The island state’s population growth, scarce land and surging property values have prompted developers to shrink housing space.
Residential prices surged to a record at the end of 2011 in a city that’s about half the size of Los Angeles, and the government said in May it’s concerned that shoebox apartments are mushrooming as private home sales surged to a three-year high with record purchases of units that are smaller than 50 square meters (538 square feet).
“The new guidelines will discourage new developments consisting predominantly of ‘shoebox’ units outside the central area, but at the same time give flexibility to developers to offer a range of homes of different sizes to cater to the needs of various demographic groups and lifestyles,” according to the statement.
Shoebox units will increase more than four-fold to about 11,000 units by the end of 2015 from 2,400 at the end of last year, the authority said.
‘Almost Inhuman’
Singapore should curb the trend of shoebox apartments because they are “almost inhuman,” said Liew Mun Leong, chief executive officer of CapitaLand Ltd. (CAPL), Southeast Asia’s biggest developer. The government should intervene because these projects are “wasting” the country’s scarce land resource, he said in the interview in May.The smaller apartments helped boost sales, comprising 2,766 units or 42 percent of the sales in the first quarter, Li Hiaw Ho, executive director at CBRE Research, said in an e-mailed statement in July.
Home sales have climbed to 12,254 units this year through June 30, according to data from the authority. Suburban projects will be the “driving force” for developers in the second half of 2012, PropNex said.
The government’s guidelines are a “welcome move” amid concerns of smaller homes dominating the suburbs, according to Jones Lang LaSalle.
Consumer Trends
“The policy itself is well thought through,” Jones Lang, a Chicago-based property brokerage, said in an e-mailed statement. “Central area, where land prices are high, is excluded thereby allowing market forces to continue to dictate the relevant housing form especially through the measures of financial affordability and equally that of consumers’ preferences and trends.”The government doesn’t want shoebox units to form a “disproportionately large portion” of the housing supply in Singapore, the Urban Redevelopment Authority said today. Some new housing developments are made up mostly of these smaller units, sometimes as much as 80 percent of a project, it said.
A large concentration of such developments could add stress to the local road infrastructure with more units that the government had planned for, according to the statement.
By Pooja Thakur - Bloomberg
Related posts:
Singaporeans living in shoebox, the 'Mickey Mouse'
Singapore millionaires who don't feel rich
