of facilities, sometimes not just at ground level but also sky gardens featuring a second gymnasium and swimming pool within the development. So residents may entertain their friends at these common facilities since their homes may be too small for this,' she added.

    The most popular project sought by HDB dwellers who picked up shoebox apartments last year was Viva Vista at South Buona Vista Road/Pasir Panjang Hill with 63 shoebox units sold, followed by Haig 162 (51 caveats), Parc Elegance in the Telok Kurau area (46 units), RV Edge on River Valley Road (45 units) and Waterbank at Dakota (38 units) facing Geylang River.

    One factor that could diminish the appeal of investing in a shoebox apartment among some HDB dwellers is the rule change announced last August which bans buyers of non-subsidised HDB resale flats from investing in a private home during the HDB flat's five-year minimum occupation period (MOP), say analysts.

    Still, HDB dwellers who have fulfilled the MOP may find it appealing to invest in shoebox apartments, given the higher rental yields. But as more such projects are completed, some owners who want to occupy them may be put off when they see just how small they are.


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    Can I suggest a Facebook "Like" function?
    Yee ha! Did I tickle your funny bone?


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    I wonder if or how many buyers have tried to live in a place smaller than 500sqft

    I did it in Hong Kong for only for a few months before i decided it was too small. The only way i could get clothes out my wardrobe was take the doors off and store them under the bed.

    It's tough. No place to, um, swing-a-cat and very claustraphobic.



    Shoebox flats...... not a step in the right direction.

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    In hong kong, place for sleeping only. Space at yam chia place, park and side walk etc. Many people dun go home till late at night. Life for u there.

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    Here is going the same way.

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