Shoebox units in suburban places might not yield rental rates which are as high, analysts say.
Shoebox homes might not be the best place to invest your money, Maybank Kim Eng has suggested in a recent report on real estate in Singapore.The research arm of the bank has done an analysis on shoebox units, and found that the largest number of such units have been sold in the Balestier, MacPherson and Geylang areas.
While shoebox apartments may fare well in the rental market for urban centres, those in suburban places might not yield rental rates which are as high, analysts say.
In their report, Maybank Kim Eng questioned the viability of suburban shoebox units, which they say developers are "rushing to price at $1,500 to $2,000 per sq ft".
Minister for National Development Mr Khaw Boon Wan has warned on numerous occasions that the shoebox market for suburban areas remains untested and risky.
Echoing this sentiment, the Urban Redevelopment Authority (URA) said recently that it would intervene in the number of units developed in suburban estates.
From November 4, new guidelines to curb the development of shoebox units outside the central area will take effect. A total of 11,000 shoebox units are expected to be developed by 2015, with about 3,800 of them built outside the city centre.
Excessive development of shoebox units could also result in a strain on infrastructure, the URA said.
ljessica@sph.com.sg
Source: AsiaOne Sat, Sep 08, 2012