Shoebox apartments (units which are less than 500 sq ft in size) are becoming an increasingly popular choice among young singles and expatriate professionals in Singapore.
Property consultants believe they offer healthy yields of three to four percent, depending on the project, while residential yields in general stand at about three percent.
The popularity of shoebox units has confused some market watchers, who wonder how people can live in such small spaces, yet owner-occupiers and tenants have revealed they are happy with their little homes.
While there are inconveniences, including the lack of storage space, the ease of maintenance is a huge attraction. Natalie Sheguy, who resides in a flat of around 500 sq ft at Robertson Edge off Mohamed Sultan Road, indicated storage was one of her biggest problems.
Market experts believe that shoebox units are fetching strong rents now, as there are few of such completed projects. Some of the smallest ones, including Suites@Guillemard with units below 300 sq ft, are not ready for release yet.
Meanwhile, National Development Minister Khaw Boon Wan recently revealed that there will be 3,800 completed shoebox units by 2014. He wrote on his blog that most of the newer shoebox units will be located in the suburbs, which should make home buyers weigh the advantages and disadvantages carefully.
Donald Han, Vice-Chairman of Cushman & Wakefield Singapore, said that it will be “survival of the fittest” once more of these small apartments are released in the market.
“Demand for such homes is limited and only the most well-located ones will continue attracting interest as tenants are sacrificing space for convenience…the fad will pass and yields might come down for some,” he added.
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