Wednesday, August 29, 2012

Shoebox demand to fall if singles could buy new flats

If singles are allowed to purchase new flats directly from the Housing and Development Board (HDB), the demand for shoebox units could decline, according to property consultants.

“Private apartments in the shoebox category (which singles below 35 used to have to buy because they cannot purchase HDB flats) might see demand wane,” said Ku Swee Yong, Chief Executive of International Property Advisor (IPA).

The drop in demand is expected, given that shoebox units generally target single buyers, noted Tan Kok Keong, Head of Research and Consultancy at OrangeTee, adding that “the impact will be keenly felt in the small sized-apartment market”.

However, the extent of the decline will depend on whether the government imposes restrictions on singles purchasing BTO flats directly from HDB, stated Ong Kah Seng, Director at R’ST Research.

“If there is (an income restriction), then the group that does not qualify for BTO flats will continue to opt for ... private shoebox apartments.”

“This will be particularly so for those who are more affluent, who do not need to lease out spare rooms to defray holding costs, and so a shoebox apartment will therefore be ideal since there isn’t any spare room for the owner-occupier to lease out.”

In such a situation, demand for shoebox units will not be greatly affected, added Ong.

View the original article here

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