TODAY's opinion piece: Your opinion?

Below are two viewpoints published in the TODAY paper today.

The wife and I applaud the assumptions put forth by Mr Wong to debunk the common notion that most buyers of shoeboxes are investors. We wonder if the relevant authorities/experts (URA, CBRE Research etc) will care to respond.

Even if the government does outlaw direct absorption of extra stamp duty, there are many other ways/methods that property developers can "offset" such duty. And a rose by any other name is still a rose.... and smell just as sweet.

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Property cooling measures: Round 6...?!

Buoyant property sales in recent months have sparked fresh concerns that another round of cooling measures may be on the cards despite the last round of measures introduced in December 2011.

Experts said the appetite for home purchases in Singapore is still strong despite several rounds of cooling measures that were introduced by the government.

In fact, property developers have been selling over 2,000 private homes every month in 2012 -- well above the monthly historical average of 1,400 units.

During the last parliament sitting, National Development Minister Khaw Boon Wan told the House that the five rounds of measures implemented between September 2009 and December last year would need more time to cool the property market.

Although property sales are expected to remain above 2,000 units a month over the next few months, experts said it was unlikely that the authorities would introduce another round of cooling measures soon.

Norman Ho, a real estate partner at Rodyk & Davidson, said: "I don't think any cooling measures should come in any further. ... I don't think (capital gains tax) should be implemented because Singapore, being an open economy, ... it actually has a repercussion on the economy.

"It destabilises the economy. It just doesn't affect the purchasing of residential property itself, but it affects the whole outlook of the economy."

Low borrowing rates and a flush of liquidity in the market have been blamed for the buoyant property demand.

Experts said one way to curb demand is to restrict housing loans available for home buyers.

Donald Han, HSR's special advisor, said: "To restrict the number of multiple investments per investor, one possible option would be to look into the loan-to-value ratio.

"That is, if you are looking at your first property for your own occupation, that loan quantum can be as high as 80%. But once you are buying into your second and third property, that could come down to as (low) as 60% or even 30 to 50%."

Nicholas Mark, research head at SLP International, said: "The problem right now in the residential property market is not the level of speculation nor high price growth.

"Prices are stabilising. In fact in some sectors, prices are declining marginally, while the level of speculation has reached a three-year low.

"The problem is actually over-investment -- there is a risk there could be a bubble caused by shoebox apartments."

Analysts said the rising supply of shoebox apartments is one of the factors that is keeping the property sector hot.

By 2015, some 9,700 shoebox apartments are projected to be ready. Eight out of ten apartments will be in the heartlands, an untested market for such apartments that is the size of four car park spaces.

Some analysts have suggested that any possible cooling measures should just be focused on this segment.

Source: Channel News Asia

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The Real Deals (24-05-2012)

Even Maybank Kim Eng Reasearch has gotten into the "shoebox" action with their latest issue of The Real Deals.

Click on the link to read the report:
http://www.scribd.com/doc/95042500/The-Real-Deals-24-05-2012#fullscreen

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Shoeboxes: In the spirit of balanced posting...

While the writer has raised some interesting and valid points, it's rather sad to think that the notion of a home these days are nothing more than a place to go back to sleep to... much like a hotel.

Maybe one reason why many Hong Kongers are rarely at home is because of the fact that most of their apartments are so lacking in space that they have little choice but to go out...?


Reference: "Shoebox flats = Inhuman? Where's the logic?" - The Sunday Times, 27th May 2012

 

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Here's what the CEO of CapitaLand thinks about shoebox homes...

The wife and I have been accused of being (quote) "a frog in a well to say that any space below 600sqft is unlivable or not conducive for family living" (unquote).

We still find the "accusation" somewhat puzzling (absurd is probably the better word but we try to be nice). While the wife and I have openly acknowledged that we are no fan of shoeboxes, the whole livability/condusiveness debate actually stamped from a letter sent to the ST Forum page, which we had picked up and posted on our blog for discussion purposes. If only Mr/Ms Anonymous 21/5/2012, 1:02AM had bothered to REALLY READ our blog, he/she may not be so quick to credit us with bigotry.

And now that we have the head honcho of one of the largest public-listed property developer (i.e. he should know what he's talking about, especially to the media) making similar comments about shoebox units, we wonder if he will also be deemed as another (paraphrasing) "frog in a well"....

Going back to the facts of the matter, the wife and I feel that in addition to possibly setting a minimum size for apartments, the government should probably legislate on what developers can include as part of the overall size of the apartment. Can one really "live" in spaces dedicated to planter boxes and aircon ledges, which can take up a fair amount of real-estate especially in smaller apartments and which one currently have to pay the same $psf for?

For those who bother to see the whole picture rather than jumping to conclusion:
http://sgproptalk.blogspot.com/2012/04/heres-what-some-say-about-shoeboxes.html
http://sgproptalk.blogspot.com/2012/04/shoebox-unit-is-livable.html


Reference: "Shoebox units inhuman: CapitaLand CEO" - The Business Times, 26th May 2012

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The Real Deals (17-05-2012)

The latest issue from Maybank Kim Eng Research throws the spotlight on the Farrer Road area. This is following the release of a residential site at Farrer Drive for tender under the Reserve List.

Click on the link below to read the report:
http://www.scribd.com/doc/94304305/The-Real-Deals-17-05-2012#fullscreen

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Cooling measures: Review old before implementing new!

For those who missed out on this report in the TODAY papers yesterday (ironic, we know)...

All segments of the housing market are substitutes? What do you think?



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Here's one about English "shoeboxes"...

88sqm (947sqft), three-bedroom houses in England are considered shoeboxes? We should probably rename our local version "matchboxes"...

For those who are interested, click on below to access the RIBA report:
http://www.scribd.com/doc/93867658/Case-for-Space#fullscreen

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Hard landing for shoebox investors...?

The number of small apartments, or shoebox units, in Singapore will nearly quadruple from 2,500 currently to 9,700 by 2015, the government said.

Currently, about 8 out of 10 shoebox apartments are located in the city, appealing to singles and expats with lower transportation costs and travelling time to their workplace.

But analysts question the appeal of shoebox units in the heartlands, where HDB flats are in abundance, providing more space for less rental.

Cheaper mortgage rates and plenty of liquidity were pushing investors to property, but speculation may be waning.

Since December's cooling measures, transactions of uncompleted units in the resale market dropped to four per cent, while the number of private residential properties bought by foreigners and companies dropped to seven per cent.

Land supply for residential needs has also increased.

"The market is a lot cooler than it was, say, one year ago," Minister for National Development Khaw Boon Wan said.

"(But) there are pockets of hot activities, particularly in the mass market, with the emergence of these shoebox units."

Shoebox units made up 27% of new home sales in the first quarter.

But unlike the soft landing of most property segments, analysts warn rentals and resale values of shoebox apartments could drop drastically.

"Shoebox (units) would be the first to suffer," research head of Chesterton Suntec Colin Tan said.

"We may get (a situation) in the future where there will be falling prices for small apartments, and then rising prices for normal-sized apartments because they simply do not meet the requirements of the family."

Source: Channel News Asia

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Minister Khaw on shoeboxes: Second Warning this month?

Minister for National Development Khaw Boon Wan on Monday said he would not hesitate to intervene should there be clear evidence of unsustainable investor demand for shoe-box apartments.

He added that the Ministry of National Development (MND) was watching the situation closely.

However, Mr Khaw cautioned that it would be hard for him to intervene at present as the market for shoe-box units in the heartlands was "untested", and he did not want to think he knew "better than developers or investors".

Mr Khaw was responding to a question in Parliament by MP for Jurong GRC Ang Wei Neng, who asked if MND keeps track of the profiles of buyers of shoebox apartments.

Mr Ang also asked MND to share how many buyers of shoebox apartments were HDB occupants, and if these buyers were staying in HDB flats larger than 50 square metres.

In response, Mr Khaw said that MND did not yet have a good breakdown on the type of people that have invested in shoe-box units.

"But eyeballing some of the data we have, it suggests they are mostly Singaporeans with HDB addresses," Mr Khaw added. "They obviously don't plan to stay there (in shoe-box units), because they won't be able to fit into 50 square meters with a family of several (people)."

Mr Khaw said these buyers were likely to be investors who were parking their funds in shoe-box units, with the expectation of renting them out.

"They must have seen shoebox units in the central region being able to be tenanted out easily with reasonable yield," he added. "The difference this time round is that most of the units are in the heartlands -- where the market is untested."

He likened the situation to a ferry, which may be overloaded under certain conditions.

"It's like a ferry designed for a certain capacity," Mr Khaw said. "If a ferry is overloaded with too many passengers, especially if they're sailing in shallow waters, it may sink.

"But because it's an untested water and untested market, it is hard for me to intervene in the market, thinking I may know better than developers or investors."

"I think the minimum I can do is to alert everybody that I can see long queues going to board the ferry, and I think my job is to share that information as much as I can with the investing public, as well as the developers," Mr Khaw added.

Currently, there are about 2,500 units of completed shoe-box units, making up 1.2 per cent of the 210,000 non-landed units in private housing stock. The supply of shoe-box units is expected to increase to 9,700 units by 2015.

Source: Channel News Asia

Then again, IF most buyers of shoebox units are anything like the folks who have commented (about the subject) on our blog over the past week, there is absolutely nothing that Minister Khaw needs to worry about *fingers crossed*.

Ok, we better stop rumbling before we get accused of dissing shoeboxes (again)...  :-)

You may also be interested in the post below:
http://sgproptalk.blogspot.com/2012/05/garments-first-warning-shot-at.html

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GLS Latest: Plum Farrer Drive site out for tender!

 

For those wondering where the actual site is at:

Have a good weekend, everyone!

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The Real Deals (03-05-2012)

It's all about the ECs (Executive Condominiums) in the latest issue of The Real Deals.

One thing's for sure: It's gonna be a very congested Pasir Ris Drive 4/Pasir Ris Link in a couple of years' time...

Click on the link below to read the report:
http://www.scribd.com/doc/92490882/The-Real-Deals-03-05-2012#fullscreen

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Shoeboxes = HDB 1- and 2-Room Flats?

One of our readers has commented that small spaces do not mean un-livable or not conducive for family living, since people & families are still living in a 1- and 2-room HDB flats (which are considered "shoebox" HDB-style) in Singapore.

This got the wife and I really curious. So we decided to find out for ourselves how big (or small) the HDB 1- and 2-room flats actually are.

Scouring the HDB website, we discovered that a typical early 1-room HDB flat was between 23 to 33sqm (= 247 - 355sqft), while the early 2-room HDB flat ranged from 37 to 45sqm (= 398 - 484sqft).

So there appears to be some logic in saying that such 1- and 2-room HDB flats are similiar to private "shoebox" apartments, at least size-wise. But if one looks beyond the superficiality, he/she will appreciate the following stark differences:

·         The HDB flats do not come with disproportionately large air-con ledges, planter boxes, balconies etc etc that are regular features in most shoeboxes. So the 300sqft, 1-room HDB flat actually comes up top in terms of "livable space" compared to a shoebox of similiar size.

·         The price that people pay for such HDB flats are many times lower than your typical shoeboxes, whether in terms of quantum or psf price. However, one can argue that the quality of living (i.e. facilities, privacy etc) is different, which we don't disagree. 

·         Most importantly, people and families do not typically choose to live in such small 1- and 2-room flats. These are mainly occupied by low-income households, who cannot "downgrade" any further in terms of the types of homes they can afford to buy. But for shoebox purchases, this is usually a deliberate informed decision.

For those who are interested, you can read more about the different types and sizes of flats offered by HDB by clicking on the link below:

http://www.hdb.gov.sg/fi10/fi10320p.nsf/w/AboutUsPublicHousing?OpenDocument#HomeOwnershipforPeople

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From burial ground to hottest suburb...

We are (or rather, the latest issue of The Real Deals) talking about Bishan.

The "3.6% and above" rental yield for developments around the area is not too shabby either, especially considering their "classier" cousins in Marina Bay are fetching only about 3%...

For reasons unknown, the "new" Blogger can no longer support embed documents as easily as before. So click on link below to access the report:

http://www.scribd.com/doc/91920401/The-Real-Deals-26-04-2012

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