Many HDB flat owners prefer shoebox units when it comes to purchasing private homes, according to a DTZ report.
The share of shoebox units, or homes measuring less than 500 sq ft, bought by owners with public housing addresses increased to 62 percent in 2013 from 60 percent the year before.
Shoebox units accounted for 17.3 percent of private property purchases by HDB dwellers in the fourth quarter of 2013, and 13.3 percent for the whole year.
Projects such as D’Nest, J Gateway and Bartley Ridge emerged as the most popular among this group of buyers.
DTZ noted that shoebox units purchased by flat owners were not likely to have been acquired for owner-occupation but rather for investment purposes, considering that most HDB flats are bigger than 500 sq ft.
Despite the rise in shoebox acquisitions by HDB dwellers, sales of such units fell 32 percent to 2,057 units in 2013 from the previous year’s 3,000 units.
This is in line with a drop in the overall private housing market, which saw sales plunge 40 percent in 2013 as buyers tightened their belts amid tough property curbs.
While the decline in private home purchases was evident across all buyer groups, “foreign purchases fell by a smaller extent compared to purchases by Singaporeans and Singapore Permanent Residents (PRs)”, said DTZ.
Specifically, purchases by foreigners climbed to nine percent in 2013 from six percent in 2012. However, this is still way below the 18 percent share they had in pre-ABSD 2011.
DTZ believes that 2014 will continue to be a buyer’s market, with purchase demand becoming increasingly project-specific and price-resistant while transaction volumes will remain weak.
“Buyers will continue to be selective as their purchasing power has been clipped by the TDSR rules and the earlier ABSD measures,” it added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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