http://www.straitstimes.com/Singapor...ry_798936.html
Shoebox units an untested market in heartland: Khaw
Minister says Govt monitoring rising popularity of such flats, will regulate if necessary
Published on May 15, 2012
A bedroom in a 635 sq ft three-bedroom apartment at Natura at Hillview Terrace in Bukit Batok. A typical three-bedroom unit occupies 1,000 to 1,500 sq ft of space. Shoebox units make up 1.2 per cent of the 210,000 non-landed private housing stock. -- ST PHOTO: JOYCE FANG
By Amanda Tan
NATIONAL Development Minister Khaw Boon Wan gave yet another warning on shoebox apartments yesterday, amid a craze for these small units.
Shoebox flats, which are 50 sq m (about 540 sq ft) or smaller, have been gaining ground among homebuyers in Singapore, and have proliferated, with many being built in suburban areas.
But the shoebox market in the heartland is 'untested', Mr Khaw said in Parliament, echoing earlier warnings from property consultants that it remains to be seen if tenants will bite.
The minister also said the Government is 'monitoring the trend of shoebox units in Singapore' and will consider 'additional regulations', if necessary.
He made a similar comment at a feedback forum earlier this month, saying the Government will 'step in' if the proportion of such homes becomes too high.
While the low absolute price of such flats has appealed to buyers, they have been criticised for driving property prices higher and being too small to live in, for example.
Mr Khaw, who was replying to Mr Ang Wei Neng (Jurong GRC), noted that there are about 2,500 completed shoebox apartments in Singapore.
These make up 1.2 per cent of the 210,000 non-landed private housing stock.
About 80 per cent of these completed flats, which are targeted mostly at singles and expatriates, are found in the Central Region, he said.
Mr Khaw added that the stock of shoebox units is expected to increase, hitting about 9,700 units by 2015. But unlike existing units, many new ones will be found in suburban areas.
While he has yet to have a clear picture of the buyer profile of these flats, Mr Khaw said that, at a glance, it is mostly Singaporeans 'with an HDB address'.
'Obviously, they don't plan to stay there because they won't be able to fit into this 50 sq m for a family of several (members)... Looks like they are investors parking their funds there and expecting to be able to rent out,' he said, suggesting that some buyers could have seen units in the Central Region being tenanted out relatively easily, and with a reasonable yield.
Still, Mr Khaw stopped short of introducing new measures now, as the heartland is still an 'untested market' for shoebox units.
He said: 'It is hard for me to intervene in the market thinking that I know better than the developers or the investors.
'So I think the minimum I can do is to alert everybody... and I think my job is to share information as much as I can with the investing public as well as the developers.
'But we are watching it closely and, if need be, if evidence is clear that we need to intervene, I will not hesitate.'
Mr Khaw also highlighted new rules which will be implemented later this week to provide more transparency for buyers in the property market.
These include requiring developers to provide more information, like the breakdown of a unit's total floor area.
In a separate reply to Mr Liang Eng Hwa (Holland-Bukit Timah GRC), Mr Khaw noted that several rounds of property market cooling measures have produced results.
For the first time in several quarters, private home prices saw a marginal decline in the first quarter of the year.
'These are encouraging signs that the market is moving towards a more sustainable path. But we must not let our guard down,' he said.
Still, he acknowledged concerns, like rising prices for mass market properties outside the Central Region, and said developments will be monitored closely.
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