After falling 0.5 percent in July, prices of shoebox apartments posted a 3.1 percent rise in August, according to latest figures by the National University of Singapore’s (NUS) Singapore Residential Price Index (SRPI).
The price increases are more significant when compared to the overall SRPI that remained unchanged in July and August.
Defined as no larger than 506 sq ft in size, shoebox units are a relatively new trend seemingly related with residential affordability.
The SRPI Small, for small units, was introduced in July. According to NUS’ Institute of Real Estate Studies, “this is important market information which will help us understand the price behaviour of different segments of the market.”
In a Channel NewsAsia report, Dr Chua Yang Liang, Head of Research and Consultancy at Jones Lang LaSalle (JLL), said that the rise in the SRPI Small was underpinned by the residential needs of small and young families.
“Affordability is an issue,” noted Dr Chua.
It also appears that investors are becoming price sensitive. “You also can’t discount the fact that some are buying for investment,” he added.
On the other hand, the SRPI non-central, excluding small units, grew 0.5 percent, while the SRPI central (central region), excluding small units, dropped 0.7 percent.
“The price range is reaching a plateau with no increase. The growth from sub-sectors like non-central and smaller units implied a stronger demand while the central district, suffering from three months of contraction, showed the opposite,” said Nicholas Mak, Head of SLP International Research.
To contact the journalist, you may send your message to editor@propertyguru.com.sg