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Thread: Paying for a shoebox

  1. #1
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    Default Paying for a shoebox

    The price of shoebox apartments now are pretty high, with those more than 400sft generally selling between $700K to $1M (or above $1M in CCR).

    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    Also, as a generic example, which would you choose: a brand new FH 400sft unit in D15 for say $800K, or a 900sft two bedroom unit in an old 99yr condo (e.g. Mandarin Gardens) for $900K?

    The shoebox to me does look attractive investment given the relatively lower quantum but I just wonder if people will pay that much to buy one in the future.

    Just trying to rationalize the above to see if I need to change my investment strategy.

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    M3 doubled from 2005 to 2012 ... what do u think?

    60yLH ??
    Last edited by phantom_opera; 14-09-12 at 08:06.
    Ride at your own risk !!!

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    Quote Originally Posted by silver023
    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    I am assuming that the other bedder size unit price also increase with time. You will need to target those who cannot afford other bedder size unit but die die want to stay in RCR/OCR.

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    Ture, money supply increased.. but it seems like that didn't translate into a proportionate income growth?

    Cumulatively between 2001 and 2011, the median monthly household income from work per household member of resident employed households rose by 20 per cent in real terms, with most of the gains coming from 2006 to 2011. On a total household income basis, the median monthly household income from work rose by 22 per cent in real terms between 2001 and 2011.

    Cumulative change in household income from 2011 to 2011: 49.2% increase (nominal), 21.9% (real).

    http://www.singstat.gov.sg/pubn/pape...ple/pp-s18.pdf

    So actually, if the Govt rolls out 60 yr leasehold, property prices might fall (due to lower quantum of these units)... and, the 10-20yr old leasehold projects will become somewhat more attractive? Hmmm...

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    The latest fashion now is MM 2 bedders of around 500sqft++. There are easier to rent out.

    MM 1 bedders are outdated.

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    Quote Originally Posted by silver023
    The price of shoebox apartments now are pretty high, with those more than 400sft generally selling between $700K to $1M (or above $1M in CCR).

    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    Also, as a generic example, which would you choose: a brand new FH 400sft unit in D15 for say $800K, or a 900sft two bedroom unit in an old 99yr condo (e.g. Mandarin Gardens) for $900K?

    The shoebox to me does look attractive investment given the relatively lower quantum but I just wonder if people will pay that much to buy one in the future.

    Just trying to rationalize the above to see if I need to change my investment strategy.
    Sometimes, we do not kow what we do not know.

    Water town was a typical example. So high, but the take up rate was good. It was sold base on a urban planning concept of look and feel.

    The same idea as South mumbai. Its a urban planning in motion.

    But back to this topic, in the first place, no one would imagine that the MM would be able to sell as it may not be functional. It sort of a SIT flat that was build in the early years before HDB. Tiny, cramp but able to squeeze a family of 5.

    Not much, but it is what it is.

    If the prices becomes the norm and there is a increase of prices for MM, then who is to say that the price of MM is considered expensive.

    Price is relative to when you purchase in time. I would find that Luxus Hill was expensive at 1.86 mil, it move to 2.9 mil. Yet there are people who buy. There is no right response on where the market is heading.

    50% down, 15% down after many months of incremental increase, u are smack right back into why din I buy or why so many people bought?

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    just like HDB set the floor, now MM set another floor for the bigger units... all property owners have no choice but to huat

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    Again another misconception of mm. Cannot compare mm to those hdb 1bedroom. Mm is a pte property not public housing, meaning people who are not that poor. This means tat the condition inside and outside is not cramp, dark and dirty like those hdb housing for the low income. Second, mm is never meant to squeeze 5people as a home! It is like telling u to squeeze 30people into a 1200sqft 5rm flat, doesnt make sense.

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    Quote Originally Posted by silver023
    The price of shoebox apartments now are pretty high, with those more than 400sft generally selling between $700K to $1M (or above $1M in CCR).

    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    Also, as a generic example, which would you choose: a brand new FH 400sft unit in D15 for say $800K, or a 900sft two bedroom unit in an old 99yr condo (e.g. Mandarin Gardens) for $900K?

    The shoebox to me does look attractive investment given the relatively lower quantum but I just wonder if people will pay that much to buy one in the future.

    Just trying to rationalize the above to see if I need to change my investment strategy.
    cannot anyhow wack number, by saying tat the mm 400 sqft is same price or closely priced to the older 900 sqft unit, it means tat the psf of the 900sqft mandarin gardens is about half of the mm unit, which isnt the case man. Need to look at psf., mm is usually about 20 to 30% more exp in terms of psf compared to another unit that is double its size. Hence if a mm cost 800k, a 900sqft will cost more than 1m, probably 1.2-1.3m. Assuming same district.

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    Quote Originally Posted by silver023
    The price of shoebox apartments now are pretty high, with those more than 400sft generally selling between $700K to $1M (or above $1M in CCR).

    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    Also, as a generic example, which would you choose: a brand new FH 400sft unit in D15 for say $800K, or a 900sft two bedroom unit in an old 99yr condo (e.g. Mandarin Gardens) for $900K?

    The shoebox to me does look attractive investment given the relatively lower quantum but I just wonder if people will pay that much to buy one in the future.

    Just trying to rationalize the above to see if I need to change my investment strategy.

    If not sure, better don't invest.

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    Best bet...buy brand new dual key with fresh 99yrs lease.

    For those older 99yrs LH, don't know whether they will succeed in extending the lease or getting enbloc now that the trend seems to be going towards shorter lease life.

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    Quote Originally Posted by leesg123
    cannot anyhow wack number, by saying tat the mm 400 sqft is same price or closely priced to the older 900 sqft unit, it means tat the psf of the 900sqft mandarin gardens is about half of the mm unit, which isnt the case man. Need to look at psf., mm is usually about 20 to 30% more exp in terms of psf compared to another unit that is double its size. Hence if a mm cost 800k, a 900sqft will cost more than 1m, probably 1.2-1.3m. Assuming same district.
    Fair enough, but question is, would it be wiser to pay the higher quantum?

    The numbers I suggested are just estimates. Think if we were to go into PSF, it may become more complex discussion and at the end of the day, for me, I will look at quantum as the first step and review PSF thereafter.

    Anyway, as e.g. Coralis selling 495sft for $840K ($1696psf), Mandarin Gardens selling 1000sft (2bdr) for $1.2M ($1189psf) or 829sft (1 bdr) for $800K ($1085psf).

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    Quote Originally Posted by silver023
    Fair enough, but question is, would it be wiser to pay the higher quantum?

    The numbers I suggested are just estimates. Think if we were to go into PSF, it may become more complex discussion and at the end of the day, for me, I will look at quantum as the first step and review PSF thereafter.

    Anyway, as e.g. Coralis selling 495sft for $840K ($1696psf), Mandarin Gardens selling 1000sft (2bdr) for $1.2M ($1189psf) or 829sft (1 bdr) for $800K ($1085psf).
    Ah, coralis is new, means more premium. also, the location for Coralis is more superior than Mandarin gardens cos got two malls, near hdb ammenities. u should compare coralis with the older devt 800 sqft dev there for better comparison.

    my take is that, if you want to invest in mm, go for smallest quantum. meaning go for the 3xx sqft (at least 360sqft). dont think that 350 sqft is very cramp compared to those 495 sqft, cos 495 sqft may come with huge balcony, planter or AC ledge. deduct may become 400 sqft livable area.

    rule of thumb, location, smallest possible quantum, at least 350sqft. go visit those top mm such as suites@ eunos for a feel of wat the tenant will experience. i think 344 sqft is not good, the 366 sqft size is comfortable. but tat location so so. i would budget 800k for a 3xx sqft at prime district 9 or 10 area. personally i think 840k for d15 mm not worth the bang.

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    Quote Originally Posted by silver023
    The price of shoebox apartments now are pretty high, with those more than 400sft generally selling between $700K to $1M (or above $1M in CCR).

    If anybody were to purchase these units as investment, then they are probably thinking that they would be able to sell these small units for more than $1M in the future. This of course is a matter of time.

    Question is, do you think people will fork out more than $1M to buy a 400sft apartment in RCR/OCR?

    Also, as a generic example, which would you choose: a brand new FH 400sft unit in D15 for say $800K, or a 900sft two bedroom unit in an old 99yr condo (e.g. Mandarin Gardens) for $900K?

    The shoebox to me does look attractive investment given the relatively lower quantum but I just wonder if people will pay that much to buy one in the future.

    Just trying to rationalize the above to see if I need to change my investment strategy.

    One room US$1Million, living room not included hor.

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    very soon, we will follow HK, developers will sell car park separately

    and then common lift area will be included
    Ride at your own risk !!!

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    Quote Originally Posted by azeoprop
    The latest fashion now is MM 2 bedders of around 500sqft++. There are easier to rent out.

    MM 1 bedders are outdated.
    You are very observant.

    I prefer 650-700sqft 2 bedder and FH. Any good recommendations?

    Thanks.

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    Quote Originally Posted by proper-t
    Best bet...buy brand new dual key with fresh 99yrs lease.

    For those older 99yrs LH, don't know whether they will succeed in extending the lease or getting enbloc now that the trend seems to be going towards shorter lease life.
    Dual key can be tricky for rental.

  18. #18
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    Quote Originally Posted by silver023

    Anyway, as e.g. Coralis selling 495sft for $840K ($1696psf), Mandarin Gardens selling 1000sft (2bdr) for $1.2M ($1189psf) or 829sft (1 bdr) for $800K ($1085psf).
    Why compare a BUC FH development with a very old 99LH project?

    Between these 2, i will pick the FH.

    Coralis location is alot better as well.

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    Don't be stupid to buy a resale shoebox now. Take it from a shoebox supporter who has been actively looking at this segment for over half a decade.

    The boat has long gone. The ones you see passing by now are all with holes underneath.

    There might still be some gems around. You will have to look REALLY REALLY hard though.

    Capital gain? Maybe. If you can find one with announced planned developments coming up nearby within 1km.

    Rental yield? At todays price, forget about getting good yields.

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    Quote Originally Posted by carbuncle
    Don't be stupid to buy a resale shoebox now. Take it from a shoebox supporter who has been actively looking at this segment for over half a decade.

    The boat has long gone. The ones you see passing by now are all with holes underneath.

    There might still be some gems around. You will have to look REALLY REALLY hard though.

    Capital gain? Maybe. If you can find one with announced planned developments coming up nearby within 1km.

    Rental yield? At todays price, forget about getting good yields.
    I think at the end of the day, just buy what you can afford.

    when gold was US$1000/oz, they say boat pass liao, when US$1200, say same thing. buy what you can lah.

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    Quote Originally Posted by leesg123
    I think at the end of the day, just buy what you can afford.

    when gold was US$1000/oz, they say boat pass liao, when US$1200, say same thing. buy what you can lah.
    if nothing good to buy then don't buy, just hold tight tight to whatever you already have (and don't sell either, at least not time to sell yet)....

    if nothing good to buy then don't buy, let your ca$h rot at 3-4% inflation rate is 96-7% capital protection....


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    Quote Originally Posted by carbuncle
    Don't be stupid to buy a resale shoebox now. Take it from a shoebox supporter who has been actively looking at this segment for over half a decade.

    The boat has long gone. The ones you see passing by now are all with holes underneath.

    There might still be some gems around. You will have to look REALLY REALLY hard though.

    Capital gain? Maybe. If you can find one with announced planned developments coming up nearby within 1km.

    Rental yield? At todays price, forget about getting good yields.
    Yup, I am actually inclined towards normal sized units (or at least 600sft), or old walk-ups (which are hugely popular now but suprebly overpriced).

    High rental yied? Have! Geylang... but that's another story and I bet there's a long discussion on this in the D14 thread.

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    Quote Originally Posted by carbuncle
    Don't be stupid to buy a resale shoebox now. Take it from a shoebox supporter who has been actively looking at this segment for over half a decade.

    The boat has long gone. The ones you see passing by now are all with holes underneath.

    There might still be some gems around. You will have to look REALLY REALLY hard though.

    Capital gain? Maybe. If you can find one with announced planned developments coming up nearby within 1km.

    Rental yield? At todays price, forget about getting good yields.
    yup the boat is long gone for now.. I still remember the last time skysuites @ anson at tanjong pagar some units were going at 690k+ [cheapest] then for the same stack at super high floor but still kenna blocked by icon were selling at 890k+[most exp] zzz

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    @ikan ya even smelly smelly put in fd also got 1.28% to mitigate the inflation, or if haven't use cpf can leave it in OA earn higher interest....

    @silver well geylang is not so simple. there are way too many to compete with yours so unless yours is the BEST or WORST of geylang (BEST can charge high high rent, WORST you would have bought low anyway and can charge low to get decent yield) you would have to fight with the other say 800 units of shoeboxes for tenants, not just upon TOP, but forever and ever going forward. You might have to prepare to accept low yield or months of vacancy while waiting for the one willing to pay. if anybody left in the first place.

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    @dtrax well those were the days. even 500k can buy a lot of things.

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    Quote Originally Posted by ikan bilis
    if nothing good to buy then don't buy, just hold tight tight to whatever you already have (and don't sell either, at least not time to sell yet)....

    if nothing good to buy then don't buy, let your ca$h rot at 3-4% inflation rate is 96-7% capital protection....

    Good points.

    People forget that during the last crisis few years ago, those who put their money in FD had the last laugh compared to those who chased after high yielding bonds. At least their principal is intact plus a small amount of interest.

    At today's prices, most yields for MMs are around 3.5-4%, CCR MM, some even lower and if minus 1% interest and 1% tax/mainten cost etc, its around 1.5-2.0%, and that presume there is no vacancy period. Capital appreciation plus minus 5%, despite the feel good factor again the last few months, prices are not going to run away.

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    Quote Originally Posted by ekl2ekl2
    Good points.

    People forget that during the last crisis few years ago, those who put their money in FD had the last laugh compared to those who chased after high yielding bonds. At least their principal is intact plus a small amount of interest.

    At today's prices, most yields for MMs are around 3.5-4%, CCR MM, some even lower and if minus 1% interest and 1% tax/mainten cost etc, its around 1.5-2.0%, and that presume there is no vacancy period. Capital appreciation plus minus 5%, despite the feel good factor again the last few months, prices are not going to run away.
    Those who are in the market looking for a property right now will realise prices have actually started over the past 2 weeks to "run away" especially for sub-sale and completed properties. Sellers have started withdrawing their properties from the market and asking prices have been jacked by.

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    Quote Originally Posted by nav14
    Those who are in the market looking for a property right now will realise prices have actually started over the past 2 weeks to "run away" especially for sub-sale and completed properties. Sellers have started withdrawing their properties from the market and asking prices have been jacked by.
    I also noticed this. esp for mm units below 800k (non-geylang).

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    Quote Originally Posted by azeoprop
    The latest fashion now is MM 2 bedders of around 500sqft++. There are easier to rent out.

    MM 1 bedders are outdated.
    provided the MM 2 bedders come with 2 toilets....
    many have just 1 toilet..

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    Quote Originally Posted by Rosy
    You are very observant.

    I prefer 650-700sqft 2 bedder and FH. Any good recommendations?

    Thanks.
    8 riversuites got 700sqft 2 bedders with good layout. But pricing ultra ex unless u are ok with totally blocked views unit.

    The upcoming Kovan regency got 603sqft mini 2 bedders as well.

    FH smaller developments all got MM 2 bedders.


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